While a smaller company will have more limited distribution, it will distribute specifically to the same types of establishments favored by Corona's target market, and German brews are generally not competing directly with Corona.
AB InBev owns 50% of Modelo at this point. There is the possibility that the company may decide to purchase the remainder of Modelo. If they do not, they are still something of a threat because brands such as Budweiser and Stella Artois, while positioned as mainstream brews in their domestic markets, are generally positioned as premium brands in export markets, the same tactic that Modelo employs for Corona. This puts those brands in direct competition with Modelo. It is interesting to consider that as long as AB InBev owns 50% of Modelo, they are unlikely to compete too vigorously against the Mexican brand lest they devalue it. The main threat, then, is the threat that AB InBev may decide to purchase the remainder of the brand. This could have wide-ranging implications.
One of the ways in which AB InBev could derive synergies from a purchase of Modelo is to offshore some of that beer's production, as the world's largest brewer has excess capacity in a number of different markets. This could result in job loss in Mexico, but it could also compromise the image of the beer. The other main threat is that if AB InBev purchases Modelo, it could allow the Corona brand to wither, or it could promote Corona heavily while allowing the other brands to wither. The latter strategy would be catastrophic in the domestic Mexican market, which provides Modelo with a source of strength in the consistently positive cash flow.
Modelo should respond to these threats by diversifying its business. The company can choose to seek geographic diversification by saturating foreign markets that are presently served only minimally. Another means of diversification would be to expand the product line....
Figure 2, 2009 Global beer Products Segmentation provides an analysis of the distribution of 2009 sales of beer by type. Corona is considered a Lager and is in the most crowded area of the market, making differentiation difficult. Grupo Modelo's decision to concentrate on its channel alliances and partnerships is critical for their long-term growth in such a consolidating and challenging market. In a sense Grupo Modelo has chosen
Corona There are a number of trends in the global beer industry. One is consolidation, where firms are using mergers and acquisitions to enter new markets and to achieve economies of scale. For a brewer like Modelo, consolidation means that the company becomes smaller relative to the industry's top firms. Modelo has does not compete (at least with Corona) on a cost-leadership strategy, so this trend does not matter much for
Carlsberg also have the largest stable of brands in the country, and nationwide blanket distribution. Lastly, Corona has experience in dealing with Carlsberg, with whom it has distribution agreements Russia, Central Asia, Turkey and a number of other countries around the world. Corona faces intense competition from InBev (now a-B InBev after its merger with Anheuser-Busch). InBev has a different model for international expansion, comprised of purchasing breweries all over
Brewing companies must therefore not only fight for incremental market share with competitor's brands, but must address the issue of consumers trading down by highlighting the appeal of the premium brand vs. The budget brand. Game theory comes into play in the beer market because the mainstream beer market has been static for many years. While the import and craft beer segments have grown steadily in recent years, the mainstream
Bud Light beer which is to be introduced in Turkish market. The paper has covered all the important sections of the marketing research proposal including background to the research problem, product and industry profile, internal and external analysis, research approach and methodology, and technical appraisal using timeline and cost analysis for the project. The purpose of this paper is to present a complete marketing research proposal for Anheuser-Busch that wants
Corona Beer (Modelo) Identify and discuss the trends in the global beer markets. Driven by the rapid consolidation of breweries and channel-based selling organizations the global beer markets continue to experience flat or slow growth. With the cost of entry into this industry high from a capital investment standpoint, accentuated by high interest rates, the overall industry growth rates continue to be flat with differentiation at the product level contributing little to
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now