1. Adolph Coors Team Pirates Spring 2008

3. Competitive Advantage in 1970s Five Forces of Competition High entry barriers - Economies of scale - Differentiation and Customer relations Suppliers and buyers have weak positions - Good wholesalers and retailers relations - Vertical integration Few threats from substitute products - Few categories - Differentiation Moderate rivalry - Competitors - High growing industry

4. What went wrong ? I. Operating Performance II. Slow growth

5. Major Brewers’ Operating Income (per Barrel) For 1977 A&BMillerHeilmanCoors Barrels Sold36.6 Millions24.2 Millions6.2 Millions12.8 Millions Revenue$46.01$45.87$34.84$41.56 COGS$36.61N/A$24.52$28.98 Advertising$1.99$2.48$2.10$1.09 Other SG&A$2.79N/A$4.35$2.97 Total Operating Cost$41.39N/A$30.97$33.04 Operating Income$4.62$4.38$4.03$8.52 A&BMillerHeilmanCoors Barrel Sold68 Millions37.1 Millions16.2 Millions14.7 Millions Revenue$43.32$39.11$29.73$41.10 COGS$29.02N/A$21.33$27.70 Advertising$3.88$4.53$3.56$6.28 Other SG&A$4.04N/A$2.56$3.58 Total Operating Cost$36.95N/A$27.45$37.56 Operating Income$6.37$2.06$2.28$3.55 For 1985 in $’s of 1977 I.Low Revenue II.Operating Cost too high Production Cost Transportation Cost Advertizing Cost

6. Slow growth compare to Competitor I.Method of production Only one facility Not able to produce in advance II.Exposition on U.S Territory III.Diversity of products available

7. Factors to Coors Stagnation Unfocused strategy From one brand to the fall The “cult” of Coors The Water Mystique Coors’ image problem AFL-CIO Strike and boycott Coors’ and the minorities Coors’ family views

8. Coors Banquet One brewery Only distributed in the West (11 states) Product Differentiation Strategy Only in draft Uniqueness of ingredients “Rocky Mountain Springwater”

9. Coors’ Mystique Burt Reynolds in the movie “Smokey and the Bandit” Gerald Ford and Henry Kissinger The In n’ Out effect

10. Coors’ Expansion Geographic Expansion Roll out in the fifty states Product Expansion Killian, Greystone, and Shulers Line Expansion Light beer, ice beer, dry beer, red beer, … Production Expansion Opening of a new packaging plant in Virginia

11. The Water Mystique Expanding nationally actually hurt Coors’ image. Cross-brewing Too much availability led to Coors’ commonness The original Coors’ can

12. AFL-CIO Boycott Lasted from 1977 to 1987 Market share dropped in California from 40% to 10%. AFL-CIO represents 13 million workers Union representative reached out to minorities organizations, universities, stadiums, and entertainment parks. Wanted to show that Adolph Coors is “antilabor, and therefore antipeople” N.E.A and N.O.W joined the boycott with more than 5 million people.

13. Unfounded accusations Anti gay, anti minorities, anti woman employment practices Not eco-friendly Comments taken out of context viewed as racists Coors’ family contribution to conservative political group

14. Boycott Coors

15. Recommendations Diversification Multipoint competitionSynergy More value Risk reduction Create a new market Miller & Coors vs. Anheuser Busch Create a stronger brand

16. Focus Strategy Focus more on consumer needs Wholesalers Buyers Change production method “Freshness Policy” More accessible On-premise Off-premise

17. Focus Strategy Create new advertising campaigns Focus on other segments of beer Regionalize in terms of marketing and sales activities Create a low cost strategy Create more facilities

18. Coors Current strategy Engaged in a 3-part strategy in 2004 (1) "Drive growth on Coors Light and Coors Original via a full line of support, including over 20 television spots, promotions, radio, out of home and print.” (2) "Support Keystone Light, Killian's, Zima, Blue Moon and Mexicali with local programming.” (3) "Respond aggressively to low-carb opportunities." Merged with Molson in 2005 Merged with SABMiller in 2007

19. Coors’ Current strategy Direct competitor to Anheuser-Busch after the merger with SABMiller. Expansion in developing market, such as Asia and Africa Goes up against the heavy marketing strategy of Anheuser-Busch, which spends twice the advertising expense of Coors, $2.5 billion and 50.6% of the market share.

20. Thank you!