Molson Coors Brewing Company
Strategic Analysis 2009
Jarryd Phillips, Jermaine West, Spencer Jacoby, Othniel Hyliger, Steven Pelletier
Overview
History
How Molson Coors came to be
Current Vision & Mission Statements
Proposed Vision & Mission Statements
External Assessment
Positioning Map
CPM Matrix
Opportunities & Threats
EFE Matrix
International Presence
Internal Assessment
Organizational Chart
2009 Income Statement
2009 Balance Sheet
Current Financial Ratios
Financial Trends
Strength & Weaknesses
IFE Matrix
Strategic Assessment
SWOT Matrix
Space Matrix
Grand Strategy Matrix
BCG Matrix
IE Matrix
Matrix Analysis
QSPM
Recommendations
Craft Beer Analysis
Objectives
Strategic Implementation
Projected Income Statement
Projected Balance Sheet
Projected Financial Ratios
Evaluation
Balanced Scorecard
Sources
Questions
History
1786- John Molson opens a
brewery in Montreal, Canada.
Adolph Coors opens the
Golden Brewery in Golden,
Colorado.
1916- Prohibition is enacted in the US. Coors keeps
the brewery open by making malted milk, near beer
and porcelain products.
1959- Coors introduces aluminum
cans and cold filter brewing.
How Molson Coors Came to be
William Worthington- 1744
Bass Brewers- 1926
William Bass-1777
Coors Brewers
Ltd-2002
Adolf Coors-1873
Thomas Carling- 1840
Molson Brewers
Canada-1989
John Molson-1786
Current Vision Statement
Our ambition is to be a top global brewer. We
have four strategic goals to help us get there:
a net profit goal, increasing returns from our
strategic brands, engagement of our
employees, and recognition for world-class
corporate responsibility.
Current Mission Statement
At Molson Coors, corporate responsibility is core to
our overall business strategy. We cannot meet our
profit target without managing sustainability risks
and opportunities. We grow our brands responsibly,
and responsibility performance is key to engaging our
employees. We come from many different
backgrounds, so our values help to unite us. They
guide our decisions and our actions through
excelling, passion, integrity and respect, creativity,
and quality.
Proposed Vision Statement
At Molson Coors, our goal is to provide
consumers with products they most prefer;
and at the same time be the leading
producer of malt liquor products in the
world.
Proposed Mission Statement
At Molson Coors, we desire to produce the best products and services for
consumers in the world market (1, 2, and 3). In the process, our employees
and managers will utilize the newest technology and innovation to ensure
profits for shareholders and growth for the company (4, 5). Our breweries and
production processes will operate with a concern for employee livelihood
sustainability, environmental protection, and community commitment (8, 9).
We will continue to provide our value chain with the best value possible (7).
Our philosophy towards innovation and product sustainability displays a
commitment to our company and will ensure progress in the industry for the
short and long term (6).
1. Customers
2. Products or services
3. Markets
4. Technology.
5. Concern for survival, growth, and
profitability
6. Philosophy
7. Self-concept
8. Concern for public image
9. Concern for employees
External Assessment
Positioning Map
Global Sales (High)
Volume
Produced(low)
Volume
Produced(High)
Global Sales (Low)
CPM Matrix
Critical Success factors
Advertising
Product Quality
Price Competitiveness
Management
Financial Position
Cutomer Loyalty
Global Expansion
Market Share
Brand
Joint Ventures
Employee Benefits
Product Placement
Totals
Weights
Rating Weighted Score Rating Weighted Score Rating
0.0 to 1.0 1 to 4
0.12
4
0.13
4
0.10
4
0.07
3
0.06
1
0.05
2
0.09
3
0.06
2
0.09
3
0.10
4
0.07
3
0.06
3
0.48
0.52
0.40
0.21
0.06
0.10
0.27
0.12
0.27
0.40
0.21
0.18
1.00
3.22
1 to 4
4
4
4
3
3
3
2
3
4
2
3
4
0.48
0.52
0.4
0.21
0.18
0.15
0.18
0.18
0.36
0.20
0.21
0.24
3.31
1 to 4
4
4
4
4
4
3
2
4
4
3
3
3
Weighted Score
0.48
0.52
0.40
0.28
0.24
0.15
0.18
0.24
0.36
0.30
0.21
0.18
3.54
Opportunities
1.
2.
3.
4.
5.
6.
Producing liquor or soda can also diversify risk, as sales of beer
fluctuate.
The Asian beer market provides ample business expansion
possibilities, because they are a large consumer of the product
and their populations are growing.
Creating more strategic alliances with other companies reduces
risk as they move into foreign operations
Provide more environmentally friendly packaging, improve
pollution prevention goals.
Continue expanding joint ventures internationally.
They can produce a line of Organic Beer, Gluten free beer, or
move into the higher priced market of beers.
Threats
1. Top competitors include: Anheuser-Busch &
Heineken.
2. Any significant increase in raw materials prices will
negatively affect their margins.
3. Any significant decrease in the ability to obtain their
raw materials will also affect their margins.
4. Perceptions that beer is not as healthy as other
alcoholic beverages like wine.
5. Economic recession in the US increases the sales of
beer at first, but as the recession continues over a
longer period of time, it may cause sales to
decrease.
EFE Matrix
International Presence
Internal Assessment
Organizational Chart
2009 Income Statement
2009 Balance Sheet
Current Financial Ratios
Financial Trends
Strengths
1. Molson-Coors benefits from their large market share in the beer
industry in North America.
2. Molson Coors is an innovative company, first by surviving prohibition
in the US, when their product was deemed illegal; they began to
bottle water to keep the company going. When prohibition was
repealed, they returned to bottling alcoholic products and
developed the first aluminum can.
3. Strong Financial position.
4. Alliances with NFL and NASCAR.
5. Successful joint ventures.
6. Reasonable prices- can sell to a larger majority, although not
considered cheap for everyone.
7. Growth in Foreign markets.
8. Molson Coors has a strong brand portfolio representing nearly all
types of beers which should help them diversify risk against changes
in consumer preferences.
Weaknesses
1. Lower market share in the U.K
2. They rely on only a few popular brand names, which expose the
company to vulnerability when sales and economic regions
fluctuate.
3. Labor practices in Europe.
4. They have dependencies on raw materials such as aluminum,
barley, hops and wheat, and the price for these have increased
greatly since 2008.
5. Perceptions in the states are that it is a middle class beer, which
makes it harder to sell to the people with disposable income
6. They rely considerably on a small number of suppliers to obtain
their packaging.
7. Molson-Coors relies on 70% of its U.S. sales from Coors Light.
IFE Matrix
Strategic Assessment
SWOT Matrix
1.
2.
3.
4.
5.
6.
7.
1.
2.
3.
4.
5.
6.
Strengths
Molson-Coors benefits from their large market
share in the beer industry in North America.
Molson Coors is an innovative company, first by
surviving prohibition in the US, when their
product was deemed illegal; they began to
bottle water to keep the company going.
Strong Financial Position
Alliances with NFL and NASCAR
Successful joint ventures
Growth in foreign markets
Strong brand image
Opportunities
Producing liquor or soda can also diversify
risk, as sales of beer fluctuate.
The Asian beer market provides ample
business expansion possibilities, because they
are a large consumer of the product and their
populations are growing.
Creating more strategic alliances with other
companies reduces risk as they move into
foreign operations
Provide more environmentally friendly
packaging, improve pollution prevention
goals.
Continue expanding joint ventures
internationally.
They can produce a line of Organic Beer,
Gluten free beer, or move into the higher
priced market of beers.
1.
2.
3.
4.
5.
6.
Weaknesses
Lower market share in the U.K
They rely on only a few popular brand names,
which expose the company to vulnerability
when sales and economic regions fluctuate.
They have dependencies on raw materials.
Don’t appeal to class of people with a lowerdisposable income.
They rely considerably on a small number of
suppliers to obtain their packaging.
Molson-Coors relies on 70% of its U.S. sales
from Coors Light.
SO Strategies
1. S1, O3:Expand into Asian and
European market which also
encourage them to diversify their
products. Create alliances with
companies in other countries.
2. S1, O2, O6 : Purchase Farms to
reduce cost of raw materials and
use these farms to create a new
line of organic beer.
3. S4, S5, O4: Not only use NASCAR
and NFL as sports to sponsor,
many more sports out there a
bigger than NASCAR- branch out
WO Strategies
1. W1, O1, O4, :Low market
share in some countries is
an opportunity to expand.
Should strengthen the
brand image of weaker
product lines in order to
prevent relying on certain
products to boost their
sales.
2. W2, W3, O2: Start
utilizing personal
resources (farms) rather
than invest too heavily in
suppliers.
SWOT Matrix cont.
1.
2.
3.
4.
5.
6.
7.
Strengths
Molson-Coors benefits from their large
market share in the beer industry in North
America.
Molson Coors is an innovative company,
first by surviving prohibition in the US,
when their product was deemed illegal;
they began to bottle water to keep the
company going.
Strong Financial Position
Alliances with NFL and NASCAR
Successful joint ventures
Growth in foreign markets
Strong brand image
1.
2.
3.
4.
5.
6.
Weaknesses
Lower market share in the U.K
They rely on only a few popular brand names,
which expose the company to vulnerability
when sales and economic regions fluctuate.
They have dependencies on raw materials.
Don’t appeal to class of people with a lowerdisposable income.
They rely considerably on a small number of
suppliers to obtain their packaging.
Molson-Coors relies on 70% of its U.S. sales
from Coors Light.
ST Strategies
• S1, S4, O1: Use market share and alliances in
North America to promote company.
NASCAR and NFL are only big in the US, not
other markets, so have to be smart in how
they promote and market their products,
but can use those sports to their advantage!
• S5,S6, O5: Expanding into other markets
along with diversification of their brand, will
help reduce the risk of sales in challenging
financial times in the US.
• S1, S7, O4: Use company`s strong financial
position, along with strong market share
percentage and alliances to create a
stronger/ potentially healthier brand image.
1.
2.
3.
4.
5.
WT Strategies
• W1, T5: Molson`s low market share in
other markets will suffer as a result of
a recession. Expand into foreign
markets!
• W3, W5, O3: Dependency on
suppliers, will be influenced even
more if there are any changes in raw
material prices or during recession
periods.
Threats
Top competitors include:
Anheuser- Busch & Heineken
Any significant increase in raw
materials prices will negatively
affect their margins.
Any significant decrease in the
ability to obtain their raw
materials will also affect their
margins.
Perceptions that beer is not as
healthy as other alcoholic
beverages like wine.
Economic recession in the US
increases the sales of beer at
first, but as the recession
continues over a longer period
of time, it may cause sales to
decrease
Space Matrix
Grand Strategy Matrix
-Market Development
-Market Penetration
-Product Development
-Forward Integration
-Backward Integration
-Horizontal Integration
-Related Diversification
BCG Matrix
IE Matrix
Matrix Analysis
QSPM
Recommendations
• Invest to develop and start-up a Molson Coors
Craft/Organic beer line that will result in a revenue
increase of 10%
• Increase advertisement and R&D to coincide with new
beer line
• Utilize Green initiatives for the new line
• Possible expansion in farming industries to reduce the
cost of raw materials
• Expansion of product brands to avoid relying on certain
products to boost sales
Craft Beer Market
Craft Beer Analysis
•
•
•
•
•
They managed to be successful, amidst economic conditions that adversely affected the beer
industry.
Craft brewer retail dollar value in 2009 was an estimated $6.86 billion, up from $6.32 billion in
2008.
1,585 breweries operated for some or all of 2009, the highest total since before Prohibition
recorded a 10.3 percent increase in sales by dollars and a 7.2 percent increase of sales by
volume in 2009
Craft breweries also gained a little more market share to 6.9 percent in dollar sales and 4.3
percent in volume
Objectives
•
•
•
•
•
•
•
•
•
•
To be the number one global beer producer
Market growth in Asian and other international markets
Innovation investments
Drive value and volume in premium low calorie light products
Strong net revenue management
Continue to be socially responsible
Continued joint ventures and alliances
Brand portfolio development
Optimize price/volume balance – lower COGS
Increase dividends to shareholders
Strategic Implementation
Projected Income Statement
Projected Balance Sheet
Projected Financial Ratios
Evaluation
Balanced Scorecard
Balanced Scorecard cont.
Sources
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Business Sources Complete
Business and Company Resource center
http://www.scribd.com/doc/48852989/Report-on-Craft-Beer-Industry
http://billybrew.com/craft-beer-101
http://www.scribd.com/doc/48852989/Report-on-Craft-Beer-Industry
http://www.craftbeer.com/pages/beerology/why-craft-beer/show?title=why-do-you-love-craft-beer
http://www.dailycamera.com/ci_14642832
http://beerpulse.com/2010/03/craft-beer-sales-up-7-2-in-2009-and-projecting-ahead-to-2010/
http://www.testosteronepit.com/home/2012/3/28/the-beer-war-on-american-soil.html
http://molsoncoors.com/en/Index.aspx
http://www.thebeerfathers.com/top-us-beer-brand-stats-2009-update/
http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=TAP:US
http://ycharts.com/companies/TAPA/eps#series=type:company,id:TAPA,calc:eps,,id:TAP,type:company,calc:eps&zoom=&startDate=12/31/2008&en
dDate=12/31/2009&format=real&recessions=false
www.yahoofinance.com
http://investing.money.msn.com/investments/financial-statements?symbol=tap
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCMQFjAA&url=http%3A%2F%2Fphx.corporateir.net%2FExternal.File%3Fitem%3DUGFyZW50SUQ9MzQ4ODh8Q2hpbGRJRD0tMXxUeXBlPTM%3D%26t%3D1&ei=29eST7fXNsfz6QGe2ficBA&usg=AF
QjCNHSn8blXTvd2F7aESbu7Vp56c3kKw&sig2=rEpO5LXJ4U0CdZGiWvPSdA
http://uk.reuters.com/article/2010/02/08/uk-beer-idUKTRE6173IZ20100208
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCMQFjAA&url=http%3A%2F%2Fphx.corporateir.net%2FExternal.File%3Fitem%3DUGFyZW50SUQ9MzQ4ODh8Q2hpbGRJRD0tMXxUeXBlPTM%3D%26t%3D1&ei=29eST7fXNsfz6QGe2ficBA&usg=AF
QjCNHSn8blXTvd2F7aESbu7Vp56c3kKw&sig2=rEpO5LXJ4U0CdZGiWvPSdA