Adolph Coors in the
Brewing Industry
Take-aways
Internal Fit

A strategy should fit internally



Activities of the firm should link in a complementary way with
one another
This requires a cross-functional perspective
An activity map is an important tool to assess the internal fit
of a company’s strategy
An Activity Map
Procurement
Backward
Integration


Manufacturing
Marketing
Plant
Scale
One
Product
One
Location
Intermediate
Price
High
Capacity
Utilization
Limited
Advertising
Distribution
Regional
Distribution
Distribution
Controls
Cans
Other inputs
Other
Unique Process
• Asset-Intensive
• Long
• Unpasteurized
Product
• Attributes
• Rocky Mount.
Image
AllEquity
Finance
Family
Control
Confrontational
Manag.
External Fit

A strategy must also fit externally


A company’s strategy needs to make sense in the “terrain” in
which they are operating
Comparative financial statement analysis is a key tool for
this type of assessment

Identify the key drivers of change in making comparisons
Coors’ Strategy

1970s: Product Advantage vs Competitive Advantage




Scale and Centralization
Missed opportunities
Static view of rivals and opportunities
1980s: Constrained by Earlier Choices


Reactive strategy
Little adaptation
Coors Update
1985 — Miller introduces Genuine Draft August 1
1986 — Agreement with Asahi Breweries in Tokyo—to
brew and distribute Coors in Japan
1987 — Shenandoah packaging facility opened
1987 — Agreement with AFL-CIO ends 10-year boycott
against Coors
1988 — Record volume moves Coors from #5 in the
industry to #4
1989 — Introduced Keystone (a popular beer that
cannibalized Coors’ premium sales)
Coors Update
1990 — Coors rises to #3 among US brewers
1991 — Entered 50th state (Indiana) and began exporting
to Puerto Rico, Guam and Cayman Islands
1992 — Spun off nonbrewing assets including diversified
technology business
1993 — New president and COO hires from Frito-Lay;
first non-Coors family member to be president
1994 — Purchased brewery in Spain
1996 — Anheuser Busch has captured 48% of US beer
sales
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Indexed Adjusted Closing Price
(1/1/1985 = 100)
Coors Performance Post 1985
Relative Performance of Coors and the S&P 500
(1985-Present)
1000
S&P 500 + 581%
Coors + 334%
(end 2003)
100
Coors + 52%
(end 1995)
10
10
Week Ending
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7/2/03
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Indexed Adjusted Closing Price
(1/1/1985 = 100)
Coors Performance Post 1985 relative to
Anheuser Busch
Relative Performance of Coors, Anheuser Busch, and the S&P 500
(1985-Present)
100000
10000
1000
100