Adolph Coors Brewing Company Analysis

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Introduction

 

Adolph Coors started his brewery company in 1873 at Golden, Colorado. The family-owned company has since then been under the different management of Adolph’s heir. The company has managed to survive different internal and external crisis such as the prohibition of alcoholic beverages by the federal government, World War II, the financial crisis among others. Although it has many success stories, Coors Company significantly lost its competitive advantage between the late 1970s and mid-1980s.Discussed below are some factors that lead to the decrease of competitive advantage during that period. The report also explains the various steps that Coors must undertake to improve its future prospect.

Factors that contributed to decreasing of Adolph Coors competitive advantage between the 1970s and mid-1980s

Labor issues were one of the major factors that contributed to decreasing of the company’s competitive advantage. Between 1974s and 1986 Coors’s brewing company was involved in several employee strikes due to his operating practices. He was accused of several issues including sexual discrimination, discrimination against the minority, racism, loyalty oath among others. The strikes and lawsuit continued for several years and thus had set back on the company just like any other strike.

During the strikes, the company may have suffered a loss of market connection which always goes beyond the strike period. Also, the company suffered loss due to strike-related expenditures which would otherwise not be incurred if there was no strike. Finally, there was a loss of good will between Coors and his employees which likely decreased the overall employee’s performance. All these effects of the strike led to a reduced competitive advantage of the company.(pg 9)

Another factor that resulted in decreased competitive advantage was increased competition after World War II. In 1920 the federal government of USA imposed a constitutional ban on production and sale of any form of alcoholic beverages. However, there was a re-appeal on the prohibition in 1933. In 1934 more than 704 breweries re-opened. Unfortunately, Most of them closed and stopped operating after the World War II broke out. However, after the end of World War II in the 1970s most the company started running again. The number of breweries increased, and hence there was increased competition in the brewing industry.

This affected Coors Company in a negative way because of lowered number of sales and hence decreased gross profit. Additionally, the company had to increase its operating costs such as advertising and marketing as a way of getting ahead of its competitors. It had to hire marketers from other companies, try to reach the niches that had previously been ignored such as black consumers and sharply increase its advertising expenditure.(pg 10)

Change of ownership minorly contributed to Coors decrease in competitive advantage. In 1985 Joe Coors handed over his position as the company CEO to his sons Jeff and Peter who became presidents though in the different department. Although Bill Coors and Joe Coors gave up the top position, they remained as members of the board. The change in senior management slightly affected in various ways such as employees resistant due to change in policies and leadership styles. Additionally, new management always fall victim of failure or decreased productivity due to lack of support and prior experience (.pg7)

Gender Equality, immigrant and minority issues that led to several strikes also contributed to the decline of competitive advantage. In the late 1970s, Coors Company was faced with several suits by federal agencies over those issues. This minorly affected the employee output on the company regarding both money and time used. Additionally, this decreased the consumption of beer by the discriminated groups from this company.(pg 9)

 Ways in Which the Coors Company Can Improve its Future Prospect.

The Coors company management needs to consider having strong leadership and high co-operate values. As the company navigates its ways toward higher growth rate, distraction such as financial crisis are likely to occur. Therefore strong leadership skills become more necessary to maintain a stable business environment and handle incoming economic pressures. High cooperate values will ensure that Coors brewery company has clear goals and direction regarding what they want to achieve within a particular period. The clears goals and objectives may include things like amount of beer consumption, gross profit, and market shares e.t.c

Coors company should also consider investing in benchmarking from it competitors. Benchmarking will not only help them learn from other successful companies but also contribute to come up with a better strategy than it competitors. When carefully done, it can be a surefire way of gaining the competitive market advantage. In this case, the Coors should consider benchmarking from other brewery company the customer relation, employee’s relation such as salaries, marketing strategies, and quality of beer brands.

Coors company management must also remain flexible and resilient. In today’s dynamic business environment it is considerably difficult to formulate and maintain sustainable strategies. Therefore, Coors Company must be flexible to adapt to new changes and take advantage of primary changes. This will not help them to keep up with the rapidly business environment but also maintain its competitive edge over other companies.

Conclusion

Coors Company has already made a considerable amount of successful outcomes. Besides being faced with so many crises, the company has been able to emerge among the largest beer company across the globe. However, it should focus on its future and formulate strategies that will ensure it increase and maintain its competitive advantage.

 

COMPANY BEER BRAND SEGMENT 1977 1978 1979 1980 1981 1982 1983 1984 1985
COORS Coors Banquet premium 8.2 7.4 6.7 6.5 5.7 4.8 5.5 4.8 4.9

Coors market share between 1977 and1985 (% of total domestic volume)

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