Adolph Coors in the Brewing industry:
By the mid-1980s, the US brewing industry has evolved (post-prohibition) from a local industry dominated by numerous small breweries into a national one, dominated by several very large aggressive competitors.
Adolph Coors, historically a regional player, has been critically affected by these industry changes.
Praised in the late 1970s as one of the best investment opportunities in the market, by the mid-1980s Coors’ competitive strategy seems to be coming “undone.”
While Coors’ 1985 financial results seem to imply that there may be light at the end of the tunnel, the future may not be as “rosy” as it appears. Coors faces serious competitive challenges from the major national players.
As the case ends, doing nothing is no longer an option.
The case will allow us to review and refine our skills at industry and competitive analysis, and at identifying critical economic or competitive industry drivers.
It provides an opportunity for a quantitative and qualitative analysis of competitive economics.
It also forces us to consider the determinants of the sustainability of a competitive position.
Suggested Questions:
1. How has the US brewing industry changed from prohibition through the mid 1980s? Why did the brewing industry consolidate? How have the national breweries been able to gain an upper hand over the local and regional breweries?
2. List and discuss the critical drivers (critical success factors) in the brewing industry, and how they have changed over time.
3. What factors accounted for Coors’ competitive advantages in the mid-70s? Compare Coors’ financial performance in 1977 with that of the other major breweries (Exhibit 9). What drove Coors’ competitive advantage in the mid-70s? Did Coors have a sustainable competitive position (advantages) in the mid-70s?
4. How and why did Coors’ financial performance deteriorate between the mid-70s and the mid-80s? Compare Coors’ financial performance in 1985 with that of the other major breweries. What drives Coors’ relative disadvantage vis-à-vis Anheuser Busch in 1985?
5. What went wrong at Coors? What could it have done differently? When was its last real chance to change course?
6. What are the merits and difficulties/problems of Coors’ adopting a national brewing strategy?