Adolph Coors Brewing Company Case Summary
Adolph Coors Brewing Company: Case Analysis
1.0: Explanation of the decline in performance in the period of 1975 to 1985
Adolph Coors posted a declining performance in terms of financial and operational reports from 1975 to 1985. The sole contributor to Adolph Coors is the business operations. By comparing year 1975 with year 1985, it is evident that despite increase in operational capacity, Coors performance posted a sharp decline in the operating revenues. From Exhibit A below (derived from the Exhibit 9 in the case study), the operating income given as a percentage of the sales indicates a decline from 20% recorded in 1977 to just 9% registered in 1985.
Exhibit A: In this context, it would be paramount …show more content…
Economy of scale is realized by getting basic suppliers like barley or grains from farmers rather than running an agricultural farm by the company. Outsourcing is primarily done on second process, thus leading cost savings (Doole and Lowe 204). Adolph Coors should concentrate on the primary processes like beer processing, in lowering production costs.
II: Adolph Coors should undertake cost study, and evaluating the difference in expenses if the company assumed pasteurization process rather than following the refrigeration method. For example, if the method goes with consumer preference or taste, while adhering to value addition procedures, the change would be justified, and potentially result in substantial cost savings and reduction on wastage.
III: Adolph Coors should consider embarking on plant expansion by establishing breweries in various regions nationally at the start of the firm’s expansion plan. This approach would help the firm realize greater savings on storage and shipping