Business strategy Corona Essay

2973 Words Oct 19th, 2013 12 Pages
Executive Summary
Cerveceria Modelo S.A. was formed in 1992 focusing on Mexico City’s and surrounding areas’ markets. Its first beer was Modelo followed by Corona. It then started exporting its beers to the US. Corona has become very popular and was positioned as premium import. It got the first rank in imported beer in the US. However, its rivals, domestically and internationally, didn’t let it pass so easily. They reacted quite intensely. Modelo lost the first place position in its local market to FEMSA but it still kept its place in the US market. Its rivals never stop reacting that’s when Modelo’s facing tough times. This report provides analysis, evaluation, and recommendation for Modelo.

Industry competitive environment It is
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This way, Modelo is in better control of distributing its product when and where. Also, this would cut intermediaries out, hence, increase Modelo’s profit margin. Moreover, Modelo would receive first hand information to develop its products and marketing and advertising strategies. However, this requires some investments and some experience in this industry to efficiently compete with OXXO.
Modelo should try backward integration as well. It may buy the bottle factory and farm its own raw materials. It then might use some of the productions in its own brewery and sell some to other breweries. However, this would require some knowledge and experience curve in order to succeed in those industries.
International: maintain its position in the US (first place) and expand globally
Modelo should invest in local breweries to induce the risk of Mexico economy fluctuation and import tax policies. It would also decrease logistic expenses for both its products and raw materials. Moreover, it would achieve some economies of scales as well. There is also a benefit from that region trade agreement (Free Trade Area). However, there is a risk of that country economy meltdown and it would be quite difficult to control the products quality and hard to manage and control from head quarter. Above all, there might be numbers of difficulty implementing large scale strategic move.
Modelo might want to focus on unexposed countries that have high

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