Strategic Management Case Study: Coors Brewing Company

Good Essays
Miranda Dykes
MGMT 4513 Case Study
Coors Brewing Company Overall performance is closely linked to a company’s operations and how they meet objectives to obtain certain outcomes. The story of Coors’ performance is told in Exhibits 9-10 in the Strategic Management textbook; despite increased capacity, operating income as percent of sales declined by 11% in 1985. Even more telling would be the changes in pure operating income across the industry. In those eight years Coors declined by 14.7%, while others like Heileman increased 168% and Anheuser-Busch increased 358%. Other factors come into play like Coors having low growth in net revenue and the number barrels sold, but possibly the most influential change was Coors advertising expense, which
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Coors could still offer unpasteurized beer and adjusting their “Rocky Mountain” slogan to encompass the whole country— “Pure American Spring Water.” If Coors established numerous production facilities, they could take advantage of economies of scale, use suppliers for ingredients, and simply concentrate on their primary business. Additionally, their relationships with wholesalers would improve from time being less constricting. A differentiated version could be developed of the original Colorado beer formula and be distributed in the Western region or nationally, at an appropriate price …show more content…
These problems and solutions are only symptoms of a larger virus- both ineffective top and risk management. The Coors family is the key decision maker and determines the outlook for the company, and is reluctant to relinquish some of that power. They have been in this position for over a hundred years and have developed a form of tunnel vision and lack of proper risk management towards the future of the company. Not exploiting available market share in 1977, refusing to adjust production processes, only operating out of Colorado (with the exception of Canada): all of these situations happened because top management was against deviating from tradition- they were too comfortable. That’s dangerous in a competitive industry like brewing and is what lead to Coors’ performance decline in 1985. Expanding nationally was a good decision for Coors but it should have been analyzed and handled more proficiently.
It is imperative that Coors create an operational risk management team and implement internal controls so they can be effective. The Coors family should allow “outsiders” to enter the realm and stimulate new

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