Corona beer Case Study Example | Topics and Well Written Essays - 2250 words

Corona beer - Case Study Example The cause for unequal demand for alcohol is simply due to recessionary trails in the global economy. The soaring oil prices have caused a price rise for almost all the final goods and services. Though the money income has increased for buyers, the rising consumption expenses are putting downward pressure in the real income level. The beer and alcohol industry not only generates a significant share of many economies national product, but also spawns large employment opportunities. Thus, analysts and researchers are scared that the fall in production capacities of firms due to recession should not render more individuals jobless. At this juncture, it becomes rational to analyze the business of potential alcohol producing firms like Corona Beer. This essay will implicitly discuss the internal and external factors that determine the business of Corona Beer. The context of the research work will enumerate the different marketing strategies Corona beer has adopted to account for higher tur novers in future (DRUGSCOPE, n.d.). Table of Contents Executive Summary 2 Introduction 4 SWOT Analysis 5 Strength 6 Weakness 6 Opportunities 6 Threats 7 Staying in Power 8 Porters Five Force Analysis 9 Bargaining Power of Buyers (low) 9 Bargaining Power of Suppliers (weak) 9 Rivalry in the Industry (high) 9 Threat of New Entrants (weak) 10 Menace of Substitutes (strong) 10 Summary and Conclusions 10 References 12 Introduction Corona Beer or Corona Extra is a famous pale larger that was first manufactured in Mexico by Cerveceria Modelo. The company was founded in the recent past at around 1925 in Mexico, but its unique quality and taste soon made it a famous beverage for a large customer base. Grupo Modelo always intended to extend the market of Corona Beer beyond the territories of Mexico. From its inception in 1925, by 1996 the company gained 32.7% share of the total market demand for alcohol in Mexico. The officials of the company first desired to export Cororna Beer to the prospe ctive economies of United States and then planned to enter the other markets. Europe, Latin America and Asian markets were secondary marketplaces for the company (UFL, n.d.). Figure 1: Words Top Beer Companies (Source: Ashok, 2009) The above table explains the market position of Corona in 2005 and 2006. The values are in terms of million barrels shipped. It is evident from the above schedule that the market performance of Corona was mediocre (1.9 of total market share) till 2006 when compared with the other top beer brands. Carlos Fernandez, the chairman of the company analyzed that what was most crucial for the company was to expand its market outside the domestic borders of Mexico. In 2007 the largest beer producer and manufacturing firm in Mexico (Corona) finally decided to enlarge its production capabilities. The company spends a wholesome amount of $300 million to suffice its growing market demand outside Mexico. The company first emerged in the U.S. market in 1979, its nonrefu ndable policy, unique packaging style and differential modes of marketing soon made it a potential competitor in the U.S. alcohol industry, especially in the Southern States. Although, the Federal excise tax rates in beer was increased in U.S., but the Modelo Group passed its incidence on the buyers. Figure 2: