Coors Case Study

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How did Coors operating profits change relative to its competitors between 1970 and 1985? [pic] • Except Pabst rest all players have grown more then Coors in US beer industry between 1977 and 1985. • Stolh acquired Schiltz was acquired by Stroh in 1982, so revenue growth for Stroh is inorganic. • Heileman revenue grew by close to three times while Coors grew by double. So we can say revenue growth for Coors is less then its competitors during the period of 1977 to1985. [pic] Analysis for operating income is done for four companies as data is available for these four only. • Coors operating income decreased during the period1977 to 1985 by 15%. • Operating income of Aneheuser-Busch increased by 358% & that of Heileman by 168% • Coors performance is poor compared to its competitors during this period. WHY the performance deteriorated:- [pic] • Coors spend on advertisement was lowest (2.56% of sales) in 1977 but its spend was highest (15% of sales) in 1985. • Excess spend on advertisement did not result in sales increase for Coors. [pic] • Sales and administration for Coors increased but were at par with key competitor, although one of its key competitor reduced SAD by 31% while Coors SAD expenses increased by 22%. We can see from the above graphs that Coors did not perform very well as compared to its competitors during 1977 to 1985 in USA beer market. By doing value activity analysis for Coors bear manufacturing following conclusion were drawn • Coors canned 69% of its beer against an industry average of 57% in 1985. The cost of bottles was less then canes. • Coors above average vertical integration in packaging and glass bottles manufacturing did not make any sense. No value

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