Corona Beer: From a Local Mexican Player to a Global Brand (17th Ed.)

Executive Summary

Grupo Modelo S.A.B. de C.V. is the leader in beer production, distribution and marketing in Mexico. Grupo Modelo has been family-operated since it was found in 1922. At that time, it focused to serve the Mexican drinkers and continued to take over many beer brands to diversify its portfolio later. With the international strategy, Modelo entered to the U.S. beer market by introducing Corona beer. The number of Corona drinkers had been increased and Corona Extra became the best-selling imported beer in the U.S. It has maintained such position until now. In 2009, Corona Extra is ranked as the fifth beer brand in the World while Modelo share in Mexico increases to 58%. However, Modelo still has challenges that other global players aim to take over its position by using strong advertisings, acquiring other breweries, etc. It leads to a question; can Corona remain the leader at home and in the US? How should it do that? Will it be successful?

Strategic Diagnosis

1. Global Environment

1.1. Factors of change (PESTEL): These driving forces are the key factors which impact the brewing industry.

 Political and legal factors: The political factors share significant changes to the beer industry. Governments create regulation that the brewers have to get an advertising approval when they want to advertise their products. The regulators also focus on distribution channel. The manufacturers and retailers must have license stating that they have an approval to sell the alcoholic beverage. In addition, the government also regulate the age of new drinker.

 Economic factors: Many countries create policies which impose high tax on alcoholic beverage to minimize the number of alcoholic drinkers or prevent other imported brewing brands from beating their local producers. Such policies directly affect to the beer industry. Some firms pass the tax to their consumers. It leads to the declining number of beer drinkers. Some firms choose to absorb the tax themselves. This solution raises their cost unavoidably.

 Social factors: The alcoholic industry is limited in the areas in which alcohol consumption is acceptable. In the past, beer was served only for men. At present, it is for both men and women. Regarding this change, the beer consumption increases. Besides, the change in lifestyles also impacts the business. Nowadays, people want to stay healthy by taking good food. So, many brewers creates low-calories beer to capture such market.

 Technological factors: The brewers offer their promotion and provide brand information through their websites to capture the internet users. Internet is the low-cost channel but could get thru the consumers easily.

 Environmental factors: People are more concern that the beer producers could damage an environment. They pressure