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established his brewery business in Golden, Colorado. Since that time, the family-run business has been managed by Adolph's heir. The business has persevered through numerous internal and external crises, including the federal government's prohibition of alcoholic beverages, World War II, and the financial crisis, among others. Despite its many achievements, Coors Company saw a considerable decline in its competitive edge between the late 1970s and the middle of the 1980s. Some of the elements that contributed to the loss of competitive advantage during that time are discussed below. The report also outlines the many actions Coors must take to enhance its prospects for the future.
Labor issues were one of the major factors that contributed to decreasing of the company's competitive advantage. Between 1974s and 1986 Coors's brewing company was involved in several employee strikes due to his operating practices. He was accused of several issues including sexual discrimination, discrimination against the minority, racism, loyalty oath among others. The strikes and lawsuit continued for several years and thus had set back on the company just like any other strike.
the company may have suffered a loss of market connection which always goes beyond the strike period. Also, the company suffered loss due to strike-related expenditures which would otherwise not be incurred if there was no strike. Finally, there was a loss of good will between Coors and his employees which likely decreased the overall employee's performance. All these effects of the strike led to a reduced competitive advantage of the company.(pg 9)
was increased competition after World War II. In 1920 the federal government of USA imposed a constitutional ban on production and sale of any form of alcoholic beverages. However, there was a re-appeal on the prohibition in 1933. In 1934 more than 704 breweries re-opened. Unfortunately, Most of them closed and stopped operating after the World War II broke out. However, after the end of World War II in the 1970s most the company started running again. The number of breweries increased, and hence there was increased competition in the brewing industry.
in a negative way because of lowered number of sales and hence decreased gross profit. Additionally, the company had to increase its operating costs such as advertising and marketing as a way of getting ahead of its competitors. It had to hire marketers from other companies, try to reach the niches that had previously been ignored such as black consumers and sharply increase its advertising expenditure.(pg 10)
minorly contributed to Coors decrease in competitive advantage. In 1985 Joe Coors handed over his position as the company CEO to his sons Jeff and Peter who became presidents though in different departments. Although Bill Coors and Joe Coors gave up the top position, they remained as members of the board. The change in senior management slightly affected in various ways such as employees resistant due to change in policies and leadership styles. Additionally, new management always fall victim of failure or decreased productivity due to lack of support and prior experience (.pg7)
that led to several strikes also contributed to the decline of competitive advantage. In the late 1970s, Coors Company was faced with several suits by federal agencies over those issues. This minorly affected the employee output on the company regarding both money and time used. Additionally, this decreased the consumption of beer by the discriminated groups from this company.(pg 9)
The Coors company management needs to consider having strong leadership and high co-operate values. As the company navigates its ways toward higher growth rate, distraction such as financial crisis are likely to occur. Therefore strong leadership skills become more necessary to maintain a stable business environment and handle incoming economic pressures. High cooperate values will ensure that Coors brewery company has clear goals and direction regarding what they want to achieve within a particular period. The clears goals and objectives may include things like amount of beer consumption, gross profit, and market shares e.t.c
Coors company should also consider investing in benchmarking from its competitors. Benchmarking will not only help them learn from other successful companies but also contribute to come up with a better strategy than its competitors. When carefully done, it can be a surefire way of gaining the competitive market advantage. In this case, the Coors should consider benchmarking from other brewery company the customer relation, employee's relation such as salaries, marketing strategies, and quality of beer brands.
Coors company management must also remain flexible and resilient. In today's dynamic business environment it is considerably difficult to formulate and maintain sustainable strategies. Therefore, Coors Company must be flexible to adapt to new changes and take advantage of primary changes. This will not help them to keep up with the rapidly business environment but also maintain its competitive edge over other companies.
Coors Company has already made a considerable amount of successful outcomes. Besides being faced with so many crises, the company has been able to emerge among the largest beer company across the globe. However, it should focus on its future and formulate strategies that will ensure it increases and maintains its competitive advantage.
COMPANY BEER BRAND SEGMENT 1977 1978 1979 1980 1981 1982 1983 1984 1985 COORS Coors Banquet premium 8.2 7.4 6.7 6.5 5.7 4.8 5.5 4.8 4.9
Coors market share between 1977 and 1985 (% of total domestic volume)
From exhibit 5
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