Coors is one of the largest brewing companies in United States and has maintained high production level since its establishment almost two hundred and thirty years ago. The company specializes in production of high-quality brewed malt in U.S. through various management strategies. Some of the important aspects of production used by Coors are a quality water-source selection, stringent processing standards, and a well-strategized cold filtering brewing approach. The high competitive advantage enjoyed by the company has enabled it expand its distribution to new markets within U.S. in order to gain a higher market share (Ghemawat, 1992; 1). The following discussion focuses on the key aspects that made Coors brewing industry achieve a high competitive advantage and its strategies to invest in new markets.
Coors’s Competitive Advantage
Adolph Coors founded Coors Brewing Company after realizing that Colorado offered a source of fresh water for the brewing industry. Most of the company’s managerial achievements have been credited to Adolph’s family. However, in the 21st century, the beer market changed drastically calling for the company management to define newer methods of conducting production and marketing segmentation processes. The business evolved into a competitive industry that accommodated both local and international competitors. Coors developed various production strategies that would enable his company rank among the best beer producers in the U.S. by the year 1985 (Ghemawat, 1992; 2).
The main question that arisen from this situation was the ability of Coors to maintain his family culture while changing the company’s structure meets international standards. Another question was the ability of Coors to grow the company’s core products in order to compete effectively with other brands. Lastly, the company had to address its distribution logistic issues concerning product delivery from the processing firm to wholesalers and retailers across the country. Addressing these issues required that the company show a high performance index.
Performance matters a lot in every organization since it indicates its value in relation to other organizations in the same field. In Coors Brewing Company, the performance was improved by introducing new management rules that ensured all departments show a high level of production irrespective of the prevailing situations. The financial performance measure of an organization is determined by the profit sharing plans, and progressive people management strategies, which creates positive effects. In addition, the company acquired an effective procurement process that ensured the cost of production was at the lowest possible value. The market structure adopted by an organization acted as an element of undertaking need analysis of the market share. In this, the market structure had to segment the potential market of the organization products for effective analysis of the needs, and formulation of measures that need adoption by the company (Ghemawat, 1992; 2-3).
On the other hand, production played a major role in attaining the competitive advantage of Coors Company. The management team at Coors recognized a need to expand their operations internationally by improving their products. The company opened new stores in major towns in U.S. to enable customers have access to their products. The company made use of demographic marketing selection strategy whereby product branding was used as the main marketing strategy. The market segment was developed in order to increase sales of products like, canned beer. In order to achieve high profit margins, Coors Company used cost effective production methods that made it more compettive among its rivals. The company aimed at produxing more barrels in order to increase its economies of scales. The cost of producing brewing barrels differed with time prompting the company to ensure a production of more than 100,000 barrels annually ((Ghemawat, 1992; 4).
The other aspect of production that enabled Coors Company achieve a compettive advantage was distribution of its products. The company made use of wholesalers and reatilers while other smaller companies made home deliveries. Coors is an established brewing company and many consumers had gained the trust on its products as opposed to the newerly established companies. Coors innovation strategy was promoted through offering branded products at consumer friendly prices in all stores countrywide. The retailing department that consisted of merchandisers and store operators ensured customers always received fresh drinks with different flavours at all times. Wholesalers liaised more frequently with buyers to ensure that the purchased products achieved the targeted sales plan. This involves devising the necessary techniques by delivering the production plan to buyers, who in turn, come up with decisions on the products to buy, brands, and the amount (Ghemawat, 1992).
Marketing was another factor that Coors management took into consideration in order to plan competitive strategies. The demand for beer in U.S. kept increasing between 1980 and 1985 due to the increased rate of population growth. The company had to devise effective marketing strategies because new beer brewing companies kept on emerging that offered distinctive products to potential consumers. To improve on marketing, the company ventured into a brand name creation of its beers. In line with brand name change, the company took an extensive promotion of its products. This called for the company to venture in as many places as possible, to create customer awareness of their branded beers. Advertising methods such as media campaign, and offering additional promotions to the customers brought high profits for the company (Ghemawat, 1992).
Coors’s Brewing Division
Coors always stressed on quality brewing and could not entertain any behavior that provoked the rights of consumers. He upheld effective corporate social responsibility and ethics in his business that made him receive many customers. Moreover, the company took good care of various farmers who provided raw materials (barley) for beer production. In his constitution, Coors developed policies that ensured the rights of persons were respected. The following policies aimed at achieving the following organizational objectives:
- A perfect management regulations through proper distribution of rights and responsibilities among the company staff, managers, and stakeholders, customers and the society
- Creating a strong company cultural structure and protect it in order to hold the business integrity and provide responsible practices, and
- To encourage employees on how to make an efficient use of the available resources and using them to attain a competitive advantage
In addition, the company developed rules and regulations guiding the use of beer in clubs and at homes in order to promote responsible drinking (Ghemawat, 1992; 5).
Organizations undergo various challenges as they develop the necessary strategies to assist in managing the current business operations in terms of competitiveness and positioning. Managers should be capable of integrating best organizational behavior practices in carrying out their regular business operations, in order to achieve their specific organizational objectives. In every organization, people have the responsibility of providing leadership, stewardship, and follower-ship. People learn innovations and ideas that assist them transform their organizations into greater levels hence achieving a greater competitive advantage. Coors Brewing Company’s strategic approach enabled it maintain its lead in beer production in U.S. between 1980 and 1985.
- Ghemawat, P. (1992). “Adolph Coors in the Brewing Industry”, Harvard Business School. 9-388-014