Introduction
Molson Coors Brewing Company (MCBC), a multinational company dealing with alcoholic and non-alcoholic products has three major operating segments. MCBC operating segments are in Canada, Unites Kingdom, Unites states of America, and Molson Coors International.
The company was incorporated in the year 2005, after a merger between Molson and Coor brewing companies. The company has a wide portfolio of products including Carling, Molson Canadian, and Coor Light, and produces partner brands such as Heineken. The company mission is to provide consumers with high quality beers designed to appeal to wide range of consumer tastes, preferences and occasions.
A SWOT matrix is developed to establish an organizations internal competency and identify external opportunities, which can improve the organization performance in the future (Lazenby, 2004). SWOT analysis is done to identify factors within and outside the organization, which can affect the organizations future performance.
Weakness
MCBC is the largest brewer by volume in Canada with a huge market share of roughly 40%.
MCBC has a diverse product portfolio which gives the company competitive advantage over its competitors because it has been also to command a huge market share of loyal consumers. The company product portfolio is able to satisfy consumer with different tastes, preferences and for different occasions.
Global intellectual property, MCBC owns most of the trademarks of the brands of beer and other products such as wines it produces and distributes.
MCBC has acquired licenses for other brands of beer it produces which helps the company to remain competitive in the highly dynamic brewing industry.
The company owns patents and design registration for, packaging beer dispensing system, and other innovation.
A company human capital is fundamental for successfully achievement of its strategic objectives is critical. Maintaining good employee relations gives a company competitive edge in the market through high productivity through motivated employees. Monson Coors Brewing Company has good employee relations in all of its operating segments most of whom are unionized.
MCBC has been facing intense competition in most of its market because the competitor has more financial, production, marketing and distribution resources. The competitors also have stronger brand presence and are diverse geographically.
MCBC is highly reliant on a few dormant brands for profitability and if the competitor were to apply aggressive competitive strategies, it would affect the financial performance of MCBC adversely.
MCBC does not have resources, which would give it the advantage to use aggressive strategies such as price reduction or capital-intensive strategies.
Additionally, MCBC markets are mature which present a major challenge because the potential for growth in the industry is already fully exploited.
Political infighting among management is another factor threatening the performance and long-term survival of MCBC. Pentland securities and Coors Trust are controlled by Molson family of companies and together they own two thirds of the overall class A’ common stock of the company. If Pentland and Coors Trust do not approve of any decision made by the company the shareholder will not approve even if it is beneficial to the company.
MCBC has made poor investment decisions for its pension plan with some investments having very high obligations and such that the company may require seeking external funding to sustain the pension benefit plan. The external funding required to sustain the pension plan may have adverse effects on the financial performance of the company.
MCBC only has one supplier for its packaging material. In apply disruption of supply would profoundly affect Molson Coors ability to manufacture its products.
Threats
A key success factor in the brewing industry is the ability to achieve and maintain a good brand image, product quality and reputation. MCBC has been able to manufacture high quality products. In addition, MCBC product line brand has good reputation in the market. This has enabled MCBC to maintain its existing market share in a market, which is already mature.
MCBC has strategic alliances, which helps it to distribute its products in Canada, which is highly dominated by few distributors. Although the distribution system in brewing industry is subject to many changes MCBC, strategic helps it to distribute its products and venture into new markets.
In the advent of technology, most companies have gone global to exploit new unexploited markets especially in developing countries. The markets, which MCBC operates, are mature and already saturated. With its strong brand name, Molson should exploit international outside Europe and the United States of America.
The patents and design registrations held by MCBC are only valid up to the year 2035, after which the designs will be available to public domain. Patents and designs give a company competitive edge over other companies in the industry and they are a source of income for the company. To maintain its market position MCBC will need to innovative other beer dispensing system, and new packaging methods.
Environmental matters in the brewing industry and in all segments, which Molson Coor Brewing Company operates, are subject to a variety of extensive and changing state, federal, and local environmental laws. The laws govern brewing activities, which may have adverse effects on the environment and human health. The rules and regulations may pose liability for cost of remediation on past sites of release of waste matter and hazardous material posing a major threat to the company’s public image and financial position.
The brewing industry is seasonal fetching high revenue only during major holidays and around some sporting events. This presents a major challenge for MCBC r because its needs to spread across all months to cover cost even during low seasons.
MCBC has strategic alliances with other beverage companies through joint ventures, licensing, distribution and other arrangements, which allows the company to manufacture and distribute products for other companies. Termination of the agreements or restructuring of the industry would cause profound effect to the financial performance of the company because it would loose a major source of revenue.
MCBC major markets are in United Kingdom, United States, and Canada. However, the survival of the company is low if competitors started using aggressive strategies such as price wars. Acquisition of the major competitor will help Molson Coor increase it its market share profitability and long-term market survival (Hubbard, 2001). However, acquisition of the competition has one major disadvantage MCBC does not have the managerial resources to manage a wider portfolio of products.
Expansion into new markets will require Molson Coor to spread its already meager resource by opening up new production plants and offices in a new location. However, the expansion into new market would help Molson to acquire new market share in countries where the brewing industry is growing.
Long-term Objectives and Strategies
MCBC should establish long-term objectives, which include becoming the market leader in the next five years in all dominant markets, which include Canada, United States and United Kingdom, and expansion into new markets. Through an aggressive strategy, enables an organization to achieve profitability by focusing on creating value for the organization through the product mix (Grunig, Kuhn & Clark, 2010). An extensive promotional and marketing strategy will help MCBC increase aware on the organizations products and services worldwide. A market diversification strategy using its dominant brands will help into new markets because its exciting market in Canada, United States and United Kingdom is already saturated.
A promotion mix will require relatively few resources because MCBC can use the internet, which is relatively cheaper than traditional forms of promotion and advertising. An expansion strategy will require a considerable amount of resources because MCBC will have to open branches for distributing its products in the location of new markets the company will be venturing.
Implementation
The aggressive business strategy should be implemented through the organization-marketing department. The marketing department should begin by carrying out an analysis of the organization dominant market then tailor a promotion and pricing strategy for each of the market (Flood, 2000). Management should appoint a team to carry out research on growing market in the brewing industry; the business environment of new market should be compatible with MCBC current business model. After identification of plausible new markets, MCBC should carry out further research to identify the best strategies that would help the company to penetrate the market (Fine, 2009). After identification of the strategies, MCBC should then make investments and launch its products into the new market.
Strategy evaluation
The strategy should be constantly reviewed during implementation to ensure they are implemented successful. MSCB should carryout a cost benefit analysis to access the success of the market diversification and the extensive promotional and marketing strategy
References
Flood, P. (2000). Managing strategy implementation: an organizational behavior perspective. New York: Wiley Publishers.
Fine, L. G. (2009).The SWOT Analysis: Using Your Strength to Overcome Weaknesses, Using Opportunities to Overcome Threats. USA: Create Space Publishers
Grunig, R. Kuhn, R. & Clark, A. (2010). Process-based Strategic Planning. New York: Springer Publishers.
Hubbard, N. (2001). Acquisition Strategy and Implementation. Great Britain: Purdue University Press.
Huber, A. J. (2010). Effective Strategy Implementation in Marketing. Germany : Gabler Verlag.
Lazenby, K. (2004). Strategic management: Southern African concepts and cases. South Africa: Van Schaik Press.
