1. Competition – Threat is very HIGH.

 Market Share: From 1950 to ’85, the market share of Anheusuer-Busch, Miller,
Stroh have enjoyed a far better growth in Market share than Coors. Moreover,
Heileman and Pabst have had similar growth pattern.

 Sales: The growth in Sales from ’77 to ’85 suggests a STRONG and formidable
competition with 3 companies way forward in sales’ growth whereas Schiltz/Stroh
and Pabst had a lesser growth than Coors. Coors had a negative growth in this
period.

 Brand Categories as differentiators – MEDIUM – Coors has presence in the light

and premium categories, whereas Miller and Anheuser-Busch have a presence in
SuperPremium as well. Schiltz/Stroh stands equal to Coors with entries in two
categories. Only Pabst and Heileman have one segment each.

 Marketing and Advertisements:- STRONG competition with Coors having a very

high advertising/barrel costs of 11.20$ which is almost double that of the
competition with Anheuser-Bosch, Stroh and Miller having figures of around 6-8$.

 All the companies have a lot more number of breweries than Coors which gives
them various advantages like targeting regional markets more effectively. However,
Coors’ USP of a special beer making process makes it difficult to establish such
production process elsewhere.

2.  Suppliers – VERY LOW threat. There are two primary form of suppliers for
Breweries Suppliers for raw materials (20 - 25%)and Suppliers of Caning Bottling and
Packaging facilities(75 -80%).
a. Coors prepares its entire raw material and equipment requirements indigenously,
a supplier threat doesn’t exist.
b. However, to view it from another perspective, since there is an efficient and large
supplier market present, there is a chance that the competing firms gain a cost
advantage by relying on suppliers and negotiating equipment prices from them,
instead of producing indigenously.

3. Substitutes – STRONG.
c. Though Coor’s USP is the taste difference it gets by using various quality measures
in their production, it still doesn’t seem to give a substantial difference in the end-
taste. Thus, the entire competing brands can be considered as substitutes for the
premium and light brands that Coors has to offer.
d. Also, other beverages like soda, wine, whiskey etc., are also substitutes that the
customer has on offer.

4. Customers – HIGH threat.

e. Wholesalers are the primary buyers of beer. Coors’ lower profits and competition
has made their figures dwindle by huge numbers in the ‘80s. Moreover, with huge
investments on market development being an onus of the wholesaler, it is difficult
to find a large wholesaler to effectively carry a brand.
f. On-Premise and Off-Premise buyers have a relatively low share of buying and are
not a major threat.
5. New Entrants – LOW threat.
g. There is already a very high competition in the market and the industry is seeing a
stagnant growth. So, the motivation for a new entrant to make considerable
profits is low.
h. Atleast 5 million barrels of sale is required to cash in on efficient production
savings. Lesser barrels will increase production costs. Moreover, the capital costs
(500-600 mn $) and launch costs (20- 35 mn $ per brand) are also very high
making it costlier to enter the market.