Corona Beer : From

a Local Mexican
Player to a Global
Brand

Evan Adrian
Allan Yanuar Sanger
Samuel Yacobus
Tristi Haspritareni
Sendy Mubarak
Formed on March 8, 1922
Officialy opened its first brewery
three years later

Focus on Mexico City and

the surrounding areas

“Modelo” was the first brand to

be produced, followed by
“Corona” a month later
 First entry into the U.S beer
1997 market in 1979 distributed by
surpassed Heineken as Amalgamated Distillery
America’s top imported Products, Inc.
beer

2007
Mexico’s best selling beer, and
the world’s 4th best selling
beer

Dominate the Model

o
Mexican market with 37%
Produce all its beer FEMSA
FEMSA 63%
domestically in Mexico
and export to foreign
markets
Market Share, 2007
 • Mainimport
• Main competitor in the
competitor
•Mexican
MainGrupo
against competitor
marketModeloin U.S Market
withown
• Have
• Produce 45%
all of market share
distribution
their products
•channel
Popularwith
domestically brand : Budweisser
inOXXO Holland (largest
•chain
Produces
•Markets ofits its beers
as ainpremium
convinience
beer foreign
stores in
markets
import Central
with and North taste
superior America)
• •Second
•Partnered with Grupo
Sole distributor
in import of Coca
market Modelo to
distribute
share its products
Colatoproducts
Grupo in Mexico
Modelo in Mexico
and
Centraland
• Owns America
operates
distribution companies

Competitors
Ad
Ad
Ad
• Absorb Tax
(Pricing Strategy)
• Direct Distribution
• Have a great
distribution channel
• Acquisition
• Fun in the sun”
(Marketing Campaign)

Strategy
S.W.O.T
 STRENGTHS

• As an imported beers,
Corona has a great market
share in the U.S
• Have a great relationships
with its distributors in the
United States
• Have a popular brand image
and marketing campaign
WEAKNESSES

Unable to quickly respond

to market demand, because
production processes
performed in Mexico, so
the availability of products
in the U.S. to be limited
OPPORTUNITIES

There’s a large beer drinking

markets in Mexico and U.S

Increasing popularity of light

beverages and flavored alcoholic
beverages

Partner with Anheuser-Busch to

continue expand into other
international markets
 THREATS
Possibility of future
increases in taxes and tariffs

Anheuser-Busch & InBev

merger
 Five Forces Model
Because consumers have many choices
of substitute beverages. Beer
Startup costs of a brewery have New
substitutes include liquor, flavored
always been extremely high BuyersEntrants
Subtitutes(
alcoholic drinks, non-alcoholic beer, and
and need a constant cash flow(Medium)(Low) High)
Suppliers
beverages in general
(Low)
for maintenance Competitiv
e Rivalry
(High)
Commodity products are
easily replaceable, and
that means that
Bargaining power of suppliers have little
buyers is medium because power.
of the differentiation of Due to the size of Grupo
Modelo, suppliers would
the taste of the beer itself
certainly not want to lose
business with them.
Overall, the beer industry
The industry is highly
is very attractive to
competitive, so it is important
compete in
to develop a strategy that will
help do well against pressures
 2008 Financial Ratios
Grupo Anheuser- Competitor
FEMSA Heineken Sab Miller Industry Sector
Modelo Busch Average
Profitability Ratios:
Gross Profit Margin 53% 46% 56% 65% 52% 54% 23% 13%
Operating Profit Margin 73% 13% 22% 8% 16% 27% 8% 4%
Net Profit Margin 20% 8% 13% 2% 12% 11% 5% 3%
Return on Total Assets 15% 10% 4% 4% 10% 8% 4% 3%
Return on SE 18% 20% 13% 8% 14% 15% 7% 7%
EPS $ 4.58 $ 0.75 $ 2.97 $ 0.71 $ 1.43 $ 2.09 - -

2008 Financial Ratios

Grupo Anheuser- Competitor
FEMSA Heineken Sab Miller Industry Sector
Modelo Busch Average
Liquidity Ratios:
Current Ratio 4.07 0.89 0.47 0.94 0.65 1.40 1.15 1.47
Quick Ratio 2.66 0.59 0.35 0.69 0.42 0.94 0.80 1.09
Working Capital 29,181 (4,735) (13,276) (309) (1,870) 1,798 - -

Financial Analysis
 2008 Financial Ratios
Grupo Anheuser- Competitor
FEMSA Heineken Sab Miller Industry Sector
Modelo Busch Average
Leverage Ratios:
Debt-to-Assets 24% 63% 80% 78% 51% 59% - -
Lont-Term Debt-to-Capital 2% 32% 52% 67% 33% 37% - -
Debt-to-Equity 31% 169% 404% 360% 106% 214% 6516% 4983%
Long-Term Debt-to-Equity 2% 47% 109% 201% 49% 82% 4403% 3274%
Times-Interest-Earned 24,69 4,41 3,98 2,52 3,21 7,76 - 1,15

2008 Financial Ratios

Grupo Anheuser- Competitor
FEMSA Heineken Sab Miller Industry Sector
Modelo Busch Average
Activity Ratios:
Days of Inventory 137.08 52.75 103.47 90.67 50.20 86.83 - -
Inventory turnover 2.66 6.92 3.53 4.03 7.27 4.88 1.35 2.52
Average Collection Period 45.29 23.37 45.24 48.18 30.76 38.57 5.09 82.10
Other Important Ratios:
Dividen Yield $ 0.048 $ 0.002 $ - $ 0.029 $ 0.001 $ 0.020 - -
P/E 9.56 63.68 0.00 30.16 597.07 140.09 7.40 134.40
Dividend Payout 46% 15% 13% 88% 41% 40% - -
Internal Cash Flow $ 44,238.00 $ 66,920.40 $ 14,373.60 $ 6,499.00 $3,190.00 $ 27,044.20 - -
 Financial Ratios
2008 2007 2006
Profitability Ratios:
Gross Profit Margin 53% 55% 55%
Operating Profit Margin 73% 73% 74%
Net Profit Margin 20% 21% 20%
Return on Total Assets 15% 17% 14%
Return on SE 18% 19% 15%
EPS $ 4.58 $ 4.74 $ 3.61

Liquidity Ratios:
Current Ratio 4.07 4.99 5.57
Quick Ratio 2.66 3.75 4.49
Working Capital 29,181 30,604 29,391

Leverage Ratios:
Debt-to-Assets 23.78% 17.76% 15.71%
Lont-Term Debt-to-Capital 2.40% 2.36% 0.00%
Debt-to-Equity 31.21% 21.60% 18.64%
Long-Term Debt-to-Equity 2.46% 2.42% 0.00%
Times-Interest-Earned 24.69 14.28 13.09

Activity Ratios:
Days of Inventory 137.08 106.44 95.51
Inventory turnover 2.66 3.43 3.82
Average Collection Period 45.29 27.10 23.05

Other Important Ratios:

Dividend Yield 4.77% 4.34% 2.42%
P/E 9.56 10.40 15.34
Dividend Payout 45.62% 45.16% 37.13%
Internal Cash Flow $ 44,238 $ 42,089 $ 36,863
 Recommendation
• Anheuser-Busch to help distribute and
promote Grupo Modelo beers in the United
States
• Expand to international market such as China
and Australia
Gracias