Compare Adolph coors financial performance compared to that of AB in the year 1977; and

then in 1985.

2. Who was better positioned vis-a-vis the five forces in 1977? in 1985?

Basics:

-1985 was a great year for Coors

-domestic beer consumption = flat

-coors revenue 84% and 100% operating income = brewing division

- * Coors announced to open a 2nd brewery in Virginia Valley

Competition

-Domestic Producers = 96% of supply (avg 67$ per barrel)

-42% Retail Margins, 12% Wholesaleers Margins , 12% Taxes

a. Procurement

-raw materials = maj cost = half of revenues

-raw material costs = 1/4 Agriculture Input (low supplier power since competitive market)

-raw material costs = 3/4 Packaging inputs (steel and aluminum manufacturers promoted cans)

-Major brewers started backward integration = made their own cans

b. Production

-two steps: brewing and packaging

-Scale economies in packaging increased

-double brewery scale would cut costs by 25%

-utilization 90% in 1970s, and 80% in 1980s

-Big players expanded aggressively. Small players closed.

c. Distribution

-asd