Foreing Market Diversification: Corona Beer Essay Example

experience in effectively marketing and selling imported premium beers.

Sales of Corona beer grew rapidly in the 1980s, making it the second most popular imported beer in the United States by 1988 (Thompson, Strickland, ; Gamble, 2010, p. C249). By partnering with Gambrinus Incorporated for distribution in 1986, Corona expanded its growth in the eastern states of the U.S. This alliance with both American companies helped Modelo gain a larger market share in the country. In 2004, Corona outsold the previous top-selling beer in the U.S. by approximately fifty percent (Thompson, Strickland, ; Gamble, 2010, p.).

Grupo Modelo established a subsidiary in the United States, known as Procermex Incorporated. The main role of Procermex Incorporated was to coordinate, support, and supervise Barton Beers' and Gambrinus' distribution operations (Thompson, Strickland, ; Gamble, 2010, p. C250). To expand its market share in the industry, Grupo Modelo could focus on entering the Chinese and Australian markets. China has a large population with significant potential for high demand.

Australia's high capita consumption of beer makes it a potentially easy market to enter. The company should maintain its practice of partnering with distributors in the target regions, as this approach has been successful in allowing local distributors to adapt the beers to suit the preferences of their respective markets. The company initiated its strategic vision for expanding its market share abroad long ago, exporting Corona to regions like Hong Kong, Singapore, and Greece in 1990, as well as to countries with a strong beer-drinking culture, such as Holland, Germany, and Belgium ("Grupo Modelo," 2010).

In 2010, construction began on the eighth Grupo Modelo brewery in Nava, Coahuila. This could potentially weaken Grupo Modelo's position

in the market and lead to the termination of their partnership with Anheuser Busch. To enhance their strategy, Grupo Modelo should develop a reciprocal relationship with Anheuser-Busch to help distribute and promote their beer products in the United States. (Source: "Grupo Modelo," 2010)

This partnership had mutual benefits for both companies in Mexico and would offer additional support to Grupo Modelo's brands and distribution network in the United States. Furthermore, depending on the merger's outcome, Grupo Modelo could potentially enjoy a more interdependent partnership with this company that has the potential for growth. To diversify its business, Grupo Modelo has the chance to expand its product line to include low calorie drinks and flavored alcoholic beverages, thereby increasing its market share. As more consumers increasingly prioritize healthier lifestyles, there is a growing demand for lighter, lower calorie beers.

Moreover, beer companies have a considerably smaller customer base among women. The inclusion of flavored alcoholic beverages in their offerings has the potential to attract more female customers. In conclusion, Grupo Modelo has ample opportunities for business growth. There is potential for international expansion into markets like China and Australia, which could boost the company's profits. Furthermore, partnering with other distribution companies has the potential to expand the business at both regional and global levels.

The beer consumption dynamics vary greatly across the world, but the emerging beer market is showing a trend towards upward growth.
References (2008, June 11). InBev Proposes Combination with Anheuser-Busch. Retrieved November 7, 2010, from http:/? /? www. ab-inbev. com
(2010, November 7). Grupo Modelo. Retrieved November 7, 2010, from Grupo Modelo Web site: http:/? /? www. gmodelo. com
Thompson, A., Strickland, A. J., & Gamble,

J. (2010). Crafting and Executing Strategy: The Quest for Competitive Advantage Concepts and Cases (2009 Custom ed.). Boston: McGraw-Hill Learning Solutions.