Corona Case Study

Case Study: Corona

Corona Beer: From a Local Mexican Player to a Global Brand

This case studies the spectacular growth of Corona beer and the challenges it faced in its rise to become America’s number one beer import. A Wharton style analysis follows with a recommendation and SWOT analysis (Appendix).

Situational Analysis

o Corona Extra is the Mexican domestic market leader (56% market share,) the top U.S. beer import since surpassing Heineken in 1997 and the fourth largest beer (by volume)

in the world.

o Corona built up production and distribution channels at a cost of $300M in 1997, insisting on quality brewing standards and developed close relationships with two U.S. importers.

o Corona’s clear glass bottle and marketing strategy has produced great success with its unique and highly recognizable “fun in the sun” and escape theme.

o Corona’s advertising created a new “non-beer drinker” segment due to its non-macho tone and the beer’s bland taste which attracted women and “2nd choice” buyers.

o Heineken is determined to recover their long held import leadership status and has now partnered with Corona’s domestic rival FEMSA, posing a viable threat in both the U.S. and at home in Mexico.

Problem Statement

o Corona has encountered setbacks in sales due to fierce competition from international rivals, intent on replacing it as top U.S. beer import. Corona cannot maintain its leadership status and continue on its 7.8% growth path (net sales) without reversing this recent trend.

Critical Issues

o On a quest to regain its lost number one exporter status, Heineken recently formed a successful partnership with FEMSA, immediately boosting exports 18.7% in the third quarter of 2005, causing Corona to suffer decreased sales.

o Surveys show that rival FEMSA produces the top seven tasting beers in Mexico with Corona Extra coming in at number 23.

o Corona has an effective ad campaign based on themes of “fun in the sun” and humorous...