Foreign Market Entry and Diversification

Foreign Market Entry and Diversification

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The Corona Beer (Modelo) Case Study

Identify and discuss the trends in the global beer markets

The beer market has witnessed rapid changes over the past decade. Earlier on, the industry was recording an annual growth of over 5% due to an increase in sales within the emerging world economies. However, the positive growth was brought to a halt by the global economic recession which saw the 2009 annual growth rate drop to 0.5%. In 2010, the recovery of several economies from the economic downturn resulted into a positive growth of 2.3% in the beer market. Continued development in the economic world and the increase of beer consumption in both the emerging and developing economies has stabilized the beer market. The annual growth was recorded as 2.7% in the previous year, 2011 (Global beer market trends, 2011).

The world’s leading brewers have remained relatively strong despite the changes in the industry. The leading brewers are listed below alongside their 2011 market share.

1. AB-InBev - 18%

2. SABMiller - 14%

3. Heineken - 9%

4. Carlsberg - 5%

The four giants account for almost half of the total beer market. The other top performers to make the top 10 list named in order include: Shanghai’s Tsingtao, Beijing’s Yanjing, Mexico’s Modelo, Molson’s Coors, Japans’ Kirin and Turkish Anadolu. Currently, the market share of commercially produced beer stands at 40% of the global total alcohol market. That is a positive growth from the 34% value recorded in 2000 (Johannes, 2003).

Europe still remains the leading beer market accounting for 44.3% of the total beer sales worldwide. However, the economic downturns and changes in legislation have resulted into a decline in beer sales across Europe. For instance, the Czech Republic which is the leading nation in terms of per capita beer consumption saw its total consumption decline...