Coors Case Study
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Coors followed an aggressive expansion strategy with nearly doubling its revenue This has primarily been due to large advertising budget spend on promoting new brands. Despite the increased revenue and advertising, the barrels sold has been up by only 15%. One of the reason could be the strategy of going with weaker wholesalers in new states who are willing to carry Coors as their lead brand. Coupled with higher standards for quality drove away some of wholesalers with 20% of franchises changing hand during the period.
Coors also faced operational issues largely due to alleged discrimination and stringent work policies. 1/5th of the work force went on strike in 1977 which continued till 1978. Since then Labor Union groups has boycotted Coors but it had proved ineffective. But now when company has decided to expand into Rockingham County, they may face an issue since labor union are strong in the markets that Rockingham plant is meant to serve.
Coorss operating practices had led to numerous strikes over the years by workers, and occasional suits by federal agencies. The grounds included alleged racial and sexual discrimination, mandatory lie-detector tests and loyalty oaths, and dismissals for reasons such as denigration of the Coors family and refusal to be searched at work. To quote a 1978 article in Forbes, “Coors ranks with J.P. Stevens on union hate lists.” The most recent strike was the one called in April 1977 by the Brewery Workers Union, which represented 1,500 of the companys 8,200 employees. Coors said that workers who crossed the picket line, employees transferred from other departments and new hires had returned the brewery to normal production levels in three weeks. The strike officially ended in December 1978 when workers voted to oust the Brewery Workers Union as their bargaining agent. Since then, the AFL-CIO and other groups had organized a boycott of Coors, which had finally retaliated with lawsuits that were still in process. According to Bill Coors, “This is the kind of war we want to get into, not shy away from.”5 The boycott continued in 1985, although independent analysts thought that it had proved ineffective. And Coors continued to be the only major brewer that was not unionized.