COM 361: International Business Case Study

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Analysis of MillerCoors' operations in the Czech Republic.

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COM 361: International Business Case Study

  1. 1. IN THE CZECH REPUBLIC<br />SYCK Consulting Inc.<br />December 2, 2009<br />
  2. 2. Beer. <br />The third most consumed <br />beverage in the world.<br />
  3. 3. Agenda<br /><ul><li> The Czech Republic
  4. 4. Market Environment
  5. 5. Operations
  6. 6. Regulation &</li></ul> Recommendations<br /><ul><li>Conclusion & Questions</li></li></ul><li>Policy<br />Economy<br />History<br />The Czech Republic<br />
  7. 7. History<br /><ul><li>Former Soviet state</li></ul> in Eastern Europe.<br /><ul><li> Used to be part of</li></ul> Czechoslovakia.<br /><ul><li> Member of NATO,</li></ul> EU, WTO and OECD.<br />
  8. 8. Policy<br /><ul><li> Parliamentary </li></ul>rep. democracy<br /><ul><li> Border with </li></ul>four countries.<br /><ul><li> Czech capital and</li></ul> largest city is Prague.<br /> Pop. ~1.25 M.<br />
  9. 9. Current Economic <br /> Climate<br /><ul><li> Stable, industrialized,</li></ul> & prosperous economy.<br /><ul><li> Free-floating Czech</li></ul> Koruna (CZK) is currency.<br /> Possible adoption of Euro.<br /><ul><li> Relatively unaffected by</li></ul> Global Credit Crisis. <br /><ul><li>Large player in European</li></ul> Import and Export market.<br />
  10. 10. Competition<br />Consumer Characteristics<br />The Industry<br />Market Environment<br />
  11. 11. Consumer <br />Characteristics<br /><ul><li> Beer consumption part of </li></ul> Czech culture since 10th C.<br /><ul><li> Greatest beer </li></ul> consumption globally<br /> per capita.<br /><ul><li> High brand loyalty and </li></ul> not price-sensitive.<br /><ul><li> Changing consumer </li></ul>trends.<br />
  12. 12. The Beer <br /> Industry<br /><ul><li> Production is 7x </li></ul>higher (per capita)<br /> than average country.<br /><ul><li> Exports account for</li></ul> 19% of total Czech <br /> beer production.<br /><ul><li> Strong local influence</li></ul> on imports and exports.<br />
  13. 13. Competition<br /><ul><li> Main competitors include</li></ul> AB-InBev (15%) and <br /> Heineken (12%).<br /><ul><li> SABMiller holds largest</li></ul> share with 47.7%.<br /><ul><li> Market is saturated with</li></ul> foreign firms dominating<br /> Czech beer market.<br />
  14. 14. Current<br />Relation to SABMiller<br />Future<br />Operations<br />
  15. 15. Relation to<br />SABMiller<br /><ul><li>PlzenskyPrazdroj in</li></ul> the Czech Republic.<br /><ul><li> Top Brewing Company
  16. 16. MillerCoors: </li></ul> SABMiller & <br />Molson Coors <br />
  17. 17. Current <br /> Operations<br /><ul><li> Exporting
  18. 18. Importing
  19. 19. Power in the Czech </li></ul> Beer industry<br />
  20. 20. Future<br /> Operations<br /><ul><li> FDI by production
  21. 21. FDI by acquisition
  22. 22. Act as a distribution</li></ul> agent<br />
  23. 23. Regulation & Recommendations<br />
  24. 24. Regulation<br /><ul><li> 18 years is legal </li></ul> drinking age.<br /><ul><li> Zero tolerance of </li></ul> drinking and driving.<br /><ul><li> Taxes on alcohol in the</li></ul> Czech Republic are on <br /> the rise.<br />
  25. 25. Shrinking Markets<br /><ul><li> FDI unrealistic.
  26. 26. Importing unrealistic.</li></li></ul><li> Recommendations<br /><ul><li> Act as distribution</li></ul> agent for Czech<br /> brands in U.S.<br /><ul><li> Shrinking Czech </li></ul>market as opportunity <br /> for MillerCoors.<br /><ul><li> Market for excess</li></ul> inventory in U.S.<br />
  27. 27. Prague<br />A New Experience<br />
  28. 28. IN THE CZECH REPUBLIC<br />Questions?<br />SYCK Consulting Inc.<br />December 2, 2009<br />

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