Every firm’s goal is to ensure that it gains a competitive advantage over other organizations in the same industry. To attain a competitive position, a firm needs to adopt a competitive strategy that will enable its products or services to have a larger market share than its competitors. The following discussion analyzes ways the Adolph Coors Brewing Company lost its competitive position in the mid-1970s and the mid-1980s. In addition, the discussion examines areas that the company can change to improve its future prospects.
Coors Company is one of the successful brewing companies in the U.S. since its inception, it commands a large market share. However, between the mid-1970s and the mid-1980s, the company experienced slow growth, and its competitive advantage started declining. This was due to several factors that included first, increased competition. Companies such as Miller Brewing Co and Anheuser-Busch affected the market growth of the company (Hawthorne 145). High competition in the brewing industry during this period resulted in the loss of customers and decreased target market. Competition is a crucial aspect in determining the success of a firm. High product competition in a specific industry slows the market growth of a specific product in the industry (Hawthorne 87). This occurs when the products can be easily substituted by the consumers in the market. There were no differentiating factors in the beer industry, hence most consumers could consume any brewing companies’ products.
Another issue that affected the company’s competitive position is niche beer companies. Some companies were developed during this period specifically to satisfy the niche market demand in the market (Hawthorne 127). For instance, in the 1970s, companies such as Plank Road Brewery produced beer for the niche market, which affected the target of the firm. In addition, the niche market companies produced beer at a lower price compared to Coors, which affected the demand for its products. Niche market companies may affect the market leaders of a certain product if they capture a bigger market share in the market. In addition, the company failed to address the price difference between its products and other companies’ products (Hawthorne 116). Product price is one of the competitive tools used by many organizations to win a competitive position or market share.
The market boycott of the firm’s beer also affected its competitive position in the market. The workers union had asked a nationwide boycott on consuming Coors beer. This happened in 1966, where the labor union lobbied the public against consuming the company’s products. The media covered the whole event, which meant that the organization’s public image had been affected (Hawthorne 164). Organization Public image plays a significant role in the growth of a firm since it creates consumer loyalty (Hawthorne 53). This enables repetitive buying, which improves the organization’s competitive advantage.
The final issue that contributed to the decline of the company in the mid-1970s is due to the lack of an effective marketing strategy. The company was more concerned about the beer quality and its image (Hawthorne 152). This affected the organization sales considering that most of the major company competitors had adopted competition strategies that would enable them to gain more market share. Due to poor marketing, the company failed to sell all its products to the market. Marketing is crucial for product growth in the market. The marketing strategy should be guided by the competitors’ plans and the organization’s future strategy (Hawthorne 109). Hence, it is crucial for a firm to develop a marketing strategy that will enable it to gain more consumers. The company failed to develop these strategies hence leading to decreased sales and loss of competitive position (Hawthorne 19).
Ways of Improving the Future Prospects of the Firm
The firm needs to change the following aspects to ensure success and growth of the firm. The first area that the firm needs to improve is its competitive strategy. The strategy chosen determines the success of the firm in the industry (Hawthorne 87). The organization’s competitors have adopted pricing policies that are based on the beer brand and the target market. Hence, the firm ought to adopt a pricing strategy as one of its plans to gain a competitive advantage in the market. In 1982, the firm adapted an aggressive marketing technique aimed at improving its public image and enhancing its sales. The new marketing technique enabled them to increase sales and improve its public image. This should involve stratifying the market based on the economic power of the consumers. Market stratification will enable the organization to determine the price of beer depending on the location of the consumers (Hawthorne 76). In addition, the firm should adopt a global competitive strategy by investing in more new countries to increase its sales. The firm can also gain a competitive advantage by providing the consumers with quality products that match their needs and expectations.
The following diagram illustrates how the company can maintain its competitive position. Coors can use cost leadership, focus, or product differentiation strategy to win more market share. The diagram illustrates Porters’ competition strategy.
The final area that the firm must improve its investment is in the niche market. The firm should produce products that are aimed at a certain niche market to reduce the level competition from this area of the market (Hawthorne 42). This can be achieved through market research to determine the niche market needs and expectations. Investing in this strategy will increase the organization’s market share, which will increase the level of profit made by the company. In addition, the firm needs to improve its marketing strategy to capture all market segments and enhance its distribution (Hawthorne 44).
Hawthorne, Fran. Ethical Chic: The Inside Story of the Companies We Think We Love. Boston: Beacon Press, 2012. Press.