Beer industry overview Strategic group analysis Identification of the Market Niches & key players Market niches are lower-priced brands, less alcohol, and less calories.
Strategic Group 1 Coors Threat Of New Entry New entry barriers are very high because there are only three major breweries. Entry of barrier depends on physical resources, economies of scale and distribution channels.
Power Of Buyers Coors have backward-integration in manufacturing metal can to gain bargaining power in metal industry. Buyers depend on disposable income. If disposable income declines, consumer will shift to lower-priced brands.
Power Of Suppliers The power of suppliers is less because according to S&P industry survey Coors has wholly owned subsidiaries to perform some of the non-brewing functions, but not at the scale A-B does. Coors have their own bottling and canning works along with other related businesses such as ceramics, the material used in their filtering process.
Threat Of Substitute Product Threat of substitution is less for Coors; there is less close substitute.
However Craft beer could substitute, but prices of Craft beer is high. Therefore the height of substitution is low.
Competitive Rivalry Between Incumbent Firms Internal rivalry is very high due high market concentration. It depends on demand disposable income as mentioned above which increases internal rivalry.