Analysis of Molson's India Entry Strategy

Author: Deepak Shrivastava (imdshrivastava@gmail.com) Page 1
This report is a result of my own work which was an integral part of my full time MBA
program. Prior permission must be taken from the author before copying or
reproducing this work.

Molson Coors Brewing Company
Theoretical Analysis of International Strategy

Table of Contents
Introduction ............................................................................................................................................5
Industry Overview...............................................................................................................................5
Market.............................................................................................................................................5
Category..........................................................................................................................................5
Competition ....................................................................................................................................5
Discussion on Industry’s Globalization ...........................................................................................7
Company Overview.............................................................................................................................9
Products:.........................................................................................................................................9
Discussion On Company’s degree of globalization .......................................................................10
Company’s Analysis and Internationalization strategy.........................................................................13
Capabilities Analysis..........................................................................................................................13
Drivers for internationalization.........................................................................................................14
Market Selection...............................................................................................................................15
Country Analysis: India......................................................................................................................16
Industry Analysis...............................................................................................................................18
Possible benefits and challenges with India strategy ...........................................................................20
Possible Benefits...............................................................................................................................20
Possible challenges ...........................................................................................................................20
Conclusion.............................................................................................................................................22
References ............................................................................................................................................23
Appendix ...............................................................................................................................................26

Table of Figures
Figure 1: Top 10 Beer players in world 2011. .........................................................................................6
Figure 2: Few large mergers and acquisition in recent past in Beer Industry ........................................6
Figure 3: Consolidation of global beer industry......................................................................................7
Figure 4: Molson Coors in emerging markets.......................................................................................10
Figure 5: Revenue break-up per business unit .....................................................................................10
Figure 6: Molson Coors Basic Organizational structure........................................................................11
Figure 7: AAA model analysis of Molson Coors strategy. .....................................................................12
Figure 8: Resources and Capability analysis on Molson Coors.............................................................13
Figure 9: VRIO Analysis of Molson Coors..............................................................................................14
Figure 10: YIPs globalization framework...............................................................................................14
Figure 11: International Driver for Molson Coors.................................................................................15
Figure 12: CAGE Analysis between India and US. .................................................................................17
Figure 13: Hofstede dimension of culture. ...........................................................................................17
Figure 14: Porter's Diamond for India...................................................................................................18
Figure 15: Five Forces Analysis of Indian Beer Industry........................................................................19
Figure 16: Web plot of five forces of Industry......................................................................................19
Figure 17: Popular beer categeory in world. ........................................................................................26
Figure 18: PEST Analysis on India..........................................................................................................27

Introduction
Friedman (2005) said “ The World is flat” but is the world really flat or is it the narrow vision of
Friedman with respect to outsourcing (Rugman and Oh 2008)? Levitt in 1983 said “Companies must
learn to operate as if the world were one large market” but do really company have the knowledge
and capability to pursue this global strategy. Here in this report we see one of a global strategy and
its analysis pursued by one of global top player in beer industry Molson Coors Brewing Company.
Recently Molson Coors entered India by forming Join Venture with Cobra India by buying majority of
the controlling stocks. This move raised curiosity and I decided to understand the motive and the
possible benefits or harm a company from US will get by making alliances with a relatively unknown
brand in India. I will try to deduce the possible drivers behind internationalization of Molson. These
various analyses will be supported by appropriate frameworks on International business laid out by
famous academics.
Industry Overview
Market
Let us start with an overview of industry. As per Euromonitor report total beer market as of 2011
was about 244 billion litres and Beer is the largest selling category in Alcohol industry i.e. 78% with
growth rate of 2% in 2011 and wine is second in rank. In terms of markets, Asia with 34% of total
beer consumption is the largest market for beer by volumes with Western Europe as the second
largest market (15%). However Europe is the largest market in terms of value about 25% of global
beer sales by value. Majority of the mature markets like Europe and America have seen a negative or
very less growth in beer segment in recent year’s mainly due recession. There is lot of growth
potential in emerging markets like, China, Brazil, and India. China already account for approximately
25% of the global market by volume (Euromonitor 2012).
Category
In terms of beer category the largest selling beer is lager beer (Euromonitor 2011) and with in lager
beer, economy category is the most favoured beer segment. The premium beer segment is mostly
favoured in Asia Pacific region1
where as standard in western markets.
Competition
The top 5 players in beer market have approximately 48% of market shares. Below are top10 market
leaders in beer industry and their respective market shares. The market is lead by the multinational
1
More details of category and their growth can be seen in Appendix

corporations and they are spread across the globe. Chinese firms are growing their power by
consolidation on their home markets and also recent expansion in foreign markets.
Figure 1: Top 10 Beer players in world 2011.
Source: Author complied from Euromonitor 2011, Global prospects for beer companies
In last 10 years beer industry or entire alcohol industry has seen a lot of consolidation
(Euromonitor,2011) i.e. lot of regional players are merging with small local or with other regional
players to become bigger and bigger. We have seen in past majority of the big players are a result of
big merger at some point in time. Like Inbev bought Anheuser Bush to become number one player,
Adoph Coors merged with Molson Canada, SAB buying Miller and so on. Below see few large M&As
happened in Industry.
Figure 2: Few large mergers and acquisition in recent past in Beer Industry
Source: Adapted from Euromonitor 2011, Global prospects for beer companies
Although most of the growth in this industry in 2011 was organic growth but still a lot of mergers
and acquisition have been done with a reason to expand in new geographies (Euromonitor, 2011).
Some of the recent merger and acquisition are the examples of this expansion. Japan’s Kirin Holding

bought Schincariol in Brazil, SAB Miller bought Australian Fosters and etc. Below figure gives the
representation of how fast the consolidation is taking place in alcohol industry.
Figure 3: Consolidation of global beer industry
Source: Adapted from Euromonitor (Feb 2010): Strategies for growth in an increasingly consolidated beer market.
Discussion on Industry’s Globalization
The industries around the global are going global but how much global is your industry is difficult
question to answer. Lot of literatures have been published on this and lot of debate is there on this
question. Grionld (1990 cited in Zeng 2005) says some industries are more global than others and in
those industries, industry (i.e. sector) factors are more important than country. Heston and
Rounwenhorst (1994 cited in Zeng 2005) and his followers argue in their research that country
factors are more important than industry.
Author like Rugman and Oh (2008) argue that businesses are going regional rather than global. Their
empirical study show that majority of the business is done in the famous triad region rather than the
global. Ghemawat (2007) also support a similar fact that world is currently “Semiglobalized” rather
than globalised. He also said assertively that “Most types of economic activity that can be conducted
either within or across borders are still quite localized by country” (Ghemawat, 2007, pp11)
But question of whether beer industry faces the same fate or is it has its own path to follow, the
degree of internationalization is again difficult to measure. However few reports from Euromonitor
(2012,2011) and Datamonitor(2011) say that beer still operates in “Local Global Market” and still in
majority of countries the local players are having the number one spot.

Using the globalization scale used by UNCTAD i.e. Transnational Spread Index (Gillies, 1998), for
measuring the internationalization of a company, can be used to measure the internationalization of
this industry as well (taking just top 10 players in account), but having that analysis is out of scope
this report.
A research from Morgan Stanley done by Zeng in 2005 on degree of internationalisation of various
sectors of US industry shows that few companies moves tightly with the movement of their related
industry and few don’t. The company which has high reliance on region stays in region irrespective
or movement of its supporting sectors movement. Beer Industry in a sector which is highly
dependent on agricultural industry and as agricultural fairly immobile so does the Beverage industry.
Looking to the industry with Ghemawat’s (2007) “AAA” Model we see that top firms like AB-Inv, SAB
Miller uses more of a adaptive and aggregation strategy than arbitrage. They tend to use Arbitrage
strategy on regional basis. These players have many local brands in their portfolio which they
produce and sell with the national or regional boundary hence they are using adaptive strategy. Like
SAB Miller has over 200 brands and one brand is “Haywards” (Euromonitor 2012) which is only
popular in India. As per report from Jernigan (2009), most of the alcoholic beverages are consumed
in the country in which they are produced.
These players or in fact most of the top players have only few global brands which they sell and
produce globally to reach economies of scale as their aggregation strategy. For example Coors light
from Molson Coors, Budweiser from SAB Miller, Heineken and many others.
As regional arbitrage strategy these companies produce few beer brands away from their home
market in a new country (taking advantage of low cost of transportation or low cost of production)
to export to near by regions or some are planning to make global sourcing decision. Like India is now
a global sourcing hub for Carlsberg Brewery2
, Molson plans to use India and China as the production
hub for Asia region3
Based on information available about the industry and its players we see that these companies are
having multi-domestic or localization strategy (Peng 2009,pp 354).These studies show that beer
industry still operates in regional environment than global environment.
2
IANS, 2008, Thaindian News [Online] http://www.thaindian.com/newsportal/business/carlsberg-to-make-
india-its-global-sourcing-hub_100110069.html (accessed on 20th April 2012)
3
Molson Coors Brewing Company 2011 [Online]
http://www.molsoncoors.com/en/News/International/Corporate/2011/June/23/MOLSON%20COORS%20AND
%20COBRA%20INDIA%20ANNOUNCE%20INDIAN%20JOINT%20VENTURE%20TO%20BREW%20AND%20MARKE
T%20COBRA%20BEER%20IN%20SOUTH.aspx (accessed on 20
th
April 2012)

Company Overview
Molson Coors Brewing Company have a history of over 100 years in brewing (Annual Report, 2012).
The company is a result of a merger happened in 2005 and currently operates in 40 countries with
65 products in its portfolio. The company operates in four major business segments Molson Coors
Canada, MillerCoors LLC USA, Molson Coors Brewing Company (UK) limited and Molson Coors
International for other countries. The major products in its portfolio are, Coors light, Coors, Miller
Lite, Molson Canadian, Carling (UK) Cobra (UK) and etc (Datamonitor 2011). It has acquired licence
to brew and sell Heineken, Amstel Light, Asahi & Asahi and Murphy’s in US. Company’s key markets
are US and Western Europe with 80% of the sales coming from these markets.
Products:
Molson has a diverse portfolio with of 65 strategic and partner brands but its inclination is more
towards the standard lager beer category. Company is 6th
largest producer of standard lager
(Euromonitor,2012) . Its signature brand includes Coors Light (ranked in Top 10 beer brand in
world), Coors, Molson Canadian, and Carling (UK). Coors light is the major brand for the company
and account for 51% of total beer sales. Coors light is a premium lager brand and company is using
this brand to expand globally (Euromonitor, 2012).
We can see the threat of globalization of industry is taken seriously by Molson Coors as in 2011
company had the following growth strategy “our growth strategy: to grow profitably in our core
businesses through brands and innovation; to grow in new and emerging markets; and when it meets
our strict shareholder return criteria, to grow through mergers and acquisitions.” (Annual Report,
2011, pp24).
The company has taken various steps to implement above strategies; the most important step taken
was extending its reach to emerging markets. Below figure shows the approach taken by company in
various emerging market.

Figure 4: Molson Coors in emerging markets.
Source: Adapted from Molson Coors Brewing Company Annual New York Analyst/Investor meeting (accessed on 17
th
April
2012)
Here in this paper we will analyse Molson steps of moving to India with a Joint Venture with Cobra
brewing company. Before we start the analysis let us first see how much globalise in this firm.
Discussion On Company’s degree of globalization
Using transnational indices method let us try to see the degree of internationalization of Molson
Coors. Here I will only take foreign sales and number of countries as the factors, although Gillies,
1998 in UNCTAD write that there are 4 factors4
of this calculation.
Lets us first see how much revenue Molson Coors generates from its foreign sales. Below table
represents revenue data from each business unit.
Figure 5: Revenue break-up per business unit
Source: Author compiled using Molson Coors Annual Report 2011
We can see only 32% of total sales is coming from its international business units as compared to
68% from home country (i.e. US).
4
4 Factors are: Foreign sales, number of employee in foreign country, foreign assets and number of countries.
Business Segment Sales USD Percentage of total sales
Canada 2067 0.19
US 7550 0.68
UK 1333 0.12
International 122.6 0.01
Total Sales 11072.6

Molson has its operation in 40 countries (Annual Report 2011) hence the “network spread index”
(UNCTAD, pp27) will be 40/1785
=0.25, thus the TSI will be .08 or just 8%. Gillies, 1998 says higher
the index value higher is the degree of internationalization of the firm (pp29). However this should
be check against the competitors to get a relative level. A quick of TSI with its partner company SAB
Miller (i.e. 32%6
) shows that SAB Miller has high degree of internationalization.
In order to combat the globalization threat Ghemawat 2007 said companies use either one or
combination of ‘As’ strategies i.e. Aggregation, Adaptation or Arbitrage. Looking closely to the
strategies we see that Molson uses all three Adaptation, Arbitrage and Aggregation strategies. It
starts with Adaptive strategy but later it uses the knowledge or resource from adaptive strategy and
implements Arbitrage and aggregation strategies.
Adaptive: Looking at the strategies so far used by the Molson Coors for international expansion, we
see clear evidence of using Adaptive strategy. Coors before merging with Molson bought leading UK
beer brand in 2001 to enter UK market7
. Similarly Coors bought Molson Canada to enter Canadian
market and later formed Molson Coors. Now it has formed a joint venture by buying majority of
controlling stake in Cobra India to enter India. Molson Coors have 65 brands but its brand Coors
light is currently sold across different countries. Majority of its brands stay in their national
boundaries (Molson Canadian in Canada, and many other regional brands Annual Report, 2011,pp
3).
Molson Coors organizational structure also suggests that Molson uses more of adaptive strategies.
Its business units are divided as per geographical area rather than global function (see below
organization structure of Molson Coors). Peng (2009, pp356), says that firms with localization or
multi-domestic strategy have organizational structure divided as per geography.
Figure 6: Molson Coors Basic Organizational structure.
Source: Compiled by Author using Annual Report 2011
5
178 countries as per UNTCAD for Network spread index
6
SAB Miller operate in 75 countries (Annual Report 2011) and has 78% of revenue coming from foreign
operations.
7
BBC News 2001, Carling Sold to US brewer[online] http://news.bbc.co.uk/1/hi/business/1726850.stm
(accessed on 20th April 2012)
Molson Coors Brewing Company
Molson Coors Canada MillerCoors LLC USA
Molson Coors Brewing
Company (UK) Limited
Molson Coors
International

Aggregation: Once Molson has acquired a brand in any country for example Carling in UK and gained
the knowledge, then it sells this Carling to other countries, like Ukraine (in 2011) to find new market
and to reach economies of scale. Similarly we can see it is selling its American brand Coors light to
new markets like Sweden (in 2008), Russia (in 2010) and Dominican Republic (in 2011). We also see
its partnership with E&J Gallo Winery8
(California, USA) to reach economies of scope. Company has
limited brand presence in Premium lager segment hence it partnered with other companies example
Asashi (from China), Heineken and others (Annual Report 2011, pp3-4) for US market to gain the
economies of scope.
Arbitrage: We see very few strategies that can be categorised as Arbitrage strategies, I will only
categorise them as regional base strategy rather than global strategy. For example buying up Cobra
India production unit for producing beer for South Asia rather than global (don’t forget India is the
largest producer of alcohol in the world). This step has a future benefit of using Indian production
unit to serve global customer rather than just regional customer.
We still see large degree of adaptive strategies in Molson Coors. Below graph is the graphical
representation of the points discussed earlier.
Figure 7: AAA model analysis of Molson Coors strategy.
Source: Author compiled using Ghemawat (2007): Managing Difference, Harvard Business Review, pp9.
After looking at the degree of globalization of Industry analysis let us try to assess the company and
the move it had taken to implement the growth strategy.
8
Datamonitor (2011), Company Profile: Molson Coors Brewing Company [Online] Available from:
http://360.datamonitor.com/Product?pid=121CB525-1758-45BC-B50E-142610E64F1A (accessed on 20
th
Apr
2012)
0
1
2
3
4
Arbitrage
Aggregation
Adaptation

Company’s Analysis and Internationalization strategy
Capabilities Analysis
Peng 2009 argues that companies gain a competitive advantage over other rival firms because of its
unique resources and capabilities (pp64-65). These capabilities and resources view give detail
analyses of value adding resources. Below figure shows resources and capabilities view of Molson
Coors.
Figure 8: Resources and Capability analysis on Molson Coors.
Source: Compiled by author using Peng 2009, pp65-66 and Annual Report 2011
The above analysis will help in analysing few capabilities which give Molson Coors a competitive
advantage. Johnson et al 2011 and Barney 2002 cited in Peng 2009 suggest that capabilities which
passes all four criteria’s i.e. Valuable, Rarity, Imitable and Non substitutable (VRIN, Johnson et al
2011) or Valuable Rare Imitable Organization (VRIO, Barney 2002) are the capabilities which give any
firm a sustained competitive advantage (Peng 2009,pp72).
A quick check with these criteria shows that there are few capabilities which pass these tests and
using these capabilities company can gain competitive advantage.
Financials
Generated 900 million cash from operating activities.
And has cash available for any long term planning.
1/3rd of shares are owned by the family.
Physical
12 Brewing and Packaging plants, 3 distribution warehouses, 1 malting facility and various administrative
offices.
Additionally Molson have got tie up with many partners in various part of world to use their production and
warehouses.
Technological
Company hold several patents related to beer dispensing systems, packaging, and certain other innovations.
Advance packaging techonogy in place majority of the brewing facility
Organizational
Company have strong network of distributor in US and UK. It also has strong network of suppliers using
contracts.
It manages 21 brewers across the global.
Human Resource
Company has very experienced managerial team in place.
It has outsource majority of administrative work including HR.
With recent cost cutting program company has reduced the work force.
Innovation
Company is known for it innovative low calorie products.
It is also known to have lot of innovation in packaging and designing.
It also has excellent marketing skills and branding skills.
Reputation
Its key brands posses lot of brand value.
Our Brew program for uniting the employees.
High focus on reducing negative beer print.
Tangible Resources and Capabilities
Intangible Resources and Capabilities

Figure 9: VRIO Analysis of Molson Coors.
Source: Compiled by author using The VRIO Framework, Peng 2009, pp72, Annual Report 2011, Molson Coors Overview
[Online] http://www.molsoncoors.com/~/media/Molson%20US/en/PDFs/About%20Us/MCBC%20Overview%20-
%2004092012 (accessed on 19
th
April 2012)
Another debate whether these capabilities are transferrable to international markets or are these
capabilities cross-boarder capabilities (Peng, 2009, pp81). We will see in later section whether these
capabilities will give any advantage to Molson in India.
Drivers for internationalization.
Every organization has drivers or motives behind its internationalization. As per YIP 1989 there are
various drivers for globalization in an industry. Below figure shows various drivers of globalization.
Figure 10: YIPs globalization framework.
Source: Adapted from Ning 2012 Lecture slides 2: Global Environment Analysis.
Out of these four drivers I see that market driver, cost driver and competitive drivers are main
drivers for Molson Coors. Below is the detailed description of the drivers.
Capabilities Valuable ? Rare?
Costly to
Imitate?
Exploited by
Organization?
Innovative designers for Packaging Yes No Yes Yes
Company culture to support innovation Yes Yes Yes Yes
Innovation capabilties in producing low calorie beers Yes Yes Yes Yes
Marketing Skills and branding skills Yes No Yes Yes
Managerial experience Yes No Yes Yes
Ability to maintain long term parterships Yes No Yes Yes

Figure 11: International Driver for Molson Coors.
Source: Compiled by author using Yip 1989: Global Strategy … In a world of Nations? And Euromonitor 2011, Beer in India,
Global Performance and prospects for beer, Strategies for growth in an increasingly Consolidated Global Beer Market.
As per Johnson et al 2011 YIP framework help company to decide the scope of internationalization
(pp269). We see from the figure Molson Coors move to globalization has multiple driver and strong
reason to move to a country like India. While major reason is still the cost but global competition has
also pushed Molson to take this step.
As already discussed in previous section big player like SAB-Miller, AB-InBev have already started
using the regional arbitrage strategy for their performance and hence any delay from Molson will
build up the pressure of globalisation.
Market Selection
International expansion never comes without the risks or threats of differences between the culture,
society, values and beliefs. Many theorists have described various frameworks for selecting any
international market. Hollensen (2011, pp263) described Market screening model for selecting
market and Anderson and Buvik (2002, pp349-350) also described systematic and non-systematic
approaches for market selection.
Ghemawat(2001) also suggested that while selecting any country don’t just look at geographic
distances, he suggested to consider four dimensions of distances which a company should analyse

i.e. Cultural distance, Administrative distance, Geographic distance and Economic distance (CAGE
Analysis, pp1). He has also said that more the country differs from other more the risk company has
to bear in order to enter foreign market (pp1).
We cannot deduce from given data whether Molson Coors has used any framework to select the
market? or this move is the result of extending old partnership with Cobra9
.
Country Analysis: India
Macro analysis of country shows that India offers lot of advantages to the businesses (See the PEST
analysis in Appendix).It is the 4th
largest GDP in real growth in the world and being ranked 5th
in
terms of FDI attraction (CIA World Factbook 2011). It has a huge market potential with a growing
middle class with a growing income at a rate of 10% per year (Euromoney 2011),
Porter (1980,pp73) also explains firms can gain significant competitive advantages by highly localised
process which can be achieved by greater understanding of these distances we talked about.
Ghemawat’s CAGE analysis with respect to India shows that India is not only geographically distant
from US or Canada but it is distant in all the 3 aspects of framework (detailed analysis can be seen
below). These differences add to the complexity of the relationship or risk of investment by the
company.
9
Coors and Cobra had partnership for UK distribution since 2009:
http://www.molsoncoors.com/en/News/International/Corporate/2011/June/23/MOLSON%20COORS%20AND
%20COBRA%20INDIA%20ANNOUNCE%20INDIAN%20JOINT%20VENTURE%20TO%20BREW%20AND%20MARKE
T%20COBRA%20BEER%20IN%20SOUTH.aspx (accessed on 16
th
April 2011)

Figure 12: CAGE Analysis between India and US.
Source: Author compiled using Ghemawat 2004, Distance Still Matters. pp5
Cultural and societal differences can also be seen using Hofstede five dimensions of culture cited in
(Peng 2011, pp103). We can see that India and USA are different in all the five dimensions of
cultural aspect.
Figure 13: Hofstede dimension of culture.
Source: Adapted from Hofstede cited in Peng 2009: Global Strategic Management, pp103
Basic analyses of these models tell that Molson has to put a lot of effort in managing these
mentioned differences. One of the three actions suggested by Peng (2011, pp114) to effectively
manage the culture is to expand knowledge or strengthen the cross-cultural intelligence. Using
Peng’s recommendation, I think Molson has effectively exploited one of its competitive advantage
(i.e. maintaining strategic partnerships) mentioned earlier. Molson Coors had strategic partnership
Cobra UK since 2009 and now it has extended it with Cobra India. Cobra beer has a strong
knowledge of Indian culture and other aspects of society hence using this Molson will be able to
bridge these cultural, administrative, ethical and economic gaps.
Country Power Distance Individualism Masculinity Uncertainty Avoidance Long Term Orientation
India 77 48 56 40 61
US 40 91 62 46 29
Ranking

As per Bruce Kogut cited in Johnson et al 2009, companies can improve their value chain network by
taking locational advantage of the country. Michael Porters theory of “The competitive advantage by
nations” explains how the companies can analyse various locational factors using Porter’s Diamond
to design competitive strategies.
Figure 14: Porter's Diamond for India.
Source: Compiled by author using Porter’s Diamond in Johnsan et. al 2011 Exploring Strategy, pp270
Industry Analysis
Above analysis of India (Alcohol industry) explains that India offers huge potential market and
attractive market to grow but various government laws and taxation policies make it tough for
companies to gain the advantage. Not only government but also various industry forces create lot of
pressure or barriers for a company to grow. Below five forces analysis of the Indian beer industry
shows the intense rivalry, various threats from new entry, substitute and power of supplier and
customers. Looking at the analysis it is not a easy path to follow to improve global supply chain.

Figure 15: Five Forces Analysis of Indian Beer Industry.
Source: Compiled by author using Porter’s Five Forces framework from Peng 2009, Global Strategic Management,pp36,
Euromonitor 2011, Alcohol Drinks In India, Beer In India, MCX India(2011): MCXMetal & Energy, Barley [Online]
http://www.mcxindia.com/SitePages/ContractSpecification.aspx?ProductCode=BARLEY (accessed on 04
th
Mar 2012)
IAPA(2011): Alcohol Atlas of India.[Online] http://www.indianalcoholpolicy.org/alcohol_atlas_download.html (accessed
on 04th Mar 2012)
The quick web plot of the five forces shows that there is a lot of pressure from suppliers, threat from
substitute and intense rivalry due to big local firm. Molson Coors have to find the strategies to fight
these problems we see here.
Figure 16: Web plot of five forces of Industry.
Source: Compiled by author using description is figure 15 above.

Possible benefits and challenges with India strategy
Above analyses help not only to understand the possible challenges in entering the industry but also
help company to formulate necessary strategies. Michael porter cited in Peng (2009, pp44) suggests
that there are 3 generic strategies using which companies can over come the five competitive forces.
 Cost leadership
 Differentiation
 Focus
Possible Benefits
Molson move to India can be categorized as a move to implement cost leadership. The low cost of
production in India (using Cobra’s production plant), low distribution cost in India (Cobra already
have excellent Indian and international export network10
). Molson can exploit these networks and
huge production unit to improve its global supply chain in ling term or regional distribution in Asia in
short term.
The joint venture with Cobra can provide architecture, access and efficiency i.e. value creation
advantages (Ning 2012). As already discussed, Cobra already has production plants and strong ties
with lot of supplier and distributors in India (especially in South India). Molson by acquiring Cobra
has gained the access to these advantages. Cobra not only have production unit in India but also
have presence in the Indian market11
. Cobra’s strong international export ties and award winning
premium Cobra brand will be valuable assets for Molson.
Possible challenges
As already identified Indian government and society put lot of threats to Alcohol industry (Detailed
policy and intervention can be found in IAPA website12
). The government strict stand on not
liberalizing the alcohol consumption is a big threat. Considering the few capabilities which Molson
Coors has we see that its capability of innovative marketing campaigns and getting brand recognition
using advertisement. We see this capability cannot give Molson Coors an advantage here in India
where any kind of marketing and promotion of alcohol is banned.
10
Cobra started exporting beer from India in 1990 and now export beers to 40 countries. Molson Coors (2009),
[Online]http://www.molsoncoors.com/en/News/United%20Kingdom/Corporate/2009/June/06/Molson%20Co
ors%20UK%20and%20Cobra%20announce%20formation%20of%20new%20joint%20venture.aspx (accessed
on 19
th
April 2011)
11
Cobra India has 0.5% of market share in India, Euromonitor 2012, Beer In India pp10.
12
http://www.whoindia.org/LinkFiles/Mental_Health_&_substance_Abuse_alcohol_atlas6.pdf

Another capability of making innovative low calorie beer will not give advantage as the market for
light beer in India is still underdeveloped and Indian customer prefer strong beer which will continue
to rise in coming years(Euromonitor 2011).
Another capability of creating innovative package design can also take a back seat here as in India
still glass bottle and cans (trend started recently, Euromonitor 2011) are used across the Industry
and more over these creative designs cannot be promoted as advertisement.
We see that few of these capabilities are not cross-boarders capabilities (Peng 2009, pp81) or are
not transferrable to give competitive advantage.

Conclusion
Molson Coors brewing company move to India to implement their growth strategy has both positive
and negative side of it. Molson Coors analysis tells us that it has got more than 100 years of
experience in this industry and has got lot of knowledge in merger and acquisition and making
strategic partnerships. We also saw that it has got few capabilities which give it a sustainable
competitive advantage but the question of cross border capabilities is where Molson has to put lot
of effort.
We saw India is really a thriving market and for being a global payer one cannot afford to lose this
opportunity. The growth of India is what everyone in attracted to but it has its own downside due to
government and society. These factors are clearly identified in various frame works. Molson move
with Cobra is to take advantage of its old strategic partnership. This can give Molson a lot of
advantage and can help them to overcome few of the challenges. This partnership will also help to
fill the gaps and will give them capabilities which they are missing.

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Appendix
Figure 17: Popular beer categeory in world.
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Figure 18: PEST Analysis on India.
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