Foreign Market Entry and Diversification

2785 words 12 pages
Assignment #3 Foreign Market Entry and Diversification
Daniel S. Carrera
Dr. Kimberly Anthony
Strategic Management - BUS 599
Strayer University – Newport News
4 August 2011

This paper will identify and discuss the trends in global beer markets. It will discuss how Modelo’s International expansion was made possible through strategic partnerships with experienced distributors in local markets. The paper will focus on how Modelo should enter in the foreign market and what is the best strategy. We will discuss various challenges Modelo will face from his competitors and whether he should diversify his business to promote growth.

During the past five years, on a pure alcohol-equivalent basis, beer has increased its
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The international expansion of Modelo´s products began in the south and southwest of the United States, where Mexican beer was widely accepted.
Popularized with the slogan “Change your whole lattitude”, in the eighties Corona Extra became the imported beer with the largest growth in the history of the United States. Through the middle of the decade the business world noted the “Corona Phenomenon”. Later Corona Light started production and exportation exclusively for the US market.
In 1985, Grupo Modelo started exploring other markets, first Canada and Japan, and later on Australia and New Zealand. In 1989, they entered Europe when an office in Brussels was opened, later Russia, Africa and Latin America. Today, the Modelo brands are present in 159 countries. Corona Extra is currently the number one imported premium beer in the US, Modelo Especial is the third, Corona Light the sixth, Pacífico the fifteenth and Negra Modelo the nineteenth.
In early 2006, Grupo Modelo unveiled the first Corona Extra and Corona Light billboard in Times Square in New York City, the world-known plaza where people from all over the world pass by. It is the first time in the history that a Latin American brand presents such a prominent billboard in Times Square. That same year, a joint venture was formed with Constellation Brands, an international leader in the wine and liquor industry, which distributes


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