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Beer monopolistic competition
Beer monopolistic competition
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In the instance of the legal environments surrounding Anheuser Busch InBev, one particular situation that the company is currently addressing is the issue of the “Budweiser” trademark For more than a century, the Budweiser brand beer has long been recognized by its respectable logo that has been on both the cans and bottles for years. There has been some speculation in the global arena about the legitimacy of the trademark and its natural origin which according to an article entitled “Understanding International Property Law” began in the Czech Republic many years before Anheuser Busch first began production in the United States (Bird, 2006).
Despite the company's long reign of prosperity within the beer brewing business as well as certain aspects of international law that must be recognized, Anheuser Busch InBev is not immune and will have to address any contentious issues that are brought forth regarding potential trademark infringement (Carter, 1997). The same article goes on to talk about how a notable Czech brewery “Budejovicky Budvar” has been in a legal battle with the American brewing company every since Anheuser Busch was founded in St. Louis, Missouri in the late 1800's (Bird, 2006). Based on the claim of the small Czech brewery, Anheuser Busch has no right to use the name “Budweiser” being that the small brewery had long used the name for beer that was brewed centuries before Anheuser Busch gave their flagship beer the exact same name.
One of the barriers that I noticed in this dilemma between Anheuser Busch InBev and Budejovicky Budvar is that despite a lot of pragmatic attempts on both sides to come to a peaceful resolution regarding the rights to use the name “Budweiser”, there appears to be no end in sight...
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...ment of Justice implied that because Anheuser Busch InBev acquired Modelo, the brewery now has a near monopoly of the beer that that is bought and sold within the United States. Both the Department of Justice and Anheuser Busch after much deliberation, were able to negotiate and agree to give privilege brewing rights for Modelo products to a third party brewing company. The federal government went on to argue that if only one brewery, such as Anheuser Busch InBev dominated and held a monopoly on beer production, then the customer would be force to pay a much higher price as result. “Monopolizing” is talked about in this weeks chapter in which Carter describes that most countries, including the United States, have some sort of oversight on the production and pricing of certain goods within the marketplace that may be scarce but in high demand by the population.
Quality of products can be quoted as one prime quality that can be observed in both the companies. Manufacturing products that are environmental friendly is another common and a beautiful aspect that is common among the two companies. Molson Coors, being an old company is driven mostly by its values whereas Anheuser Busch is moving forward with the motto of “dreaming big” [1]. Both the organizations treat the employees in a good manner making them feel like they are a part of the organization and providing them with the necessary amenities required. Passion and Integrity are a few ground values on which both the companies rely on. Values such as Creativity of Molson Coors sometimes result in a product that might not gain popularity among the customers which would result in the loss of time, thinking and money invested in getting the product out. On the other hand, Anheuser Busch is growing popularity day by day by setting up high goals and working hard to make its presence
Belgium is known for a culture of high-quality beer and this concept was formulated by an electrical engineer from Fort Collins, Colorado. The electrical engineer, Jeff Lebesch, was traveling through Belgium on his fat-tired mountain bike when he envisioned the same high-quality beer in Colorado. Lebesch acquired the special strain of yeast used in Belgium and took it back to his basement in Colorado and the experimentation process was initiated. His friends were the samplers and when they approved the beer it was marketed. In 1991, Lebesch opened the New Belgium Brewing Company (NBB) with his wife, Kim Jordan, as the marketing director. The first beer and continued bestseller, Fat Tire Amber Ale, was named after the bike ride in Belgium. The operation went from a basement to an old railroad depot and then expanded into a custom-built facility in 1995. The custom-built facility included an automatic brew house, quality-assurance labs and technological innovations. NBB offers permanent, seasonal and one-time only beers with a mission to be a lucrative brewery while making their love and talent visible. In the cases presented by the noted authors (Ferrell & Simpson, 2008), discusses the inception, marketing strategy, brand personality, ethics and social responsibility that New Belgium Brewing Company has demonstrated. The key facts with New Belgium Brewing Company are the marketing strategy, promotion, internal environment and social responsibility with the critical issues of the public, brand slogan, growth and competition.
This report addresses the issue of whether Amsterdam Brewery should invest and promote new products or continue to focus on current products. And, whether Jeff Carefoote should pay attention to whole brands or spent expense to increase brewing capacity. The report describes a strategic plan to ensure Amsterdam Brewery’s competitiveness in the market.
Before a series of antitrust acts and laws were instituted by the federal government, it was not illegal for businesses to use any means to eliminate competition in late nineteenth-century America. Production technology was now advanced to the point that supply would surpass product demand. As competition in any given market increased, more and more companies joined together in either trusts or holding companies to bring market dominance under their control (Cengage 2). As President Theodore Roosevelt was sworn into office in 1901, he led America into action with forceful government solutions (“Online” 1). Roosevelt effectively regulated offending business giants by the formation of the Department of Commerce and Labor, the Bureau of Corporations, and antitrust lawsuits.
From our research, Anheuser-Busch is content with being the number one beer company in the world, increasing sales each year in operation. We found that Anheuser-Busch met many views associated with the world, business, and behavioral dimensions. The company also displayed its stability as we reviewed one of its most successful products Budweiser, owned by Anheuser-Busch, under the marketing view and the financial view. Not only do they hold almost half of the market share in the industry but their stock prices, sales volume, and net sales have all increased from 2002 to 2003. We also looked at Budweiser in terms of geography and culture. We found due to the fact that the "western" countries consume the majority of beer, it only makes sense that Anheuser-Busch concentrates on that market. Along these lines, another key goal that is also important to Anheuser-Busch is to boost other beer markets that are located in other cultures, where at the time beer is not a major consumption.
The United States of America has a population of 260 million people. This is a big market with substantial purchasing power. As of 1997, Breckenridge Brewery has only expanded eastwards and the west side of the country is relatively untouched. According to Exhibit 2 in the case study, there were only distributors in 32 states and that leaves a potential to sell to the other 19 states as w...
commercial appeals to the demographic of young, entrepreneurial males who are wanting to become more than what people and society thinks they should be and they not only want to sell their beer but also have an underlying message of pro-immigration.
Adolphus Busch was a salesman, and perhaps the greatest ever heard of in America. Granted that he knew good beer and ever sought after it, the fact remains that he did not know how to make it at all. In the same course of time he found men who did, but that was a mere detail. He sold the bad almost as efficiently as he sold the good. He could have sold anything. At one point in the early career of Anheuser Busch, its product was so inferior that St. Louis rowdies were known to project mouthfuls of it back over the bar. Adolphus kept on selling it, and it became better, and eventually the best in America.
Many businesses used this new process to raise the price of their competitors. They did this by putting constraints on entry restrictions (Woods 1986). At the state level, other laws were put in place to support the Food and Drug Act mainly to help local and area producers who were and would be facing new nat...
Heineken expands constantly and recently has purchased Hartin, 4th largest brewer in China, and invested $33M in convertible bond of Tsing Tao Brewery. Heineken’s partnership with Budweiser in Italy allowed Budweiser to brew, market, and distribute “Heineken” and make use of Budweiser’s distribution network in Europe.
In 1890 Congress passed the Sherman act with their first attempt at protecting businesses and consumers (FTC, 2008). This act was to touch down on monopolization and unreasonable trade. In order to protect consumers and businesses it was decided that monopolization; or the practice of controlling a single market, was an unfair act. Not only do monopolies have the ability to play with prices, but they can also decrease the quality of their products (Amadeo, 2013). For the consumer it could be unfortunate if, for example, the only supply of baby formula is controlled by a single company and the price increased by 40% after competition has been knocked out.
The Boston Beer Company is able to obtain relatively low-cost funds for their working capital and expenditures. The company is constantly in search of the lowest cost items without suffering the quality of their products. The company has thrived and has been able to expand to become successful due to their ability to achieve this.
For American beer producers to succeed in entering the beer market in Austria, they must thoroughly understand the cultural, economic, and political forces that control the society and how if functions. The Austrian society and its culture is one of the older, more prominent societies in Europe. Although the country has advanced itself into a highly industrialized and technologically advanced entity, Austria can present significant obstacles when it comes to trying to do business.
Deutsche Brauerei has been a family owned and operated corporation for 12 generations, which has created a high level of focus and control. Each generation has kept the management and operations processes relatively simple, centered on brewing practices and quality. Deutsche Brauerei’s rapid growth in recent years can be attributed to several factors. First and foremost, the company’s success is centered on the product itself, which has won numerous quality awards and is quite popular in Germany. Another contributing factor to the recent growth may have been a bit inadvertent. The purchase of new equipment in 1994, which was necessary as a result of a fire that destroyed the old equipment, allowed the company to increase brewing capacity and efficiency. Finally, Deutsche Brauerei’s decision to enter the Ukranian market in 1998 contributed significantly to the rapid growth. The collapse of the U.S.S.R. brought market reforms, and Deutsche Brauerei jumped on the opportunity to enter the fragmented beer industry, capture the large population and capitalize on the prime location in Europe. Lukas Schweitzer was savvy enough to hire local expert Oleg Pinchuk away from a competitor as the marketing manager, and Oleg was instrumental in building the business in Ukraine by securing accounts and implementing the field warehousing to support distributors. Deutsche’s beer was hugely popular in the Ukraine almost immediately, and volume sales more than offset the depreciation of the Ukrainian currency. Sales in Ukraine accounted for 28% of Deutsche’s total sales, and skyrocketed from 4,262 euros in 1998 to 25,847 euros in 2001.
The beverage industry is highly competitive and presents many alternative products to satisfy a need from within. The principal areas of competition are in pricing, packaging, product innovation, the development of new products and flavours as well as promotional and marketing strategies. Companies can be grouped into two categories: global operations such as PepsiCo, Coca-Cola Company, Monster Beverage Corp. and Red Bull and regional operations such as Ro...