Financial Analysis of Molson Coors Brewing: Performance Evaluation and Porter's Five Forces

finance

Contents
Introduction...........................................................................................................................................2
Porter’s five forces model......................................................................................................................2
SWOT Analysis.....................................................................................................................................3
Part 1.....................................................................................................................................................4
Part 2.....................................................................................................................................................5
Conclusion.............................................................................................................................................6
References.............................................................................................................................................7
Appendixes............................................................................................................................................8

Introduction
The report brings out an analysis of Consumer Goods Molson Coors Brewing by using the
financial statements of 2016, 2017 and 2018. The company is a registered company under
ASX that is engaged in manufacturing and selling the malt beverage products that includes
alcoholic beer, lager, stouts, cider, and ales. It is headquartered in Colorado and currently
operates in Canada and US (M.D.C. HOLDINGS, INC., 2017). This report aims to evaluate
the company`s performance through profitability analysis, return on equity, Dupont analysis
disaggregate return on equity by using productivity, profitability and leverage. Further part-2
calculates return on net operating assets and its disaggregate so that it can evaluate the
company`s performance.
Porter’s five forces model
Threat of new entrants- economies of scale within the industry has forced the company to
rethink their strategies. Rise in breweries has affected the company`s revenue in a negative
way but the industry does not slow down. However, rapid increase has transformed the
cultural trend that has become a threat as millennial account for 57 percent demand for craft
beers.
Bargaining power of buyers- As Molson coors and its other two top competitors grab the
market of nearly 66 percent. It is a critical component for Molson coors and the industry. As
the company managed to acquire the craft breweries and is successful in overcoming the
threat of substitutes so their product prices have not affected the company`s performance
(M.D.C. HOLDINGS, INC., 2017).
Threat of substitutes- other alcoholic beverages such as coolers, lemonade, tea, spritzers and
other innovation named hard cider are substitutes to beer. Weekly beer consumers are turning
to legal cannabis especially in Colorado State.