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Write up a review of a famous (or not so famous) corporate blunder, which either ruined a company, or dealt it a significant setback. How did the actions of the various stakeholders affect the incident?

A famous corporate blunder that came to mind was the joint venture between Anheuser-Busch a multinational organization formerly a U.S. own brewery that held 45 percent of the US beer market and Grupo Modelo a Mexican company that brews the popular beer Corona that held 50 percent of its home beer market and exported to 124 countries in the globe. Anheuser originally entered into the venture with Modelo with the thought that the partnership would yield them profit and the access to the distribution of a major imported beer the Corona which was experiencing exponential growth in the US beer market. Anheuser’s venture was a purchase of 17.7 percent stake into Grupo Modelo for $477 million in 1993 with a contracted option to increasing its share to 50.2 percent. Unfortunately for Anheuser, Modelo backed door them with a renewed deal for ten years with its existing US distributor slashing the hopes of Anheuser to gain the exclusive brand rights to distribute in the US.

Due to this set back Anheuser opted to increase its stake in Modelo in 1997 that lead to several months of dispute regarding price and further international arbitration when they decided to fully increase they stake to the 50.2 percent permitted under contract. At both instances the settlement were made of $602 million and $556 million respectively that double Anheuser’s stake value in Modelo based upon the Mexican stock exchange but left them without controlling stake of the board and the ability to control decisions because they only had 10 of the 21 seats on the board of directors. The venture was undoubtedly a bad marriage that could have been avoided if Anheuser negotiated a penalty clause that protected it against side deals that could affect its supply or distribution chain.

Modelo’s action was intentional to gain a strong hold in the US market with the passing of the North American Free Trade Agreement fearing that US companies would stifle its brand in its home market. Modelo’s action was unethical they already had a US distributor that had a shared stake in its venture but in my opinion understandable it was about to face a more competitive global market without the protection of tariffs which were to be phased out under NAFTA. Anheuser premature announcement to US distributors about controlling the Corona brand resulted in a setback that affected its own distribution system and subsequent stakeholders. Write up a review of a famous (or not so famous) corporate blunder, which either ruined a company, or dealt it a significant setback. How did the actions of the various stakeholders affect the incident?

The disastrous joint venture was an unfortunate event but could have been reasonable foreseen with the contract having significant redundancies. Anheuser recovered and equally survived via acquisition by the Belgium based company InBev SA becoming a wholly own subsidiary that operates 12 breweries in the United States and has a close working relationship with 500 independent wholesalers that provides extraordinary service to retailers. A joint venture is a major risk especially ventures between a local and foreign partner which in some cases forces them to rescind a business venture.

However, there are methods that can be implemented to reduce damages or in Anheuser-Busch case the potential of a repeat incident. There should be a business continuity plan and a clear assessment of the risk, the design, and implementation of suitable control environment. In Anheuser’s case they were separated from the decision making in their joint venture. A Retained Transition Organization (RTO) established with roles defined and governance structures and responsibilities documented and approved which again in Anheuser’s case roles were not defined to disprove decision as part of a team because they were handled as a partner without a voice.


Gillespie, K. and Hennessey, H. (2011). Global Marketing, 3rd edition, South-Western, Cengage Learning pages 275-276

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