Boston Beer Company Section 2 Team 1 Zhannur, Kairat, Dana, Assel, Didar Part 1 – How attractive is the beer industry? Market share growth: Forecasted growth of total domestic beer sales up to 7-10 %. Consumer Tastes: Consumers became more sophisticated and required a broader range of specialty drinks. Potential entrants: New breweries with their original receipts. Substitutes: Other alcohol drinks. Customer requirements? How do firms compete? Key Success Factors More flavor and natural product, fresh beer Unique receipt, brewing contract It was time of the unique receipt Place: Everyplace (restaurants, beverage markets) Monitoring and controlling system Short shelve-life, always fresh Achievable price Seasonal beer Competition leads to the decrease of …show more content…
Social pressure on drinking and driving, increase in the drinking age and healthy diet propaganda make this business not attractive. There are Big Three companies, which held 77% of the market and combined with them Top 10 that held cumulatively 93% of the beer shipments in 1994. The rest 5.3% were shared by industry shipments and 1.4% by craft brewers. Recommendation: The market is overall attractive and new entrants will have good chances to succeed. In proof, there is a fact that Major Domestic Producers try to reposition to the specialty segment investing in existing craft brewing companies. The Second Tier Domestic Producers faced troubles such as significant loss of market, high excess production capacity and financial hardship, making their segment weak enough to start business in there. The importers have the disadvantages in high shipping costs, weak distribution network, inability to control product freshness and margin squeezing due to a weak dollar. Part II – Recommendations how best to compete in the industry 1. Differentiate yourself: Own receipt and quality control over the whole process. Create a valuable brand delivering a part of tradition, spirit and expertise