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Boston Beer Company Diversification

1581 Words7 Pages

At the direction of Management, a review of Boston Beer Company’s (BBC) corporate strategy specific to business diversification, as well as BBC’s stance on ethics, social responsibility, and environmental sustainability. Corporate Strategy: Business Diversification Diversifying a business can certainly aid company growth. A diversified enterprise’s corporate strategy embroils three aspects: (1) Selecting new industries to enter and how to enter such industries; (2) leveraging val-ue chain relationships across business segments, when appropriate, into competitive advantage; and (3) commencing actions that improve the collective performance of the organization’s assemblage of businesses (Thompson, Peteraf, Gamble, & Strickland III, 2018). …show more content…

BBC’s diversification into related businesses has been a long process. For most of its lifetime, BBC focused on crafting beer, but it diversified its offerings by entering ofther alcoholic segments: hard iced tea with Twisted Tea® in 2001, hard cider with Angry Orchard® in 2012, and hard sparkling water Truly Spiked & Sparking in 2016 (Boston Beer Co., n.d.). In 2011, BBC created A&S, a craft beer incubator, which “brought new brands and beverages: the Traveler Beer Company®’s shandy; Angel City Brewery’s® small batch beers; Coney Island Beer’s® hard soda and root beer” (Boston Beer Co., n.d.). This diversification has, thus far, been successful due to the appropriate strategic fit* of such actions. Opportunties for strategic fit includes “(1) transfering specific expertise, technological knowledge, or other assets between respective value chains; and (2) engaging in cross-business collaboration and knowledge sharing to create new competiteively valuable resources and capabilities” (Thompson et al, 2018). Both segments (i.e. BBC and A&S) have similar characteristics—“sell products in similar size quantities and price points through essientially the same distrubtion channels to the same customer types; and manufacture offerings with comparable alcohol content in similar production processes, of which fall under the same regulatory enviroment” (Boston Beer Co., 2016). As such, both segments are combined for financial statement purposes and are treated as one aggregate company (Boston Beer Co.,

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