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Case Analysis:

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on 16 November 2015

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Transcript of Case Analysis:

Case Analysis:
Boston Beer Company

By: Wisam Moshe, Badih Mouannes, Trevor Wollman, Ashley Clinger, Clark Lacerda
Introduction
Key Issues
SWOT
P.E.S.T.
Porter's Five Force
VRIO Analysis
Financial of Boston Beer Company
Business Level Strategy
Business Level Strategy Continued
Corporate Strategy- Vertical Integration
Corporate Level Strategies- Synergies
Strategic Recommendations
Discussion Questions:
Boston Beer Company started by Jim Koch in 1984
Jim was a recent college graduate. Had received his MBA from Harvard.
Secret family beer recipe had been in the family for 6 generations
Went public in 1995 and had 30,000 investors.
They offered class A stock for $15 to loyal customers and $20 through an IPO
Boston Beer Company is semi vertically integrated
Control production of beer, all beer is made in house
However, hops are all outsourced
Distribution is also outscoured, primarly with MillerCoors
Marketing is controled in house with multi- million dollar ad campaigns often seen on ESPN
Recently Spent $50 million on Freshest Beer Program
Upscale Beer Profitable- Utopia
Creation of Angry Orchard Hard Ciders
In 2013 controlled 40% of hard cider market
2011 created Alchemy & Science
Purpose was to help brewers find better beer ingredients, promote better brewing methods
Keep their growth strategy being careful not to dilute brand name
Differentiate by product quality
Top quality yeast, hops & malt
Keep reputation for uniqueness
(General Environment)

Tangible Resources
Boston Beer Co.'s World-Class Bewery
Organizational Resources
Intangible Resources
Boston Beer Co.'s Reputation
Strengths
Weakness
Opportunities
Threats
Distribution
Product differentiation
Fresh Beer Program
Sales Force
Tied-up Capital
Dependent on Foreign Suppliers
Reliance on independent
distribution
Identity loss as a Craft Brewery
Emerging Market
International Expansion
New Product Development
Decline in Beer Industry
International Imports
Increasing number of
Craft Breweries
Industry Leaders with
CraftLike Beer
Industry Consolidation
Maintaining Their Image as a Craft Brewery
Maintaining Growth within the Industry

2012 2011 2010
ROA:
17% 24% 19%
ROE:
24% 36% 30%
ROR:
10% 13% 11%
Current Ratio:
1.84 1.88 1.55
Quick Ratio:
1.33 1.37 1.18
Inventory

Turnover:
13.08 15.06 17.43
Debt to Equity:
47% 47% 56%
Debt to Assets:
32% 32% 36%

Competitive Advantage is achieved through product differentiation
-41 Different kinds of craft beer
-Priced over other import/premium beer

Continuously invest in bringing better beer to their customers
-$50 million to reduce the time beer sits before reaching consumers

Focus strategy is seen through purchase of breweries and technology to better serve the same customers.

Economies of Scale
-Not many firms are able to scale their craft brews to the size of Boston Brewing.
-Presents future issue of being craft

Economies of Scope
-Alcoholic beverages other than beer
Keep the focus on their freshest beer program
Tasty & Flavorful products
Grow Brand recognition outside the U.S
Use power and influence over distributors to increase growth where 3 tier system exists

Strategic Recommendations:
External Analysis

Threats

Emerging Market
International Expansion
New Product Development
Decline in Beer Industry
Opportunity
Political/Legal:
Economic:
Sociocultural:
Technological:
Three Tiered System ( Mfg, Dist., Retail)
Strict Laws and regulations on Beer Sale and Consumption in the United States.
Increasing and growing economy, with a larger Disposable income
Consumers are becoming more aware and Knowledgeable.
Advancements in supply chain through Efficiency and Quality.
When you think of Sam Adams, what comes to mind...Craft beer, Premium beer? What about Blue Moon and Shock Top?

Do you think The Boston beer company would loose a sizable amount of passionate consumers if they produced more than 6 million barrels ?
International Imports
Increasing number of
Craft Breweries
Industry Leaders with
CraftLike Beer
Industry Consolidation
Do you believe they could keep the quality of their beer if they produced more than 6 million barrels ?
Emerging Market

Threat Of New Entrants
Rivalry
Supplier Power
Buyer Power
Threat of Substitutes
LOW
HIGH
Moderate
LOW
HIGH
Microbreweries
Foreign
"Better Beer"
Switching Cost
Differentiation
Full transcript