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Boston Beer Company Pest & Industry Analysis Jonathan Klingenberg. Boston Beer Company. Company Overview. Financial Information. The company went public in 1995, with a growth strategy of creating and offering the highest quality of full-flavored beers.

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Presentation Transcript
slide1

Boston Beer Company

Pest & Industry Analysis

Jonathan Klingenberg

boston beer company
Boston Beer Company

Company

Overview

financial information
Financial Information
  • The company went public in 1995, with a growth strategy of creating and offering the highest quality of full-flavored beers.
  • In 2010 their market value was 1,285 million dollars, which grew more than 8 times from their 147 million dollar value in 2000.
  • They have no bonds, preferred stock, or debt; and they have 13.6 million shares of common stock.
pest analysis political
Pest AnalysisPolitical

Factors

Analysis

pest analysis economic
Pest AnalysisEconomic

Factors

Analysis

pest analysis social
Pest AnalysisSocial

Factors

Analysis

industry analysis
Industry Analysis
  • The Boston Beer Company is in a very unique situation when it comes to defining their industry. They are an American craft brewer which requires them to be small, independent, and traditional:
porter s five forces
Porter’s Five Forces

Gray = low threat levelGold = moderate threat levelRed = high threat level

bargaining power of suppliers
Bargaining Power of Suppliers

BBC has such high standards for their ingredients that they will only get two-row malted barely and their hops from small family owned farms along the “hop belt”, along the 48th latitude. BBC insists they will never lower their standards to save money so as a result:

blue ocean strategy
Blue Ocean Strategy
  • Almost every bit of success that BBC has experienced over the years can be attributed to the fact that it was based on a complete blue ocean strategy idea when it was created in 1984.
  • When BBC started they marketed themselves as a domestically brewed premium beer, creating their own niche and allowing them to avoid direct competition with the giants of the beer industry.
  • They have kept this approach over the years and used it to become the largest US owned brewery.
slide20

Boston Beer Company

Competitor & Market Analysis

Jonathan Klingenberg

what beers are people drinking
Percentage of Sales in US by CompanyWhat Beers are People Drinking?

Bud Light Inbev

Budweiser Inbev

Miller Lite MillerCoors

Coors Light MillerCoors

Corona Extra Import

Natural Light Inbev

Heineken Import

Mich Ultra Inbev

Busch Light Inbev

Miller High Life MillerCoors

Guinness Import

Sam Adams Craft Brew

Most Popular Beers in US

size of american market
Size of American Market

This makes for a very large American beer market.

market analysis
Market Analysis
  • The US consumes the second most beer in the world.
  • In 2009 they consumed 2.877 billion cases, 80% of which was consumed by men.
  • They make up part of an expanding worldwide beer market expected to consume more than 2 billion hls by 2013.
state by state breakdown of consumption
State by State Breakdown of Consumption

Map of US Regional Drinking Groups. North Central, blue; New England, yellow; Middle Atlantic, orange; Pacific, red; South Coast, dark grey; Dry South, light gray. Groups are also identified as Wet, Moderate or Dry based on the % reporting 5+ drinking day in the past month and per capita apparent consumption of alcohol.

target market
Target Market

Although BBC’s regional sales are not disclosed they have been very open with the fact that the New England region still makes up for a large part of their sales and they continue to try and promote to that with their marketing efforts.

conclusion1
Conclusion
  • The American beer market is fiercely competitive. It consists of three primary players:
    • Domestics
    • Imports
    • Craft Beers
  • Domestics account for the majority of this market with the two largest companies (Inbev and MillerCoors) accounting for roughly 80% of it.
  • This makes entrance into the American market incredibly difficult for smaller companies and virtually impossible if they have to compete with these larger companies on a direct level.
  • BBC has been able to be successful by creating their own unique market and minimizing their direct competitors.
conclusion2
Conclusion
  • In this effort to minimize their competitors they have avoided strong points like:
    • The low price of domestics
    • The enormous amounts of money the larger companies have available to them
  • This means that BBC directly competes with higher priced imports and a select group of craft beers.
  • Which enables them to experience a market stronghold and continued success.
slide38

Boston Beer Company

Internal & SWOT Analysis

Jonathan Klingenberg

slide39
The Boston Beer Company has established itself as a powerhouse in their own niche market. They have been able to do this by:

As a result of these efforts BBC has established Sam Adams as the leader in craft beers, a product that routinely wins award after award, and one of the most recognizable brands in America.

bbc s 5 year performance
BBC’s 5 Year Performance

% increase

23.6%

N/A

284.7%

61.1%

*All numbers are in thousands

*In 2008 a product recall occurred and is the reason for the

lower numbers that year.

distribution chain
Distribution Chain

In the US, the alcohol is a 3-tier structure by law: producer, wholesaler, and retailer.

distribution
History of DistributionDistribution

Sam Adams does not specify sales by region but two things are known:

Over 99% of their sales comes from the US

A majority of their US sales comes from where the beer first started in the Northeast region

Even though the majority of Sam Adams sales are in the US they still distribute to over 20 other countries

1987-Sam Adams first became available in Boston and the New England market

1988-They expanded to the New York Market

1990-They moved into the DC and Chicago markets

1992-Started distributing to the western states like Oregon and California

1996-Established itself abroad for the first time selling in places like Germany, Ireland, Japan, and Hong Kong

Current Distribution

bbc s product line
BBC’s Product Line
  • BBC will routinely both put out and retract one of their many varieties of beer they produce; they currently have 39 different varieties of beer including their two most popular Sam Adams and Sam Adams Light.
bcg matrix
BCG Matrix

High

Market Growth Rate

*The bottle of Sam Adams represents

BBC within their small niche beer

market.

*The bottle of Sam Adams light

represents BBC within the entire US

beer market.

Low

Dogs

High

Relative Market Share

Low

key assets
Key Assets

*All numbers are in thousands

generic strategy
Generic Strategy

Competitive Advantage

Low Cost

Higher Cost

Broad

Competitive Scope

Narrow

grand strategy
Grand Strategy

Products

Existing

New

Existing

Markets

New

conclusion3
Conclusion
  • BBC has experienced enormous success over the years sticking to their business model.
  • They have made Sam Adams a brand synonymous with quality and great taste and a brand recognizable throughout the entire US.
  • However BBC has experienced about as much growth as they can have within the US and if they ever want to see substantial growth then they are going to have to find better ways to market abroad.