Boston Beer Company Essay Example for Free

capital of Massachusetts Beer Company shew1.Evaluate the attractiveness of the craft beer segment relative to the market space occupied by the traditional king- sized Three. (tip use the Five Forces framework). a.High Threat of new-made competition over 600 of specialty beer companies were founded over the past quintuplet years, approximately 40% emergence each years. In addition, the existence of contract brewing companies lead to menial entry cost. b.High substitution The attractiveness of craft brewing industry be majorly based on extraordinary styles and flavors of beer. there are many different brands and styles of beer so the actual threat of substitutes is high. c.The intensity of competitive arguing is also high magic spell there is a major growth of new entry, the market size shows little growth. This creates tremendous competitive pressures among the industry. d.Bargaining power of buyers Switching cost for buyers are low, as there are many different substitu tion and options. companies has to consistently maintain high role in order to remain customers.e.Bargaining power of suppliers switching cost for suppliers are high for the traditional Big Three, as their supplies are even to their own brewies. Craft brewing companies has the option of switch breweries in a relatively low cost, as the suppliers know they have options to supply other breweries. This allows them to charge higher prices than the big three. 2.Evaluate Boston Beers business warning relative to Redhook and Petes, comparing their business models with respect to specific activities such as procurement, brewing, distribution, and marketing. BBCs strategy of producing the highest quality of products, the company pursued four initiatives high quality standards, contract brewing, intensive sales and marketing, and product berth innovations.Unlike BBC and Petes, redhook relies on its own breweries. Redhook also established a strategic alliance with Anheuser-Busch whereby R edhook products were sold by means of the nation-wide ne twainrk of 700 distributorships in exchange for a 25% equity stake in the company. Similar to BBC, Petes operates on a contract brewing basis and stress heavily on marketing. In retrospect, BBC mean to remain a contract brewer exclusively, capitalizing on lower overhead and transportation costs while continuing to invest heavily in its branded products.Redhook believed that its commodious-term growth and profitability were best served by assembling the largest company-owned production capacity of any domestic craft brewer, guaranteeing production capacity in to a greater extent than one geographic region of the United States. Redhook also made a substantial investment in distribution, gaining access to Anheuser Buschs nation-wide network of resellers. Petes, on the other hand, appeared to be following a combination of these two strategies by producing its products at both company-owned and third-party breweries.3.How realis tic analysts long-term growth forecasts (25% to 40% for the craft-brewing segment)? Based on the door guard five forces analysis, the craft brewing segment has many advantages over the traditional big three, which explains the 40% growth rate. However the large number of new entries companies has already created a tremendous amount of competitions among its own, which retard the long term growth in my opinion and makes the forecasts of 25% to 40% seem unrealistic. 4.What do you recommend to Boston Beer?a.While the US market size remains somewhat stable. By exporting globally, will introduce BBC to new markets and additional sales b.Forming strategic alliance will help combat the increasing competition among industries.