COMPETITION IN THE CRAFT BREWING INDUSTRY IN

2017  
Wael alarfaj – 201701067
Ibrahim alwehaibi – 201802007
Abdullah Alhajri – 201700743
Mohammed Alsadah – 201502894
Abdulmohsen Alajmi – 201800788
Outline:

■ Introduction
■ Issues analysis
■ Model Application
■ Porter Generic Strategy
■ Intensive growth strategy
■ Market penetration strategy
■ Product development strategy
■ Implementation
■ Best practices
■ Conclusion
Introduction:
■ During the early 2010s with the gains of the small, regional newcomers coming at the
expense of such well-known brands as Budweiser, Miller, Coors, and Bud Light.

■ There has been a dramatic increase in the production of craft beer in the United States
from 11.5 million barrels annually to around 24.6 million barrels annually throughout
this period. A whopping 90% of craft brewer growth in 2016.
Issues analysis:

■ The great majority of craft breweries may only be able to meet the needs of their own
neighborhood.

■ Microbreweries and nanobreweries are typically found in industrial areas because of their
entrepreneurial beginnings.

■ To help a new company get noticed, there were craft beer-specific mobile phone apps.
Exposure could also be gained by attending craft beer events, where breweries from all
around the country.
Model Application:

■ To deal with the competition, the corporation has implemented a mix of cost leadership,
differentiation, and focus initiatives. With the use of three generic strategy streams,
client base expansion and sales growth targets can be achieved (cost, differentiation and
focus). Craft beer brewers have pursued aggressive growth tactics.
Porter Generic Strategy:
■ Michael Porter introduced Porter, the generic strategy
framework, in 1980. When it comes to creating a
competitive advantage for your business, the model shows
you how to do just that. Cost leadership, differentiation,
and focus are the three key methods outlined in the
framework.

■ Craft Beer Industry Company is a multi-national

corporation well-known in specific market niches, such as
the beer industry.
Intensive growth strategy:

■ In order to achieve corporate growth goals, intensive growth strategies focus on the
creation of new goods or markets.

■ Craft Beer Industry’s aggressive growth methods are built on a trifecta of general
strategy pillars: cost, distinctiveness, and focus.

■ The level of competition, the features of the target market, and the specific growth
objectives of the business.
Market penetration strategy:
■ With this strategy, Craft Beer Industry has to cut the
costs and employ different promotional techniques in
order to increase sales in their current client base.

■ It is the strategic goal of Forked River Brewing

Company’s Craft Beer Entrepreneurship in an Evolving
Industry to boost sales by cutting prices through cost
leadership.

■ The cost of market penetration rises as a market hits its

saturation threshold, therefore this is something to keep
in mind.
Product development strategy:
■ There is now an overabundance of Craft Beer Industry products, despite the fact that
it was only introduced in 2013.

■ Increasing R&D spending in new product development and innovation is a key

strategic goal of implementing this aggressive growth strategy.

■ . Craft Bree Industry must priorities research and development and make use of new
technologies in order to pursue this strategy successfully while creating new
products.
Implementation:
■ One option for the consumer is to seek out a certain beer or brewery by name or to buy a lower-priced,
globally recognized brand.

■ With the variety of kinds and varieties of beer, breweries can compete on a strategy spectrum that ranges
from low prices to huge volumes.

■ Smaller brewers may compete with larger brewers by using marketing and distribution to their advantage.

■ A microbrewery’s ability to position itself in these categories was also demonstrated by the power of
marketing.
Best practices:
■ Almost all beers are brewed from barley, a cereal grain. Barley must first be malted and
ground before fermentation can begin.

■ Once the barley has been milled, it is either mashed or dissolved in hot water. Sugar is
produced from the grain when hot water is added.

■ More than 70 distinct varieties of beer are available in 15 distinct categories. Styles are
influenced by a variety of factors.
Conclusion:

■ As a result, consumers may only find locally brewed beer in a small number of bars and
restaurants. Breweries operating in states that do not allow self-distribution or on-
premise sales face a significant challenge in gaining access to customers and gaining a
foothold in the market.