Question

Essentials of Strategic Management, 6e

Competition in the Craft Beer Industry in 2017 (Case Study)

What key factors may determine the success of a start-up or smaller craft brewery?

Select “True” for those statements that are accurate and choose “False” for those that are not.

F. A large initial investment in automated bottling capabilities is needed in order to expand capacity. Sufficient sales volume is needed to achieve scale economies in marketing expenditures.

A. Regarding access to and mitigation of distribution issues, small breweries are at a disadvantage with distributors.	True/False
B. Small breweries are at a disadvantage in forming partnerships with global producers to share distribution channels.	True/False
C. To maintain higher prices and differentiation among consumers, craft breweries need to foster the craft beer brand.	True/False
D. Consumers need to see the difference to be willing to pay higher prices.	True/False
E. The use of social media for marketing and exposure will not only cut marketing costs, but also foster the craft beer image.	True/False
F. A large initial investment in automated bottling capabilities is needed in order to expand capacity. Sufficient sales volume is needed to achieve scale economies in marketing expenditures.	True/False

Answer 1

1. Regarding access to and mitigation of distribution issues, small breweries are at a disadvantage with distributors. – Yes
2. Small breweries are at a disadvantage in forming partnerships with global producers to share distribution channels – Yes
3. To maintain higher prices and differentiation among consumers, craft breweries need to foster the craft beer brand. consumers need to see the difference to be willing to pay higher prices – No
4. Consumers need to see the difference to be willing to pay higher prices. – Yes
5. The user social media for marketing and exposure will not only cut marketing costs, but also fosters the craft beer image – Yes
6. S large initial investment in automated bottling capabilities is needed in order to expand capacity – No

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