Question

Anheuser-Busch InBev is considering you for an entry-level brand management position. You have been asked to prepare an analysis of the U.S. craft beer industry as part of the selection process. Please prepare a 3 page report that includes a description of the industry’s strategically relevant macro-environmental components, evaluates competition in the industry, assesses drivers of change and industry dynamics, and lists industry key success factors. The company’s management also asks that you propose the basic elements of a strategic action plan that will allow the company to improve its competitive position in the market for craft beer. You must provide a heading in your report for each of the required elements of the assignment.

Answer 1

Macro - Environmental Components

1. Economy: As economy , earnings of people, opportunities for wide range of money making led to more consumption of beer. Beer consumption is high in developed nations rather than developing nations. Even in USA, not all states are selling same amount of beer. In other words, not all states are consuming same amount of beer. Some states are consuming more and some or less

2. Geographical Location and Culture:  Increase in income would lead to adopting more different cultures. For some countries in EUROPE, Beer is their best drink of all time because its so indulged in their culture. On the other hand, most Arab countries consumes little or no beer.  Weather conditions and accessibility can influence the sales of business.

3. Availability of resources: It is easy for countries to produce start a brewery if natural ingredients needed for beer available. Also, if political and natural conditions supports such as Government permissions to setup an industry and interest among the public for beer can impact the beer production (in either way)

Competition in the Industry

According to a survey below are top 5 craft beer brewery brands/companies in USA

1. Blue Moon

2.Samuel Adams

3.Sierra Nevada

4. Lagunitas

5. New Belgium

Sales of the these brands stands in the range $44M to $120M in 2017.

Driver of Change

Government: Brewery companies should always watch for Government announcement on the industry. Governments usually take decision in the interest of its citizens. If there is any opposition towards a company or products from public Government intervenes to resolve the situation. Unfortunately the opposition is high for alcohol industry. Reasons for opposition from public have multiple reasons such as not properly doing the waste disposal, excessive usage of water, pollution due to industry/plant etc.

Apart from that, Governments may some time increase the legal age of drinking. Several countries differ on the legal age. It is 18 in some countries, 21 in some and 25 in other. If the Government starts taxing the companies more, then many small players may not be in a position to run the business which would become an opportunity for large companies to acquire and become market leaders which leads to Monopoly.

Key Success Factors

1.Great Quality and Great Taste

2. Affordable pricing

3. Easy availability

4. Good working staff/employees and management

5. Trustworthy channel partners

6. Hassle free production

Strategic Action Plan

I would first check for current market players (existing manufacturers) and analyze their products in terms of availability, sales, pricing, taste, brand value, supply chain etc. It helps me in assessing the product strengths and weaknesses as a whole. Based on the my analysis, I would propose a plan to management including changes and action items to act upon on Priority basis.

Example: A logo and its color can play a vital role in promoting the branding I believe the logo should represent the business. This "brand building" would definitely help in increasing the market share.

Competitive price not necessarily means less expensive. Selling a product at same price as of a market leader with good taste increases the sales.