Inside BevMo Drinks SWOT Analysis
Inside BevMo Drinks SWOT Analysis
In 2007, BevMo, a leading alcoholic beverage retail chain was acquired by private equity
firm Tower Brook Capital Partners. Some strengths of the company are its great pricing and excellent
distribution. A few weaknesses of BevMo are its brand recognition and its facility. The great
opportunities is the excellent climate and new items. Major threat is competition and the other is the
Beverages & More, Inc. retails alcoholic and non-alcoholic beverages in the United States. It offers wines, spirits, and beers; specialty foods and snacks, cigars, glassware, and related bar and wine accessories; beer gifts, and wine baskets and trios; and appliances, bar mixers, barware, beverages, candy, caviar, cool items, games, gift cards, gift-wrap, glassware, gourmet foods, sodas, paper/plastic, and serving and entertaining products. The company also operates BevMo.com, a Website that enables customers to purchase items for home or office. Beverages & More, Inc. was founded in 1994 and is based in Concord, California. It has stores in Northern and Southern California, and also Arizona. Beverages and More (BevMo) is California's largest wine, spirits, and beer store chain. They currently operate 115 stores. The stores boast over 3,100 wines, 1,600 spirits, and 1,000 Beers (BevMo.com).
The SWOT analysis covers strengths, weaknesses, opportunities, and threats. Strength and weaknesses are internal issues for companies; whereas, opportunities and threats are external forces that may affect the launch of this new product. SWOT provides us with a situation analysis to determine if developing wineables makes sense to the company.
Wineables will be an innovative product for BevMo because it will be something produced by the company itself versus retailing products provided by other companies. Pricing will not be an immediate issue for the company because no one else is currently offering this product. Delivering wineables to consumers is another strength since BevMo has over 100 store locations in California, a distribution system is already established which also allows the company to test market the new product in small area before going into large production.
One major weakness for the company is name brand recognition. Unlike Kraft Foods,
BevMo is not known for producing consumables. To overcome the name brand issue the
company should consider stocking the wineables with other name brand products. Another
weakness for the company is a production facility. The company's business model more closely
resembles a distribution company and consideration must be given to where the new product line
will be packaged.
California is known for temperate weather allowing people to enjoy outdoor activities year round. Whether spending time at the beach or mountains, Wineables will be products of convenience for those individuals not wanting to waste time assembling a lunch or dinner basket before heading out to the beach or mountains. Another opportunity for BevMo is being first to market with a new product. If the wineables concept catches on in popularity, the time needed for other companies to bring a similar product to market will give the company a chance to establish a foothold in the product line.
If the concept of wineables becomes popular, the biggest threat to the company will be competition. For example, once IBM started producing personal computers other companies jumped on the bandwagon after seeing the success the company was enjoying. The same will be true for wineables, once the product becomes popular, other companies with production abilities will try to steal a share of the market....