State Beer Industry

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Jason Miranda February 14, 2012 The United State Beer Industry

1) The United States brewing companies has become more concentrated over the last two decades due to declining beer consumption from direct substitutes such as wine or spirits, also increased advertising has proven a disadvantage for smaller breweries, and also technology of canning and distributing of beer has increased advertising expenditures and most smaller breweries cannot manage to reap economies of scale.

2)
A) Risk of entry for the US beer industry includes factors like high entry costs, high advertising costs, brand loyalty, established companies having an absolute cost advantage, and the switching costs of customers.

B) Intensity of rivalry between larger companies like Anhesuser-Busch, SAB-Miller, and Molson Coors makes it hard for upcoming breweries to compete on the same level. Also shrinking industry demand at this time can cause failure for new companies looking to get into the industry.’

C) the bargaining power of buyers in the U.S. beer industry could be a threat as it will lower prices and raise costs

D) The bargaining power of suppliers could raise costs causing lower profits for those in the industry

E) Close substitutes such as wine and spirits.

3) Implications of evolving competitive structure for profitability and strategy for a smaller mass market firm means that the smaller firms will have to become more competitive in price or follow the most dominant firms in the industry.

4) Yes there are different strategic groups in the industry some of these include marketing, research and development (technology), manufacturing and supply chain. I’m sure the nature of competition varies slightly between groups but they all want the same thing in the end to beat out their competitors
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