D.G. Yuengling & Son

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D.G. Yuengling & Son With beer sales dropping around the world, you should be ecstatic that sales of Yuenglingbeer are up 225 percent in the last six years. But as you walk through the caves and tunnels of Yuengling\u2019s Eagle Brewery, carved into Sharp Mountain in 1831 to maintain a perfect 50-degree temperature for storing beer, you see not only the history of America\u2019s oldest brewery everywhere you turn, but also chipped paint, rusting pipes, and an aging plant that can\u2019t keep up with the growing demand for Yuengling beer. So far, thanks to hard work, dedicated workers, and some luck, you\u2019ve doubled your production capacity from 250,000 to 500,000 barrels of beer a year, but if you push for more, the old brewery will break.

Yet with sales up so dramatically, the company faces a problem says CEO and owner Dick Yuengling, \u201cWe are sold out of beer. We run the risk of losing our customer base because we don\u2019t have any product on the shelves.\u201d Shortages are so bad that the advertising budget has been cut from $3 to $2 a barrel. Yuengling explains, \u201cYou can\u2019t fuel the fire when we can\u2019t get them beer anyway.\u201d

Ironically, with production stuck at 500,000 barrels a year, Yuengling beer has become harder to find as it has become more popular. Sales representative Diane Adams said, \u201cIt was a little hairy. People were up in arms.\u201d So, rather than sacrifice sales in its home market of Pennsylvania, where Yuengling has its largest market share (10 percent), the company has temporarily stopped shipping beer to distributors in Maine, Massachusetts, and Rhode Island. Since that strategy won\u2019t help Yuengling grow outside Pennsylvania, you still face the question, of how to permanently increase beer production to meet the growing demand. You\u2019ve identified five options. The first is to add new storage and finishing tanks to Eagle Brewery to increase production capacity by 10 percent to 550,000 barrels a...
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