Boston Beer Company SWOT Analysis

Topics: Beer, Marketing, Market research Pages: 7 (2841 words) Published: January 28, 2014

The Boston Beer Company is currently the largest craft beer company in the United States, however, the craft beer industry is growing in an otherwise shrinking market increasing the amount of serious competition that The Boston Beer Company is facing. In order to stay on top of the industry, The Boston Beer Company needs to find new, innovative ways of being the most appealing craft beer available to the average consumer. While The Boston Beer Company offers many different varieties of seasonal beer, they should begin to shift their focus to year-round specialty beers, such as a line of regional flavors based on their consumer’s regional taste preferences. Different regions across the United States have different taste preferences. American’s taste preferences are learned and tend to be centered on the type of food and flavors they consumed when they were growing up. Depending on the region that one grew up in, what culture influenced the local cuisine, and what spices were readily available to cook with, consumers will tend to have varying tastes and flavor combinations. Consumers in the New Orleans area might prefer a beer with more of a Cajun-spice undertone while consumers in the Southwest United States might prefer a beer with more of a jalapeno or habanero spice undertone. Companies ranging from manufactures of potato chips to BBQ sauce market specific flavors to particular regions across the United States. If the flavor does especially well, then it is slowly released in other regions across the country.

There are many different craft beer companies that provide regional flavors across the United States. These craft brewers tend to be much smaller in size than the Boston Beer Company therefore limiting the scope of their reach. The Boston Beer Company already has developed a presence across the United States, allowing the brewer to reach many more customers than their competitors. However, the Boston Beer Company has a variety of flavors that are available in all markets. By segmenting the market into different regions and focusing on regional preferences, they will be better equipped to compete with the smaller, regional competitors.

By focusing on popular regional flavors, the Boston Beer Company will be able to increase their market share across the United States and compete with the smaller, local craft beer brewers on a more personalized level. Currently Sam Adams has a 19% share of the overall craft beer market but only a 1% share of the overall beer market. By increasing the overall market share, hopefully the Boston Beer Company will be able to increase their stake in the craft beer company by 6%, bringing their overall share to 25% and increase their presence in the overall beer market by 4%, bringing their share to 5%. As their market shares increase it is reasonable to presume that revenues will also rise. Over the last couple of years Boston Beer Company averaged an increase in revenues of 12% per year. If market share increases, then sales should hopefully increase by 8% bringing their annual revenue increase to 20% from the previous year. The first step to achieving these goals is to conduct a market study in each designated region (Far West, South East, Rocky Mountains, Plains, Great Lakes, South East, Mid-East and New England) focusing on the target demographic, 21-30 year olds with a disposable income, to determine which large cities would be more likely to support a nano-brewery, a very small brewery that brews several hundred 10 gallon batches of beer for sampling purposes, almost like a test kitchen, and be a viable test market. An outside, nationwide consultant firm should be hired to begin the regional studies. Market studies should focus on current local craft beers, number of local bars, and current market for new craft beers. Studies should begin at the beginning of the fiscal year and should be completed no later than the end of the second quarter. Each regional study should not...
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