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Mountain Man Brewing Company Case Analysis

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Mountain Man Brewing Company Case Analysis
Katia Herrera
Dr. Barksdale
MK4900
June 23, 2014

Mountain Man Brewing Company Case Analysis

Situation Analysis

1. Industry

“The beer industry in the United States generates $75 Billion in annual sales.” (Abelli, 4)

Light beer sales have increased at a compound annual rate of 4% over the previous six years. Traditional premium beer sales have also declined annually by the same percentage.

The beer industry can be considered a monopoly since large national brewers maintain economies of scale in brewing, better distribution tactics, spend heavily on advertisement, and create barriers of entry for other smaller brands.

Brand plays a key role in the beer-purchasing process, along with taste, price, special occasion, brand image, authenticity, and tradition.

Four different categories in the U.S. beer market-major domestic producers, second-tier domestic producers, import beer companies, and the craft beer industry.

2. Company

According to the case, “By 2005 Mountain Man was generating revenues just over $50 million and selling over 520,000 barrels of Mountain Man Lager.”

Mountain Man Brewing Company creates an aura of authenticity with its status of an independent, family-owned brewery.

Mountain Man’s revenue declined in 2005 by 2%. Assuming 2% drop in revenues every year, I have calculated the following: By 2006 revenues will drop to $49,431,200; 2007-$48,442,576; 2008-$47,473,724; 2009-$46,524,250. (See Appendix)

The main competition in Mountain Man’s region is the major domestic producers, Anheuser Busch, Miller Brewing Company, and Adolf Coors Company, which control 74% of beer shipments in the East Central region.

Anheuser-Busch, Miller, and Coors also accounts for 84% of market share in light beer in 2005.

Mountain Man is part of the craft beer industry, but it has a higher craft beer volume than most of the other four markets (brewpubs, microbreweries, contract breweries, and regional craft breweries). Craft

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