Boston Beer Company Strategic Analysis

Overview

At the request of Management, a strategic analysis* (SA) for the Boston Beer Company (BBC) has been prepared. BBC is a company that focuses on “Better Beer,” a market which amounts to 27 percent of the total United States (US) beer consumption by volume (Boston Beer Co., 2016). Table 1 provides the details of BBC’s barrels sold and the corresponding net revenues from 2013-15. In 2015, BBC sold 60+ beverages under the “Core Brand” of Samuel Adams® and Sam Adams®, while also vending 60+ beverages under other brands (e.g. Twisted Tea®, Angry Orchard®) and through its subsidiary, A&S Brewery Collaborative LLC (A&S) (Boston Beer Co., 2016). As shown in Table 2, between BBC and its subsidiary, BBC may lay claim to six breweries throughout

Further, the Compet-itive Advantage Test is passed as the stated strategy discusses its product variety and innovation, and the support of the Core Brand with many other offerings. Lastly, the Performance Test is passed based on BBC’s financial performance. BBC dominates the “Better Beer” market. Pre-sented in Tables 3 and 4, BBC held a higher market share in both the craft beer and hard cider segments of this market. In the craft beer segment, BBC owned 17.5 percent market share, based on dollar sales ($329.4 million/$1,882.4 million). The closest competitor, Sierra Nevada, may lay claim to only 10 percent ($190.1 million/$1,882.4 million). In the hard cider segment, BBC tallied 58 percent market share, based on cases shipped (16,351/28,170). The nearest com-petitor, MC, came in a distant second place, mustering only 7.1 percent (1,995/28,170). Ulti-mately, BBC’s stated strategy may be qualified as a mostly winning strategy, but some improve-ment may be needed. Strategies that fall short a single test are less

Currently, BBC’s objectives include a national price increase between 1 and 2 percent; an increase advertis-ing, promotional and selling expenses; and to increase its investment in its brands commensurate with the opportunities for growth that it sees (Boston Beer Co., 2016). These objectives are clearly supported by BBC’s mission, which seeks profitable growth. Moreover, the vision is sup-portive, as BBC plans to continue creating high-quality and innovative products, while still fo-cusing on existing, successful brands complimented by a robust portfolio of alternative brands. Lastly, BBC’s core values are the commitment “to careful financial management and to offering the highest quality products. We abided by Jim’s “String Theory”, which says that teamwork and creativity outperform abundant resources. We hire great people; we brew great beers, we provide first class training, and we strive to win” (Boston Beer Co., 2016). Again, this statement is supportive to BBC’s objectives for the