Boston Beer Case Study Analysis
Boston Beer Company
Case Study Analysis
1. Boston Beer’s strategy is primarily focused on growth through differentiation. The sources of its competitive advantage can be classified as a company that provides high quality beer with unique flavors, a market driven approach, and a very efficient contract brewing strategy. In terms of quality, the company created a premium beer by its selective use of ingredients and less water. Boston Beer has won honors such as being the first American beer sold in Germany due to its use of only barley, yeast, hops, and water as its ingredients. With the increase in health consciousness among beer drinkers and the rise in more distinctive and flavorful brews, the Boston Beer Company has been able to use its packaging and commercials to communicate its quality commitment to consumers. It is its image for quality among consumers that allows the company to keep high prices and profits when compared to major brewers such as Coors, Budweiser and Miller. Contract brewing has allowed the company to use extra brewing space among other firms to brew beer. The Boston Beer Company has benefited from such practice in that no capital was required to purchase facilities and equipment during a period in which it was growing at a double digit rate. Additionally, these breweries were distributed throughout the Unites States thus allowing the company to maximize freshness of the beer it sold. Such outsourcing approach has resulted in a higher focus on selling the product and low transportation costs. Sustainability will depend on the company’s ability to differentiate itself from major American brewers. It will be critical for the Boston Beer Company to continue focusing on its commitment to quality as it continues its path for growth by investing excess capital in research and development as well as bolstering its image as a company that brews premium beer with unique flavors. In terms of valuation, the company is profitable and
Case Study Analysis
1. Boston Beer’s strategy is primarily focused on growth through differentiation. The sources of its competitive advantage can be classified as a company that provides high quality beer with unique flavors, a market driven approach, and a very efficient contract brewing strategy. In terms of quality, the company created a premium beer by its selective use of ingredients and less water. Boston Beer has won honors such as being the first American beer sold in Germany due to its use of only barley, yeast, hops, and water as its ingredients. With the increase in health consciousness among beer drinkers and the rise in more distinctive and flavorful brews, the Boston Beer Company has been able to use its packaging and commercials to communicate its quality commitment to consumers. It is its image for quality among consumers that allows the company to keep high prices and profits when compared to major brewers such as Coors, Budweiser and Miller. Contract brewing has allowed the company to use extra brewing space among other firms to brew beer. The Boston Beer Company has benefited from such practice in that no capital was required to purchase facilities and equipment during a period in which it was growing at a double digit rate. Additionally, these breweries were distributed throughout the Unites States thus allowing the company to maximize freshness of the beer it sold. Such outsourcing approach has resulted in a higher focus on selling the product and low transportation costs. Sustainability will depend on the company’s ability to differentiate itself from major American brewers. It will be critical for the Boston Beer Company to continue focusing on its commitment to quality as it continues its path for growth by investing excess capital in research and development as well as bolstering its image as a company that brews premium beer with unique flavors. In terms of valuation, the company is profitable and