Mountain Man Beer Company – Case Analysis
Case Assay Mountain Man Brewing Company: Bringing the Cast to Ablaze Mountain Man Brewing Aggregation (MMBC) was founded by Guntar Prangel in 1925. He reformulated an old ancestors cooler with affection ingredients, constant in a aged absinthian tasting beer which was launched as the Mountain Man Lager. The cast grew to affirmation a admirable bazaar allotment for an independent-family-owned-brewery, in accomplished of the East Axial United States by 1960. Alike today, afterwards 80 years, the lager is a bequest brew, awarded as the Best Beer in West Virginia for abounding years in a row.
MMBC is still a audible artefact aggregation and generates over $50 actor in acquirement and affairs over 520,000 barrels of Mountain Man Lager. All has been able-bodied appropriately far but now the bazaar trends are alteration rapidly. Problem Statement For the aboriginal time in the 80+ years MMBC has accomplished a 2 percent abatement in revenue, about to the above-mentioned budgetary year. Is this a ancient accident or a arresting about-face in the all-embracing marketplace? Businesses charge act in a assertive address in adjustment to aerate profits or run the accident of accident their abode in the marketplace.
Chris Prangel, son of the President and buyer of MMBC, Oscar Prangel, is to accede the business in abandoned bristles years. With differing administration styles and thoughts on the administration the alignment should take, this ambiguity could be potentially crippling over time. The catechism of whether or not MMBC should move advanced with Chris's plan to acquaint a ablaze beer artefact is the one that is best pertinent to the all-embracing administration the aggregation will take. The anytime alteration business ambiance with anniversary to demographic, socio-cultural, and political cenario will access management’s accommodation on which aisle to take. SWOT Analysis: Strengths Mountain Man Lager has accustomed a cast with a able loyal dejected –collar clientele. This aerial affection lager is accepted for its aphotic color, audible absinthian aftertaste and hardly college booze content. It boasts an abandoned acknowledgment amount of 67% from the developed citizenry of WV and is accepted to be the best bounded beer. In 2005, Mountain Man Lager won “Best Beer in West Virginia” for its eighth beeline year. It additionally won “Best Beer in Indiana” and was called as “America’s Championship Lager” at the American Beer Championship.
Research has apparent blue-collar males acquirement 60% of the beer they alcohol from off-premise locations. Currently MMBC sells 70% of its beer at off-premise locations which is quiet constant with the industry advanced sales. The lager is affordably priced for the middle-to-lower assets “working man”, at $2. 25 for a 12-ounce confined of abstract beer in a bar and affairs for $4. 99 for a six-pack in a bounded accessibility store. Bazaar assay shows, Mountain Man’s position as an independent, ancestors endemic brewery provides a faculty of “authenticity” with “anti-big-business” amount drinkers.
The cast is as apparent in the East Axial arena as Chevrolet and John Deere. MMBC has accurate to be acknowledged in grass-root business with a sales force which is accepted to not aloof advance the cast but access barter to embrace Mountain Man and advance the cast by chat of mouth. Weaknesses: MMBC is able-bodied accepted for their absinthian tasting product. This has accustomed them abundant success in the past, about with the alteration bazaar they charge to accommodate to the new way of accomplishing business if they ambition to abide to accomplish in the future.
Having abandoned one capital beer that is awash in the East Axial arena of the United States makes it adamantine to advance profits. MMBC has been experiencing a abatement in their sales by about 2%. MMBC has a actual baby demographic to which the lager appeals to. As such they are accident their access over the adolescent market, as able-bodied as the women drinkers. The affability of a absinthian tasting lager doesn’t absolutely win over the adolescent generation. Studies accept apparent they adopt a ablaze beer, article MMBC is because developing. MMBC needs to accede the amount associated with ablution the new line.
They would advertise the MMLight at the aforementioned amount as the approved beer; about it costs appreciably added to produce. Advertising would additionally add to the accountability of MMLight. Advertising abandoned would amount over $750K for a six ages attack to ability cast acquaintance of 60%. As they still would abandoned be able to advertise the new artefact at the aforementioned amount that their competitors are affairs theirs, the amount ability outweigh the rewards. Opportunities: Attractive evidently one can see that MMBC has abounding accessible avenues they could booty advantage of, in the alteration U.
S. demographic and cooler market. MMBC is accepted for their acceptable aerial affection lager with the abeyant to aggrandize into several fast growing markets such as ablaze beer and super-premium beer. By entering a growing bazaar MMBC could accretion drinkers from altered demographics which they currently lack, for instance women and those in their twenties new to drinking. By implementing these changes it could anniversary the bazaar allotment accident MMBC lager is currently facing. MMBC could restructure how they bazaar their beer, attractive at new avenues.
The internet is one possibility, capitalizing on the adolescent bearing and their anti-big-business-sentiment as a business tool. MMBC could try to access sales in ‘on-premise’ locations. MMBC should additionally attending to aggrandize their administration ambit to access added states in the U. S. absorption on their amount grass basis business strategies to abound their bazaar share. Threats: The "threats" allocation of a SWOT assay is best declared as an assay of alien ecology threats to the business itself.
The afterward is a altercation of the best pertinent abeyant alien influencers adverse MMBC. Over the accomplished four years per capita beer burning in the US has beneath by 2. 3% due in some allotment to antagonism from wine and spirit based drinks but additionally due to alteration cultural community auspicious balance and claimed responsibility. If this trend continues MMBC will be aggressive for an anytime shrinking allotment of the market. The abeyant bread-and-butter and business acknowledgment from the above brewery competitors is alarming to a aggregation the admeasurement of Mountain Man.
With economies of calibration in brewing, busline and marketing, the Budweisers of the apple are appalling rivals to say the least. They could acknowledge in such a way as to accomplish accomplishing business actual difficult affective forward. Governmental captivation in the beer industry is addition affair at hand. The Federal Government has already aloft the customs tax and with laws alteration how beer can be answer in a retail ambience anew anesthetized in WV could alternative states in the East Axial arena be too far behind? The better abeyant blackmail is the about-face in beer consumers aftertaste to ablaze beer and abroad from the exceptional beers overall.
Light beer sales anniversary for over 50% of all beer sales and are growing at a admixture amount of 4% per year. One of the best adverse aspects of the billow in ablaze beers acceptance is the demographic that is active it. Young, aboriginal time, beer buyers / drinkers are at the body of the demographic and marketers accept that if you can abduction a chump adolescent abundant you accept them as a chump for life. Financials: A attending at the bazaar assay appearance alarming trends. In 2005 MMBC’s acquirement was bottomward about to the above-mentioned budgetary year.
Changes in beer burning are actuality apprenticed by alteration chump segments. Ablaze beer sales are accretion while Exceptional beer sales are abbreviating in the east axial arena as apparent in Exhibit 5 in the MMBC case. Super-premium beer sales added the best by able-bodied over 9% in the accomplished 6 years. This shows beer drinkers’ tastes are alive decidedly causing sales to reflect this trend. Exhibit 5 shows ablaze beer has a abundant greater aggregate than exceptional beer; blame alike baby bazaar assimilation can beggarly cogent volumes.
Looking at Exhibit 6 allotment A, the alternative brands accept 14% of the ablaze beer bazaar assault out Coors advancing in at 11%. This could betoken that the ablaze beer bazaar is calmly penetrated by a new product. Exhibit 2 examines the beer drinker demographics in 2005, MMLager has 19% of the changeable demographic which is abandoned a baby portion, while calm ablaze beer boasts of 42% of the changeable beer bubbler demographic. MMLager is the adopted beer of abandoned 2% bodies in the 21-24 yr age bracket. In the 25-34 yr age group, 15% bodies adopt the lager and in 19% adopt the lager in the 35-44 yr age bracket.
These numbers are decidedly beneath than those bubbler calm ablaze beer and calm exceptional beer. MMLager is accident the adolescent bearing easily down. A ample articulation of the ablaze beer drinkers (24%) accomplish over $100 thousand dollars a year, so introducing a newer ablaze beer at a hardly college amount will hit a new assets demographic that is not as afraid about pricing. Recommendations: 1. Do annihilation – MMBC barter abject bubbler lager is a shrinking market. The amount at which MMBC can accomplish new barter can abandoned alter a atom of absolute ones.
Assuming the 2% anniversary sales decline, by 2010, sales would accept beneath by 10%, the accumulation allowance would be acutely shrunk, and with anchored costs actual the aforementioned the aggregation ability be out of business in a amount of years. Keeping in apperception the demographics, there is quiet a achievability that the amount of crumbling sales ability advance due to the crumbling chump base. The chief administration at MMBC is afraid to barrage the new artefact and armpit the examples of over 40 breweries those accept bankrupt down. But this does not, in anyway, accommodate any solid affirmation that MMBC will abatement in those aforementioned footsteps if they are to barrage the new line.
According to research, artefact band extensions “helped brewers access greater shelf amplitude of products” and “created greater artefact focus amid distributers and retailers”. Suggesting that MMBC do annihilation would be a actual astigmatic accommodation and archetypal aberration of “marketing myopia”. MMBC should do article anon in adjustment to accumulate up with the alteration market. 2. Ablution Mountain Man ablaze – The assay suggests that area the cast disinterestedness drives the sales of lager; the aforementioned action would not assignment for ablaze beer as the amalgamation of stronger, absinthian acidity is not activity to abduction the ablaze beer segment.
MMBC needs to ambit itself from the blue-collar beer angel in adjustment to allure the adolescent generation. 3. Ablution ablaze beer with a new name – Data suggests that ablaze beer should not be marketed to the absolute chump base, as they are artlessly loyal to the aboriginal lager. As such, they should still absorb the Mountain Man cast but name it article like “Mountain Light”. Having an amalgamation with the cast will acquiesce the aforementioned grass-root business action to be activated for business the ablaze beer to the adolescent segment. Exhibits [pic] [pic] [pic]
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