Brewing Industry SWOT analysis

SWOT Analysis Strength 

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Quality Uniqueness- flavorful and fresher tasting because craf t brewery is distinguished from standard industrial beers by their flavor and brewing styles High profit margin Exclusive image

Weakness  New company, it is a new startup so it does not not have a link with distributors or suppliers. It may be difficult to convince and afford Higher price than mass-production beer Its beer is not nationally distributed. Craft beer targets only only local area. Quality of beers depends depends on the freshness. It cannot keep for for long time. Opportunity Consumer demand in craft beer increased. increased. Demand shifts from mass production beer consumption to craft beer consumption. It is called “Test revolution”. Because they want full-flavored full-flavored beers. Sales volume increased Only one competitor (Northampton Brewery) with the different target market. Beer industry- high growth, low failure. Low market concentration Barriers to entry. Because product is an experience, rather than a search good. It is difficult to be taken over by industrial industrial breweries because they cannot focus on small scale of production, inability to duplicate the craft brewed flavor. Threat Type of business- capital needed for start up is not substantial, beermaking know know how is widely dispersed so entering by other microbreweries or large microbreweries or imitators in the same area is easy Company may be taken over by mass-production beer manufacturers (they have high potential). It creates an existence of mainstream microbrand High substitution rates, it competes with all kind of beverages. Direct competitors are imports. imports. Indirect competitors are alcoholic drinks such as wines and non-alcoholic drinks such as juices, drinking water. 

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Table 1

Strengths

Opportunities

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Strong brand image

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Increased presence on the internet

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Compete in volume compared to Coors

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Emerging markets in Europe

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Lite Beer taste

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Emerging markets in Central Asia

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Draft taste in cans and bottles

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Emerging market in U.S. with ethnic

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International presence

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Cooperate with governmental rules and

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Ability to purchase smaller breweries

regulations

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Foreign investment

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Environmentally conscious

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Increased advertising budget

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Strong marketing efforts for Lite Beer.

groups

Weaknesses 

Threats

Weak brand identity over time – lack of

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Government taxation increases

advertising focus and consistency

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Government rules and regulations added

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Not seen as high quality

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Lack of dark beer line

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Growth by closest competitors

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Taste known as inferior to Budweiser

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Lower priced imports and local

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Seen as a mass producer

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Preservatives make it seem inferior

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Not associated with famous people

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Products not significantly differentiated

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Changing consumer preferences

from major competitors

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Price wars from competitors

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Small advertising budget compared to Anheuser-Busch

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Loss of brand loyalty with Miller HighLife label

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Undifferentiated products, as compared to close competitors

products 

Increase in competition from other beverages (e.g. water, fruit juices, etc)

Table 2

Strengths.

Weaknesses.

Company Resources is a distinctive strength Diversification is a distinctive strength International Product Line seems not to be a distinctive strength. Name Recognition is a distinctive strength.

Weak Brand Recognition in Emerging Markets is a symptomatic weakness. Strong Competition is a structural weakness.

A distinctive strength can be interpreted as a core competency i.e. something that makes the organization competitive. Often a very successful organization may have only one such strength, but it is significantly exploited and yields success. A few distinctive strengths are quite acceptable.

A structural weakness is evident. These are areas in which the organization lacks a distinctive competency. This type of weakness should raise the alarm in the organization. It points to a lack of distinctive competency. These weaknesses are serious, because the core on which survival depends is lacking. This weakness alerts management to do something about acquiring skills or developing the organizational capacity in this area. Often competition will have the distinctive competency and are thereby a serious threat to survival. Structural weaknesses often indicate the direction in which the Business Idea for the future (the strategic vision) needs to be developed. This indicates areas of desirable development, in order to be competitive. You have symptomatic weaknesses and should therefore look for its underlying cause and remedy the situation before this cause becomes serious.

Opportunities.

Threats.

Emerging Markets is a current opportunity. Increased presence on the internet is a current opportunity. Focus on ethnic target markets is a current opportunity. Increased advertising is a current opportunity.

Increased Advertising from Competitors is an immediate threat. Governmental Regulations is an immediate threat. Governmental Taxation is an immediate threat. Changing Consumer Trends is an immediate threat. Lower Priced Imports is an immediate threat.

Current opportunities are evident. These are opportunities that the organization could seize without too much trouble and should consider moving in this direction. This is often a case of not being able to see the wood for the trees where one becomes blind to very available options, mainly because of habitual activities in familiar territory.

Short term (immediate) threats are indicated. These are typically within the next 12 months. If these have been identified it demands that management deal with the implications. Sometimes the only way to deal with these types of threats is by a significant strategic response. If this threat cuts to the core of the business activity it could well be evidenced as a structural weakness. Only by dealing with the fundamentals of the business process can the situation be remedied. The best advice is a constraint monitoring of the horizon for any smoke signals. A unfortunate implication of a short term threat is that it forces an organization into an almost crisis response, this by implication can result in reactive management. Too much of this kind of management reaction can habituate into crisis management. The admonition here is that management should rather engage in excellent planning to foresee threats well ahead of time. T hreats are often from the external environment and are often ignored by the preoccupations with operational matters.