Forked River Brewing Company Case Study Due: October 25, 2016 Kiana Lewis 083092 !"D# 100$02 "%i% #e&on
Executive Summary
'(is case study re)ort re)ort ana*y%es t(e +ored +ored -i.er -i.er !rewin/ !rewin/ Co&)any estab*is( in London, Ontario in 2012, counded by t(ree residents residents na&ed Da.e -eed, "ndrew eters, eters, and Ste.e a%arian4 n t(is re)ort t(e co&)anys bac/round, /oa*s, ob7ecti.es, and ey )rob*e&s )rob*e&s wi** be identied4 "*on/ wit( a &aretin/, co&)etition, custo&erse/&entation, custo&erse/&entation, and SO' ana*ysis4 e;t a *ist o so*utions wit( )ro and cons, reco&&endations, an action )*an and *on/ ter& considerations wi** be addressed4
Problem Statement
'(e coounders o +ored +ored -i.er !rewery !rewery are are (a))y wit( t(e success wit( wit( t(eir co&)any, but are acin/ c(a**en/es wit( c(an/es to Ontarios retai* *i
Company’s Obectives and !oals
Ob7ecti.es and /oa*s or +ored +ored -i.er !rewery is to create a new strate/ic )*an to ad7ust to c(an/es in t(e brewery industry suc( as &ana/in/ t(e /rowt( o t(eir business so t(at t(ey dont /et ta;ed as (ard co&)ared to ot(er /iant co&&ercia* co&)anies due to )roduction .o*u&es accordin/ to t(e si%e o t(e brewery4 it( t(e e&er/ence o new breweries, +ored -i.er !rewery !rewery s(ou*d ocus on new ty)es o beers, )aca/in/, and nonbeer a*ternati.es to stand out ro& t(eir co&)etition4
Company’s Background and Forecasts
+ored +ored -i.er !rewery is a se*nanced se*nanced co&)any t(at was incor)orated in 2012 in London, Ontario wit( t(ree ounders4 '(e brewery was bui*t in a co&&ercia* industria* area away ro& retai* and restaurant area to ee) o.er(ead costs *ow4 Da.e -eed one o t(e owners w(o in.ested 80 )ercent o t(e ca)ita* and owns &a7ority o t(e s(ares, is an e;)erienced e;)erienced en/ineer w(o bui*t and desi/ned &ost o t(e brewery4 brewery4 n t(e be/innin/ o t(e startu) t(ere was de*ay in (irin/ u** ti&e e&)*oyees to (e*) ee) costs *ow4 *ow4 !y =anuary =a nuary 2016, +ored +ored -i.er (ad 10 e&)*oyees inc*udin/ t(e ounders >8 u**ti&e, 2
)artti&e?4 +ored +ored -i.er !rewery (as a tota* o t(irteen di@erent re/u*ar re/u*ar and seasona* brews in t(eir )orto*io4
'(e ori/ina* business )*an orecasted orecasted sa*es to be A16B,000 A16B,000 in t(e rst year year wit( A1B,000 co&in/ ro& sa*es ro& /enera* /enera* restaurants and )ub, and A20,000 ro& ro& )ubs and restaurants t(at su))ort and )ro&ote crated beers4 '(e )*an a*so )ro7ected )ro7ected A11,000 in sa*es sa*es o (a* barre* e/s e/s >A220 eac(? and A33,000 in sa*es o A120 eac(?4 ro7ected /ross &ar/ins or eac( (a* barre* and A3 eac(? sa*es were )ro7ected to be A6,000 in t(e rst year and /ross &ar/ins o 55 )er bott*e4
"arket #nalysis $PES%&
Political'(egal
E C(an/es to Ontarios retai* *i
Ecomonic E 'a;es are based accordin/ to si%e o t(e brewery
E !rewers wit( annua* )roduction *ess t(an 50,000 (eto*itres beneted ro& reduced )ro.incia* beerta; beerta; rate and a s)ecia* )ro.incia* ta; credit
E !rewer a**ow to se** direct*y direct*y to t(eir custo&ers co&)ared to retai*4 -etai* (as to /o t(rou/( LC!O and t(e !eer Store
E OC! &e&bers (a.e to )roduce *ess t(an 00,000 (ecto*itres annua**y to be dec*ared at inde)endent
E Ontarioss breweries are in an or/ani%ed industry association ca**ed OC! >Ontario Crat !rewers? ounded in 2003
E +or +ored ed -i.er (as a concern or t(eir increasin/ /rowt( in )roduction .o*u&es4 '(eir ta; rate is 10t( o w(at co&&ercia* co&)anies &ae
Sociacultural E +ounders &ade it a )ride and )riority to /arantee consistent*y (i/(
%ec)nological E Da.e -eed desi/ned and bui*t t(e brewery and its e
"arket #nalysis $* Forces&
'(reat o 3ew 3ew Intry E increasin/ nu&bers o crat brewers enterin/ into t(e industry e.ery year
!uyer 2ower Co&)etiti.e -i.a*ry E 11 s&a** crat breweries in Ontario as )otentia* co&)etition
Su))*er 2ower E Source Source t(ei t(eirr /oods /oods ro& *oca* in/redients E source
E Loca* *ondon )ubs and restaurant E 2ersona* de*i.ery to )ubs and restaurant E Se* Se**s *s beers beers to *ar/er *ar/er co&)anies E I;)anded into t(e J'" 'oronto
Co&)etiti .e -i.a*ry
'(reat o Subsitution E "s new new s&a** s&a** brewe brewers rs enter t(e indusrty &ore s)ecia*ity Ga.ours co&)ete a/ainst w(at +ored -i.er a*ready (as
Competition Competition #nalysis
'(ere are are se.era* crat crat breweries breweries in Ontario as )otentia* co&)etitors co&)etitors or +ored +ored -i.er, t(is *ist inc*udes s&a** and *ar/e co&)anies4 Co&)anies inc*ude #i** Street !rewery, !eaus a** atura* !rewin/, -ai*way City !rewin/ Co4, "&sterda& !rewin/, !*ac Oa !rewin/, 'obo//an !rewin/ Co4, and "nderson Crat "*es4
Company S+O% $Strengt)s, +eaknesses, Opportunities, %)reats&
Strengt)s E Has a stron/ re*ations(i) wit( *oca* London restaurants E Se*08nanced E !ui*t by by itDs own own owner owner
Opportunities E Can e;)and retai* retai* stores stores in centra* centra* *ocations
+eaknesses E 3ot a bi/ co&&erica* co&&erica* co&)any E Has a retai retai** store store connected to actory, but *ocation is not in a )*ace wit( re
%)reats E '(e increasin/ increasin/ /rowt( /rowt( o crat crat brewers enterin/ into t(e industry E '(e se*ection se*ection o o Ga.ours t(at new co&)anies carry E C(na/es in in retai* retai* *i
Case -ey Points'.ncertainties Points'.ncertainties
'(e case ey )oints )oints o t(e case study is t(at +ored +ored !rewery !rewery is se*nanced, se*nanced, t(e business )*an or t(e co&)any needs to be renewed due to c(an/es in Ontarios retai* *i
increasin/ /rowt( /rowt( and t(e increasin/ a&ount o new entrants enterin/ into t(e industry in dustry44
#lternative Solutions Solutions $Pros and Cons o/ eac) alternative solution& solution&
So*ution 1
I;)and t(e co&)any and dea* wit( t(e ta;es t(at co&e wit( it4 '(e )ro o t(is so*ution is t(at t(e co&)any /ets to /row, but t(e con o t(is o)tion is t(at ta;es on breweries de)end on (ow bi/ t(e co&)any is and (ow &any (ecto&eters o )roduct is )roduced4
So*ution 2
"not(er a*ternati.e so*ution is to 7ust se** t(e co&)any is instead o dea*in/ wit( t(e current )rob*e&s4 )rob*e&s4 '(e )ro to t(is o)tion &eans t(at t(e coounders wont (a.e to co&e u) wit( a new business )*an and doesnt d oesnt (a.e to dea* wit( worryin/ about /ettin/ a *ar/er ta; )ercenta/e w(i*e t(e business /rows4 '(e con to t(is so*ution is t(at t(e owner *ose t(eir business7ob t(at t(ey created, desi/ned, and se* s e*unded4 unded4
So*ution 3
"n a*ternati.e so*ution is to co&e u) wit( a new business )*an t(at ts and ad7ust to t(e c(an/es wit(in t(e industry4 industry4 '(e )ro to t(is so*ution is t(at t(e co&)any wi** e.entua**y nd a way to ad7ust to t(e c(an/es in t(eir industry4 industry4 '(e con to t(is so*ution &eans ti&e wi** be taen taen away ro& worin/ worin/ at t(e actory to write and co&e u) wit( a new business strate/y4
Recommendation Recommendation $use a decision criteria'matrix& criteria'matrix&
Cost
Complexity
%ime
%otal
Solution 0
1
1
2
3
Solution 1
4
2
2
05
Solution 2
1
0
0
4
0 means t)e +orst, 4 means t)e Best
0 6 no, 6 yes
'(ereore, '(ereore, so*ution 2 wou*d be t(e easiest way way to dea* wit( t(e )rob*e&s )rob*e&s wit(in t(e co&)any4
(ong7term Considerations
So&e *on/ ter& considerations or +ored +ored -i.er !rewery wou*d be t(at t(e &ore t(eir business /rows t(e &ore t(ey t(ey ta;ed, t(ereore i owners want to contro* /ettin/ ta; t(ey eit(er need to s*ow down )roduction to *ower sa*es or in.est *ess into t(eir &aretin/ )*an to a*so (e*) decrease sa*es to a.oid a *ar/er ta; cuts4 t(e co&)any considers t(is *on/ ter& consideration t(en t(ere wi** be a )ossib*e ris o t(e co&)any *osin/ a *ot &ore t(an 7ust a.oidin/ risin/ ta;es, t(ere can be a )ossib*e c(ance o t(e business to sto) doin/ we**, or e.en /o banru)t4
