Strategic Analysis of Forked River Brewing Co. - MGMT3006 Case 1

This case study analyzes the strategic direction of Forked River Brewing Co. in the craft beer industry of Ontario. It includes a PEST analysis and Porter's 5-Forces analysis of the industry, along with a SWOT analysis of the company. Based on the analysis, recommendations are provided for the company's growth.

MGMT3006 1702
Case 1
MGMT3006 Strategic Analysis
Case 1 Forked River Brewing Co.
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MGMT3006 1702
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Background: Who, When, What
1.1 Who is the central stakeholder in the case?
The central stake holder in this case are the three founders of the company, Dave Reed, Andrew Peters and Steve Nazarain who had
been founded the craft beer brewery in the year 2011. The founding members of the organisation opine that the major part of the
earnings of the brewery should be invested in the betterment of the organisation itself thereby allowing the directors to spend a
modest and humble life style.
1.2 When is the case taking place and are there any considerations of
note because of when it is taking place?
The timeline that has been highlighted in the case study as the time of occurrence of the condition for the case study is the early
days of the year 2016. There had been a change in the laws that pertain to the retail sale of liquor in the state of Ontario wherein the
brewery had been headquartered. Thus, it had led to the complications in the business environment of the brewery.
1.3 What is the key problem or opportunity that is being considered in the
case?
The key issue that the founders of the organisation had been facing was the fact as to whether a new strategic plan was needed for
ensuring the long-term success of the brewery in a rapidly changing industrial environment of craft beers.
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1. Analysis
2.1 Conduct a PEST analysis of Forked River’s industry in Ontario at the
time of this case.
Briefly name & describe the
industry:
 The industry that is discussed in the given case study is the craft beer industry that has been
functional in London, Ontario. The craft beer industry has been one of the most rapidly developing
industries that have been functional in the state.
Source Driver
Political  The laws pertaining to the retail sales of liquor in the state of Ontario had undergone huge changes
 There has been a huge amount of taxes that need to be paid by the company due to the increase in the growth of the
company
Economic  The company has been facing a growth in the fields pertaining to the various fields of the production of the craft beer
and the retail sales of the same.
 The founding members of the company had decided on the fact that they would not be relying on the funds that they
had to procure from the external sources like the various financial institutions that had been functional in the city.
 The funds that are invested in the business are procured from the profits that are earned from the sale of the craft beers.
Social  The company had targeted the various restaurants and pubs that had been operating in the city of London in order to
acquire the client base that visit the pubs and the restaurants with an eagerness to try out the various craft beers that
are available.
Technological  The manufacture of the draft beer had proved to be helpful in the reduction of the various complications that were
associated with the bottling and the storing of the beer that was produced.
2.2 Conduct a Porter’s 5-Forces analysis.
Force Assessment
(H,M,L)
Rationale
(Justify your assessment with facts from the case)
Threat of Entry L  The significant amount of cash that needs to be invested upfront.
 The need for a high capital that is ongoing
 The scarce opportunities of distribution
 The difficulty that might be faced in order to obtain the economies of scale.
Industry Rivalry H  There has been a number of companies that have been operating in the craft beer industry.
 The major rivals of the company are the larger breweries like Anheuser Busch, Budweiser and
Molson.
Threat of H  There has been a rise in the number of the craft beer breweries that have been set up in the
recent times. This has led to the high number of options that are available to the clients of
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Substitutes the breweries.
Buyer Power H  Due to the increase in the number of the number of breweries that deal in the craft beers,
the buying power of the clients have faced a huge amount of increase.
 The present clients of the company have the option s of shifting from Forked River Brewing
Company to the other breweries that have been emerging in the present market.
Supplier Power L  The high rate of competition among the suppliers of the brewery has led to the reduction of
the rates of the raw materials that are needed for the production of the crafted beers.
2.3 What conclusions can you make based on this analysis? Is it an
attractive industry?
 In lieu of the above analyses it might be safely concluded that the crafted beer industry of Ontario is an attractive industry
for the companies that deal with the crafted beers.
 The potential competitors of the company include the other large-scale and small-scale companies that deal in the
production of crafted beers, which has been an attractive product among the younger generations. The younger generation
of the country exhibits a taste for the craft beers which might eventually lead to the increase in the further growth of the
company if the company is able to retain the quality of the manufactured products.
2.4 Conduct a SWOT analysis based on your reading of the case and your
analysis above.
Strengths Weaknesses
 The ability of the company to produce different
flavors of craft beers without compromising on the
quality of the products that are served to the
clientele.
 The company lays its focus mainly on the issues
that pertain to the quality of the products that
they have been offering to the concerned
clientele.
 The various types of the new beers that have been
emerging in the market do seem to pose a threat
to the market share that as been occupied by
Forked River Brewing Company.
 The new style of packaging of the products that
are expected by the clientele might pose to be an
area of weakness of the concerned organization.
Opportunities Threats
 The company has prospects of growth due to their
ability to provide their clientele with the best of
the products.
 The founders also possess the knowledge on the
issues that pertain to the varying tastes of the
clientele.
 The various newly functional breweries that have
been entering the market wherein Forked River
Brewing Company operates. The companies might
lead to the loss of the clientele of the company for
a short period of time.
 The increase in the number of imports of craft
beers from the foreign lands.
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2. Recommendation/Conclusion
3.1 Based on your analysis and conclusions above, what strategic
direction would recommend to Forked River?
 The company might expand itself based on the trends of the present market scenario. This might lead to the company to
deal with the taxes that might follow the expansion. The taxes that might be levied on the breweries might depend on the
size and stretch of the company. The founding members might have to come up with a new strategy for the marketing of
the products that they produce. The advantages of the formulation of a new strategy for the business growth is that the
company finds a solution that might result in the adjustment of the concern with the various changes that has been taking
place in the industry.
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form or by any means without permission.
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