Anheuser Busch Inbev Persuasive Essay

Demand for a good/product as Sherman et al. (2008) note "is the quantity of that good buyers would be willing and able to purchase during a given period, at various price levels"¦" Currently, the entity has "a 48.3 percent share of U.S. beer sales to retailers" (Anheuser Busch 2011). In this case, using the percentage of beer sales the firm makes to retailers as an indicator of demand, one can easily conclude that the demand for Anheuser Busch's products is quite high. The high demand in this case can be attributed to aggressive marketing and advertising as well as a recovering economy.

In the United States the beer industries are regulated by the state and the federal governments. The state and the federal government pass their opinions in term of production, advertisement, distribution,

What this means is that their “facilities are organized around a product […]; they have long, continuous process” (Heizer, Render and Munson, p.284). The process is in continuous motion. Anheuser-Busch has a demand and a need to be continuous because they require high volume; “Budweiser and Bud Light, the company’s beers lead numerous beer segments and combined hold 46.4 percent share of the U.S. beer market” (About, n.d.). That is almost half of the entire beer industry is dependent on them. Anheuser-Busch have low variety- although this company has what can be seemingly a variety of products, there are very minimal changes other than slight changes to the recipe that differentiate each family of beers (National Geographic, 4:25, 2011). Meaning that the process is the same the ingredients are what differ. According to the text, “That is to be expected as the attributes change” (Showghi, slide 4,2016). It is still the same product in the end. Because they are producing only beer, they have high fixed costs and low variable cost, they are not making any drastic changes to their product keeping the input the same. Less skilled labor is not part of the equation in this instance; breweries are looking for people with high skills in

Major competitors in light beer are Anheuser Busch, Miller Brewing, and Adolf Coors, representing 74% of beer shipments in Mountain Man’s region.

The beer industry can be considered a monopoly since large national brewers maintain economies of scale in brewing, better distribution tactics, spend heavily on advertisement, and create barriers of entry for other smaller brands.

     The brewing industry was once held to competition among many breweries in small geographic areas. That was almost a century ago. The U.S. brewing industry today is characterized by the dominance of three brewers, which I will talk about in this paper. There are many factors today that make the beer industry an oligopoly. Such factors include various advancements in technology (packaging, shipping and production), takeovers and mergers, economies of scale, barriers to entry, high concentration, and many other factors that I will cover in this paper. Over the course of the paper I will try to define an oligopoly, give a brief history of the brewing industry, and finally to show how the brewing industry today is an

In order to grow, Boston Beer must continue to increase its market share in the overall beer market. The market continues to be dominated by the large scale breweries like Anheuser Busch, Adolph Coors Co, and Miller Brewing Co. Craft Breweries are beginning to increase their share in the overall market. It is expected that craft breweries will account for 5% of the overall beer market in 2000, up from 1.4%. However, there is increased competition in the craft beer market. There were 165 new craft brewers in 1994. This increased the total of craft breweries in the US to 750. Boston Beer will be competing with these 750 breweries for 5% of the 5 billion in US beer revenues.

The American company Anheuser-Bush (AB) cannot market its beer using their trademark name Budweiser in every country around the world. This is due to the fact that there is an European brewing company that uses the same trademark.

The Boston Beer Company, Inc., founded in 1984, is a leading brewer in United States, offering wide variety of high quality full-flavored, handcraftedbeers. It is distinctive due to the time-honored recipe of brewing and authentic, consistent quality of alcoholic beverages. Samuel Adams Boston Lager is the pride of BBC, regular handcrafted beer “stands for quality, inner self-worth, authenticity, and unique New England or Yankee toughness” ( Martin Roper, Chief Operating Officer). Unfortunately, the company experienced the failure of conquering light beer segment

A documentary film made in 2009, Beer wars features and describes the American beer industry distinguishing between the large and small breweries. The large breweries feature some main corporate companies like Coors Brewing Company, Anheuser-Busch, and Miller Brewing Company whereas the small breweries include craft beer producers like Moonshot 69, Stone Brewing Company, Dogfish Head Brewery, Yuengling, and others. The documentary shows how the beer market is controlled through advertising and lobbying, which is harmful for the competition in the market. There is a reason why the small companies are falling behind and the large corporates are controlling the market, which in turn makes it essentially oligopoly economy.

The Boston Beer Company is currently the largest craft beer company in the United States, however, the craft beer industry is growing in an otherwise shrinking market increasing the amount of serious competition that The Boston Beer Company is facing.

Budweiser and Bud Light are the No.1 and No. 2 best-selling beers in the world. Miller, their closest rival maintains 22.1% of the market share. The following chart illustrates market share in 1999 for the nation’s leading breweries.

Beer has a long history. In 2000 B.C.E., Sumerians had prepared eight different beer types, ranging from “strong,” “red brown,” and “good dark” (Mauk, 2013). Breweries have created their own recipes, brewed their own beers—some with alcohol, some without. Over the past few years, craft beer gained steady market share away from the national and international breweries (Murray & O 'Neill, 2012). Separating one beer from the next is the product itself, and what the product has to offer. Competition is ferocious due to more informed, sophisticated consumers, as well as globalization and the spread of technology (Murray & O 'Neill, 2012).

As the world’s largest brewer, AB Inbev has the ability to compete in new and foreign markets as a strong threat. Due to their enormous capital and expansion-based strategy, they can enter any market as a challenger and shutdown competition to become the leading brewer in this market. As an aggregated note we can also see this in domestic or already dominated markets because due to economics of scale they can achieve differentiated products at a low cost.

Although sales of premium brands have fallen in a steady response to the growing popularity of the craft beer. The industry revenue has been stable over the past 5 years. As a result, from 2011 to 2016 the industry revenue is expected an increase and growth annually at 6.7 percent over the five years,with a total of $39.5 billion . (IBISWorld iExpert) In the long-term, these numbers are expected that grow 0.9 percent annually within the next five years. The potential growth will be seen in the traditional and premium beer sector. As a response, the giant companies in the industry Anheuser-Busch InBev and MillerCoors look forward into the merges and acquisitions as a strategy to maintain market dominance. The strategy is based on the