Boston Beer Case Study

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Boston Beer Background: Jim Koch was motivated and haunted by the idea of being an entrepreneur in the beer brewing business. Once upon a time his great-great-grandfather created a recipe that was full bodied, had a longer brewing time, used rare hops, and cost a lot more than the imports are costing. Koch saved $100,000 and was able to acquire $140,000 from family and friends to start up his brewery. Knowing that it would cost close to $10 million to actually open a brewery, Koch contracted out his brewing to an existing company, The Pittsburg Brewing Company, and named the beer Samuel Adams after the revolutionary icon who was also a brewer. The first step had been made; Koch only needed to find bars and retailers willing to carry the…show more content…
Unfortunatley that was short lived as stock prices fell and held at $8-$10 a share in 2001. The stock price drop scared Koch into believing that he may need to cut back on his beer offering and hone in on the best sellers. Though the continued success of the beer brand and the volatility of the market bringing SAM up to a peak at $55.30 in 2007 the idea was scrapped. Recommendations: Generally with entrepreneurial activities I would say go big or go broke. You really need to commit to the project and Koch did that. The best thing that he could have done was to do what he did. He stuck to his guns and kept the recipe, ousted the imports for sub-par ingredients, contracted out his brewing, bought his own trucks, went bar to bar to sell the product, and created flavors and combinations worthy of a gold medal. My only recommendation as an entrepreneur is that when a company expands it should do so with kid gloves because overexpansion too quickly can dry out the desire for the product and leave you stretched thin. Distribution and logistics of expansion are always a problem for new companies. Larger corporate run companies tend to buy up the manufacturers, wholesalers, and distributers so that not only will they have their product where they want it but they also won’t be competing with other companies for the business. Koch decided to stick it to the man and buy his own trucks to deliver his beer. As well and good as

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