To identify and define Brew 4 U’s competitive advantage, Porter’s Five Forces model will be used to analysis Brew 4 U’s position.
Porter’s Five Forces
Threat of new entrants o Brew 4 U is a new entrant into well-established coffee-shop and café market in Brisbane Technology Park. o The coffee-shop industry has a low barrier to entry due to low market share concentration, low initial outlays and medium regulation and is a steady trend (IbisWorld, 2017). o Ensure to acquire advice from Eight Mile Plain locals or consultants who have experience and knowledge about entering into this or a similar type of competitive market. o Launch Brew 4 U at the start of a busy period.
Bargaining power of suppliers o There is an adequate number of suppliers
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Bargaining power of buyers o Brew 4 U has a large potential consumer base for its products.
The consumer bases have power and influence over Brew 4 U. If buyers form a negative attitude towards Brew 4 U, then the effects can be costly.
Ensure a positive relationship is formed and maintained with customer base. o Consumers will be price sensitive to the price of coffee-shop offerings (see Section 2.3.2).
Price changes that are perceived as unwarranted by consumers can decrease consumer demand and increase buyer power.
Prices must be closely monitored. o There are many indirect substitutes to coffee provided at Brew 4 U, as well as light snacks. This includes soft drinks, tea, energy drinks, fruit juices etc.
To ensure customers to do not switch to substitute products, Brew 4 U must offer products consistently in line with its missing and value and keep up to date with new trends forming in the industry.
Rivalry among competitors o There is a high concentration of indirect competitors and low concentration of direct competitors in Brisbane Technology Park and its surrounding
The GXS Beverage Brewing System falls into the ‘shopping’ category of the three-way consumer classification system. We feel that this product would be purchased much less than a convenience item and consumers will spend some time researching and comparing this item to existing
In this paper I will be talking about the U.S. beer industry and in short an overview of the brewing industry worldwide. I will talk about the barriers to entry, economies of scale, government intervention, pricing, current market trends, product differentiation, and imports. The focus being mainly on the U.S. brewing industry oligopoly. The U.S. brewing industry has three major players: Anheuser-Busch, SAB Miller, and Coors/Molson. Anheuser-Busch is currently the largest brewer in the world, producing over 100 million barrels a year. Anheuser-Busch currently owns over 50% of the market in the United States, with Miller trailing behind at 20% and Coors at about 11% with the rest of the market occupied by imports and craft breweries. When analyzing any industry, how easy it is for newcomers to enter the market is a great importance. If there are high barriers to entry
In a world where large, corporate breweries rule the market, craft beer is created to please an audience that applauds the styles, techniques and flavors. Though craft beer can be purchased through several different outlets, the best place to thoroughly enjoy the entire experience of the specially made beer is in the brewery where it was made. The article titled, “In Lean Times, a Stout Dream” in The Wall Street Journal1 states that, despite the hard economic times and consequent consumer cutbacks, sales of craft beer, the industry 's fastest-growing segment, rose
Strives to be the leader in micro brewing while maintaining the core values it started with and had employee buy in even before it went” 100 % employee owned in2013” (Gorski, 2013).
By eliminating Lightship and introducing a new beer, it will signal to consumers that a real change has occurred with BBC’s product offering. It will show consumers that the new beer is a “fresh and improved” version that is the best in the light beer market. Additionally, it will be able to escape any of the negative connotations Lightship had while on the market. However, this alternative includes high risks, as BBC will be introducing a new product onto the market.
Guinness marketing is focused on the consumers by offering what they want, which are quality. The company want to deliver high quality standards and uses it as an advantage to stand out on the market by offering a stout beer, which is made from their own raw materials, on high-level of equipment and having employers with well-trained capability (Vanguard, 2013), because they believe that you cannot make money from people unless you are willing for people to make money from you (Sohn, 2013). They have also increased their focus on the marketing of Guinness brand name in 2013 by £34 million to boost its quality association on the beer market, so the drinkers get a feeling of quality when they taste a Guinness. This strategy is based on their market research, which confirm that consumers associate a quality pint with a quality pub and 80% of male drinkers believe getting the quality of serve right is more important in draught beer than in any other drink category (Charles, 2013). Therefore Guinness manages to implant a special place in the collective consumer conscience, which leads the consumer into thinking about the great heritage and consistency in quality they possess, wherever it is sold (Diego, 2013). This can be seen in their advertising and communication of slogan, which says that “Good things come to those who wait”, which is referring to the time it takes to pour a perfect Guinness.
The brewing industry can be characterized by Porter’s Five Forces framework. New entries to brewing have a relative ease in creating home micro-breweries, which is aided by
Competitive brewers will introduce newer styles of beers to meet beer drinkers’ new preferences, more specifically lighter beers. However, both styles will be kept under the same brand
Within the craft beer market, consumers have many products to chose. A product is anything offered within a market that which fulfills a want or need (Armstrong & Kotler, 2015). In 2012, over 1,750 breweries operated in the United States (U.S.), with over 1,920 the following year (Brewers,
When purchasing beer, customers have a wide variety to choose from. This provides customers with some power, as there are no switching costs between choosing one beer over another. Interbrew could focus on differentiation in order to combat this. They could market their premium beer
Anheuser-Busch Inbev is one of the largest breweries in the world. “Currently, Anheuser-Busch InBev has a product list of more than 200 beers, including global best-sellers Budweiser, Stella Artois, Beck’s, multi-country brands like Leffe and Hoegaarden, and strong “local jewels” such as Bud Light, Skol, Brahma, Quilmes, Michelob, Harbin, Sedrin, Cass, Klinskoye, Sibirskaya Korona, Chernigivske, and Jupiler, among others that have helped to make the company so successful. In addition,
Close Substitutes – Varies (tea is a close substitute that can be as diverse as coffee while other beverages can be similar to coffee based on the dimensions for comparison.)
The demand for coffee shops is born from the increased number of individuals seeking coffee brewed outside of the home. This creates a larger market for coffee shops. An increased amount of people are starting their mornings off by purchasing breakfast and a cup of coffee away from home (Tuttle 2014), more people are enjoying gourmet coffee (NCA National Coffee Drinking Trends 2015 Infographic), and younger generations are demanding more coffee and coffee drinks from coffee shops (Tuttle 2014, S&D Coffee and Tea inc. 2014, Statista 2015). Coffee shops must compete with at home coffee, work place coffee, and teas for the caffeinated beverage markets (LN 2015). Demand for coffee within different markets varies, and provides competition for coffee shops. Single cup coffee makers, increasingly qualitative instant coffees, and gourmet beans are all sources of competition that could satisfy the demand for coffee. However, coffee shops are becoming more ingrained in social
Porter's First force is the threat of Potential Entrants. Statistics have shown the industry to be slowing down, therefore making competition high and the threat of new entrants low. Broadway Cafe has a small market presence, but the presence of its competitors like Starbucks
Beer Company 2 is a brewer of “seasonal and year-round beers with smaller production volume and higher prices” that “outsources most of its brewing activity” (pg. 120). It is financially conservative, and has undergone a “major cost-savings initiative to counterbalance the recent surge in packaging and freight costs” (pg. 120).