New Belgium Case Analysis

2412 Words Apr 14th, 2013 10 Pages
Introduction

The New Belgium Brewing Company is one of the top three craft beer breweries in the nation. It has experienced solid growth from its original entry as a niche marketer to a brand that is now distributed across the country. Much of New Belgium’s success is a result of a well-developed positioning strategy that promotes the company’s culture as much as its product. Not coincidentally, New Belgium’s target market chooses brands like Fat Tire because of both the company’s culture and its product. Our evaluation of the two New Belgium cases indicates that the craft beer industry remains an attractive investment for the company, particularly because of its specific capabilities and resources. The cases also suggest that a
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New Belgium is, however, the third-largest craft brewery in the nation, with estimated sales of over $100 million, equaling approximately 700,000 barrels of beer per year. An analysis of the craft beer industry as a whole suggests that there is continued growth potential for New Belgium. Exhibit 5.1 of the New Belgium Brewing (B) case shows that craft beer is the fastest growing segment of the U.S. alcoholic beverage market, with an increase in market share of over 100 percent from 1999-2011. It is also an industry whose customers tend to be extremely loyal, making them less likely to view craft beer as a commodity. Consequently, craft beer has a higher probability of being immune to competition from inferior goods and substitutes. This is particularly applicable to New Belgium’s target market of “beer connoisseurs” that appreciate the high quality and taste of craft beer and who include “executives, lawyers, and accountants” with the continued ability to pay higher prices for craft beer, enabling the craft beer industry to achieve gross margins of up to 30 percent (Clark & Rogler, 2013).
Four other strengths of New Belgium indicate continued

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