The Boston Beer Company

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The Boston Beer Company

BEM106 Final Project

Brian Cleary Sarah Luxenberg Peter Seidel Bill Van de Water

May 28, 2004

Overview The Boston Beer Company has had amazing success in its transition from a small scale microbrewer to a large scale national brewery. Almost all of the company’s success is due to the Samuel Adams Lager product line, which has hardly changed from the founding of the company in 1984, to the IPO in 1995, to the present day. In fact, much of the appeal of Samuel Adams comes from its microbrew image and the founder, Jim Koch’s, commitment to the brewing process and a premium beer. In recent years, however, the company has implemented a new strategy for growth which has included introducing a light beer that
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But now there are new challenges facing the company. There are always new fads in the beer industry; current trends are low-carb beers and fruityflavored malt beverages. The Boston Beer Company needs to decide which of these trends to respond to, and how to respond to each. Above all the company needs to continue its strategy of differentiation that allowed it to achieve its current profitability. It is its image for quality above major American beers like Budweiser, Coors, and Miller that allows it to keep its prices, and its profits, high.

Current Industry Analysis The Boston Beer Company’s product is a “better” beer. A better beer is defined as either a craft beer or an import, and is characterized by higher prices and quality. A craft beer is defined as one which is brewed with 100% malted barley as its grain. The major American beer companies typically use a mixture of malted barley along with other grains such as rice or corn, since these are less expensive and have less full-bodied flavors. Rivals in the better beer industry include such foreign companies as Corona, Heineken, and Guinness, as well as domestic companies such as Sierra Nevada, Pete’s, and a number of microbreweries around the country. While the beer industry overall is very rivalrous, the better beer industry is not so, as evidenced by high profit margins (the Boston

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