Using the case study in the Crafting and Executing Strategy. The Quest for Compe

Question

Using the case study in the Crafting and Executing Strategy. The Quest for Competitive Advantage 21st Edition book Evaluating a company's external environment Case #5 The Craft Beer Industry Assess the bargaining power of suppliers, the threat of substitutes, and threat of new entrants in the craft beer industry? Rate each force (strong moderate, or weak) and justify your rating (see Chapter 3 and Chapter 3 lecture) What was the Net Profit Margin for the Craft Brew Alliance and AB InBev in 2014? Provide your calculations and explain what they mean. Fallure to provide your data and calculations as well as an explanation will result in a loss of points for all cases asking financial questions

Explanation / Answer

Competition comes from five forces; three of these are:

Specific grain required for grain-specific beer; grains used include wheat, rye, and, corn. Specialized Grains, or, Hops are difficult to obtain. Specialized brewing requires identifying suppliers, and, maintaining the supply chain. Global producers use economies of scale, and, ask for procurement at a lower price. Hops & grains are categorized under this. The ingredients are used by specialty brewers.

AB InBev Profit from operations can be calculated as follows:

Using the data, the profit values for 2013, 2014, and, 2015 are $23428, $18465, and, $17057. The values for Craft Brew Alliance are $1959, $3077, $2218 respectively.

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