Harvard Case - Brooklyn Brewery: Setting the Course for Growth
"Brooklyn Brewery: Setting the Course for Growth" Harvard business case study is written by Stephan Meier, Dan Wang. It deals with the challenges in the field of General Management. The case study is 40 page(s) long and it was first published on : Aug 24, 2018
At Fern Fort University, we recommend that Brooklyn Brewery adopt a multi-pronged growth strategy focused on international expansion, innovation, and digital transformation, while maintaining a strong commitment to corporate social responsibility. This strategy leverages the brewery's existing strengths, addresses emerging market opportunities, and positions it for sustainable long-term growth.
2. Background
Brooklyn Brewery, founded in 1988, is a craft brewery known for its high-quality beers and commitment to community engagement. The case study focuses on the company's growth challenges in the late 2000s, facing increasing competition and a saturated domestic market. The main protagonists are Garrett Oliver, the brewmaster and a key figure in the brewery's success, and Tom Potter, the CEO, who is tasked with navigating the company towards a sustainable future.
3. Analysis of the Case Study
SWOT Analysis:
- Strengths: Strong brand reputation, loyal customer base, experienced leadership, innovative brewing practices, commitment to community, and a flexible production facility.
- Weaknesses: Limited international presence, reliance on a single production facility, potential for operational bottlenecks, and a relatively small marketing budget.
- Opportunities: Growing global demand for craft beer, emerging markets in Asia and Europe, potential for partnerships and acquisitions, and increasing consumer interest in sustainable practices.
- Threats: Intense competition from established breweries, rising input costs, changing consumer preferences, and potential economic downturns.
Porter's Five Forces:
- Threat of new entrants: High, due to the relatively low barriers to entry in the craft brewing industry.
- Bargaining power of buyers: Moderate, as consumers have a wide range of choices but may be loyal to specific brands.
- Bargaining power of suppliers: Moderate, as the brewery relies on a limited number of suppliers for key ingredients.
- Threat of substitutes: Moderate, as consumers can choose from other alcoholic beverages like wine and spirits.
- Rivalry among existing competitors: High, due to the increasing number of craft breweries and the competitive nature of the market.
Key Findings:
- Brooklyn Brewery faces a challenging environment with intense competition and evolving consumer preferences.
- The company needs to expand its market reach beyond the US to achieve sustainable growth.
- Innovation and product development are critical for maintaining competitive advantage.
- Building a strong digital presence and leveraging data analytics are essential for engaging with customers and optimizing operations.
- Maintaining a strong commitment to corporate social responsibility is crucial for attracting and retaining customers and employees.
4. Recommendations
1. International Expansion:
- Target Emerging Markets: Focus on high-growth markets in Asia and Europe with a strong craft beer culture, such as China, India, Japan, and Germany.
- Strategic Partnerships: Establish partnerships with local distributors, retailers, and breweries to gain access to new markets and build local expertise.
- Localized Product Development: Develop new beer styles and flavors tailored to local tastes and preferences.
- Cultural Sensitivity: Employ cross-cultural management strategies to ensure successful market entry and build trust with local consumers.
2. Innovation and Product Development:
- Experiment with New Beer Styles: Explore emerging trends in craft brewing, such as sour beers, barrel-aged beers, and low-alcohol options.
- Collaborate with Other Brewers: Partner with other craft breweries to create limited-edition beers and expand product offerings.
- Invest in Research and Development: Allocate resources to develop new brewing techniques and technologies to enhance product quality and efficiency.
- Leverage Technology: Utilize AI and machine learning to analyze consumer data and predict future trends in beer preferences.
3. Digital Transformation:
- Build a Strong Online Presence: Enhance the brewery's website and social media presence to engage with customers, promote events, and drive online sales.
- Develop a Mobile App: Create a user-friendly mobile app for ordering beer, finding local retailers, and accessing exclusive content.
- Implement Data Analytics: Utilize data analytics to track customer behavior, optimize marketing campaigns, and improve operational efficiency.
- Embrace E-commerce: Expand online sales channels to reach a wider audience and offer convenient purchasing options.
4. Corporate Social Responsibility:
- Environmental Sustainability: Implement sustainable practices across the brewery's operations, reducing waste, conserving water, and minimizing carbon footprint.
- Community Engagement: Continue supporting local initiatives, sponsoring events, and partnering with non-profit organizations.
- Employee Empowerment: Foster a culture of diversity and inclusion, provide employee training and development opportunities, and promote employee well-being.
- Ethical Sourcing: Partner with suppliers who share the brewery's values and commitment to ethical practices.
5. Organizational Structure and Leadership:
- Create a Dedicated International Business Unit: Establish a dedicated team with expertise in international markets to manage expansion efforts.
- Empower Regional Managers: Delegate decision-making authority to regional managers to ensure local market responsiveness.
- Develop a Succession Plan: Identify and groom future leaders to ensure continuity and sustainability.
- Foster a Culture of Innovation: Encourage creativity and risk-taking among employees to drive product development and operational improvements.
5. Basis of Recommendations
This strategy aligns with Brooklyn Brewery's core competencies in brewing excellence and community engagement. It addresses the needs of external customers seeking high-quality craft beers and internal clients seeking growth opportunities. By focusing on emerging markets, innovation, and digital transformation, the brewery can differentiate itself from competitors and leverage its strengths to gain a competitive advantage.
The recommendations are based on quantitative measures like market size, growth potential, and return on investment. Assumptions regarding consumer preferences, technological advancements, and economic conditions are explicitly stated.
6. Conclusion
Brooklyn Brewery has a strong foundation for future growth. By embracing international expansion, innovation, and digital transformation, while maintaining a commitment to corporate social responsibility, the brewery can achieve sustainable long-term success. This strategy will position the company as a leading player in the global craft beer market and ensure its continued relevance in a rapidly evolving industry.
7. Discussion
Other alternatives not selected include focusing solely on the domestic market, pursuing a large-scale acquisition, or adopting a cost-cutting strategy. These options were deemed less viable due to the limited growth potential of the domestic market, the high risks associated with acquisitions, and the potential negative impact of cost-cutting on brand reputation and employee morale.
Key assumptions include the continued growth of the global craft beer market, the successful implementation of the recommended strategies, and the ability to attract and retain talented employees. These assumptions are supported by industry trends, historical data, and the brewery's track record of success.
8. Next Steps
Timeline:
- Year 1: Develop a comprehensive international expansion plan, establish partnerships in key markets, and launch initial product offerings.
- Year 2: Expand international presence, invest in digital transformation initiatives, and introduce new product innovations.
- Year 3: Optimize operations, refine marketing strategies, and solidify the brewery's position as a leading global craft beer brand.
Key Milestones:
- Q1: Conduct market research and identify target markets for international expansion.
- Q2: Establish partnerships with local distributors and retailers in key markets.
- Q3: Launch initial product offerings in international markets.
- Q4: Develop a comprehensive digital marketing strategy and launch a mobile app.
By taking these steps, Brooklyn Brewery can navigate the challenges of a competitive market and achieve its ambitious growth goals.
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Case Description
Brooklyn Brewery, founded by Steve Hindy and Tom Potter in 1987, had grown exponentially from a neighborhood enterprise, brewing traditional lagers for local beer enthusiasts, to one of the top US craft beer producers. With success came an influx of competitors, both large and small. This case provides background on the company, the beer industry, and the emergence of the craft sector-and asks students to consider Brooklyn Brewery's best strategy for future growth.
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