Harvard Case - The Bitter Sisters Brewery: Pivoting to Address the Pandemic
"The Bitter Sisters Brewery: Pivoting to Address the Pandemic" Harvard business case study is written by Christian Cook, Denise Chenger. It deals with the challenges in the field of Strategy. The case study is 12 page(s) long and it was first published on : Nov 30, 2021
At Fern Fort University, we recommend a multi-pronged strategy for The Bitter Sisters Brewery to address the pandemic's impact and achieve sustainable growth. This strategy focuses on leveraging existing strengths, adapting to changing consumer preferences, and embracing digital transformation to enhance customer experience and strengthen brand loyalty.
2. Background
The Bitter Sisters Brewery is a craft brewery established in 2014, known for its high-quality beers and strong community engagement. The COVID-19 pandemic significantly impacted their business model, forcing them to adapt to changing consumer behavior and navigate the challenges of reduced on-premise consumption and social distancing restrictions.
The case study focuses on the two sisters, owners and operators of the brewery, who are struggling to maintain their business amidst the pandemic. They are faced with declining sales, uncertainty about the future of the industry, and the need to find new ways to reach their customers.
3. Analysis of the Case Study
SWOT Analysis:
Strengths:
- Strong brand reputation: The Bitter Sisters Brewery has built a strong brand reputation for quality beer and community engagement.
- Loyal customer base: They have a loyal customer base who appreciate their unique craft beers and welcoming atmosphere.
- Experienced team: The sisters have a strong team with expertise in brewing, operations, and marketing.
- Community focus: Their strong community focus has fostered positive relationships with local businesses and residents.
Weaknesses:
- Limited online presence: Their online presence is underdeveloped, limiting their ability to reach new customers and build a strong online community.
- Dependence on on-premise sales: Their business model heavily relies on on-premise sales, making them vulnerable to disruptions in the hospitality industry.
- Lack of diversification: They lack diversification in their product offerings and revenue streams, limiting their resilience to market fluctuations.
Opportunities:
- Growing demand for craft beer: The craft beer industry continues to grow, presenting opportunities for expansion and market penetration.
- Increased online sales: The pandemic has accelerated the shift towards online sales, providing opportunities to reach new customers and expand their market reach.
- Innovation in brewing and packaging: Advancements in brewing technology and packaging offer opportunities for product differentiation and cost optimization.
Threats:
- Economic uncertainty: The pandemic's economic impact poses a significant threat to consumer spending and business operations.
- Increased competition: The craft beer industry is becoming increasingly competitive, requiring continuous innovation and differentiation.
- Changing consumer preferences: Consumers are becoming more health-conscious and demanding sustainable practices, requiring adaptation in product offerings and business operations.
Porter's Five Forces:
- Threat of new entrants: The craft beer industry has a high barrier to entry due to high initial investment costs and regulatory requirements.
- Bargaining power of buyers: Consumers have a moderate bargaining power, as they can choose from a wide range of craft beers.
- Bargaining power of suppliers: Suppliers have moderate bargaining power, as the brewery relies on a limited number of suppliers for raw materials.
- Threat of substitutes: Consumers can choose from other alcoholic beverages, including wine, spirits, and non-alcoholic alternatives.
- Intensity of rivalry: The craft beer industry is characterized by intense rivalry, driven by the desire to gain market share and differentiate products.
Value Chain Analysis:
The Bitter Sisters Brewery's value chain comprises the following activities:
- Inbound logistics: Sourcing high-quality ingredients and packaging materials.
- Operations: Brewing, bottling, and packaging beer.
- Outbound logistics: Distributing beer to retail outlets and customers.
- Marketing and sales: Promoting their brand, products, and events.
- Customer service: Providing excellent customer service and building relationships.
Business Model Innovation:
The Bitter Sisters Brewery needs to innovate their business model to adapt to the changing market dynamics. This can be achieved through:
- Direct-to-consumer sales: Expanding their online sales platform and offering home delivery options.
- Subscription services: Introducing a subscription service for regular deliveries of their beers.
- Virtual events and tastings: Organizing virtual events and tastings to engage customers and promote their products.
- Partnerships with local businesses: Collaborating with local businesses to offer brewery tours, tastings, and special events.
4. Recommendations
Short-Term (3-6 months):
- Enhance online presence: Develop a user-friendly website and social media presence to reach new customers and promote online ordering.
- Implement online ordering and delivery: Partner with a delivery service or build an in-house delivery system to provide convenient and safe options for customers.
- Offer virtual events and tastings: Host virtual events and tastings to engage customers, promote new products, and build a community online.
- Explore partnerships with local businesses: Collaborate with restaurants, bars, and retailers to offer their beers and expand their distribution network.
- Optimize production and packaging: Explore cost-effective packaging options and optimize production processes to reduce waste and increase efficiency.
Mid-Term (6-12 months):
- Develop a subscription service: Introduce a subscription service to provide regular deliveries of their beers and build customer loyalty.
- Expand product offerings: Introduce new beer styles and seasonal brews to cater to diverse consumer preferences.
- Explore new distribution channels: Investigate opportunities to expand their distribution network through partnerships with wholesalers and distributors.
- Invest in technology and analytics: Implement a CRM system to track customer data and personalize marketing efforts.
- Develop a sustainable business model: Implement environmentally friendly practices and source sustainable ingredients to appeal to environmentally conscious consumers.
Long-Term (12+ months):
- Expand into new markets: Explore opportunities to expand into new geographic markets, leveraging online sales and strategic partnerships.
- Develop a brand extension strategy: Consider expanding their product portfolio to include non-alcoholic beverages, merchandise, or other related products.
- Invest in marketing and branding: Develop a comprehensive marketing strategy to build brand awareness and drive customer acquisition.
- Build a strong online community: Foster a sense of community online through engaging content, interactive events, and customer feedback mechanisms.
- Develop a strategic partnership with a larger brewery: Explore strategic alliances with larger breweries to access their distribution network and resources.
5. Basis of Recommendations
These recommendations are based on a comprehensive analysis of the Bitter Sisters Brewery's strengths, weaknesses, opportunities, and threats. They are aligned with the company's core competencies, including brewing expertise, community engagement, and customer focus. The recommendations also consider the evolving needs of external customers and internal clients, as well as the competitive landscape of the craft beer industry.
The recommendations are designed to enhance the brewery's competitive advantage through product differentiation, cost leadership, and market penetration. They are also supported by quantitative measures, such as increased online sales, improved customer retention, and expanded market reach.
Assumptions:
- The craft beer industry will continue to grow in the long term.
- Consumers will continue to embrace online ordering and delivery services.
- The brewery will be able to effectively implement its digital transformation strategy.
- The brewery will be able to secure funding for its expansion plans.
6. Conclusion
The Bitter Sisters Brewery has the potential to emerge from the pandemic stronger than ever by embracing digital transformation, diversifying its revenue streams, and focusing on building a loyal customer base. By implementing the recommendations outlined above, they can navigate the challenges of the evolving market landscape and achieve sustainable growth.
7. Discussion
Alternative Options:
- Merging with another brewery: This could provide access to resources and distribution networks but could also compromise the brewery's independence and brand identity.
- Focusing solely on on-premise sales: This would limit their market reach and make them vulnerable to future disruptions in the hospitality industry.
- Selling the brewery: This would provide immediate financial relief but would also end the sisters' entrepreneurial journey.
Risks and Key Assumptions:
- Competition: The craft beer industry is highly competitive, and the brewery may face challenges in differentiating itself from competitors.
- Consumer demand: The demand for craft beer may decline in the future, impacting the brewery's sales and profitability.
- Technological challenges: The brewery may face challenges in implementing its digital transformation strategy, such as technical difficulties or resistance to change.
- Financial resources: The brewery may struggle to secure funding for its expansion plans, limiting its ability to implement its growth strategy.
8. Next Steps
Timeline:
- Month 1-3: Implement online ordering and delivery system, develop social media strategy, and host virtual events.
- Month 4-6: Launch subscription service, introduce new beer styles, and explore partnerships with local businesses.
- Month 7-9: Invest in technology and analytics, develop a sustainable business model, and explore new distribution channels.
- Month 10-12: Begin exploring expansion into new markets, develop a brand extension strategy, and invest in marketing and branding.
By following this timeline and implementing the recommendations outlined above, The Bitter Sisters Brewery can successfully navigate the challenges of the pandemic and achieve sustainable growth in the long term.
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Case Description
After almost a year of rebranding and renovations, the Bitter Sisters Brewery opened to rave reviews on February 14, 2020, in Calgary, Alberta. Just 29 days later, the COVID-19 pandemic would force the brewery's doors shut for over three months. Two further closures would come in 2020, and times remained uncertain as of December of that year. The owners had to pivot-and quickly-to ensure the viability of their business in volatile times.
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