Answer To: UTS Strategy Marking Sheet Individual Final Assignment Assessment requires: Provides an in-depth and...
Soumi answered on May 17 2021
STRATEGIC MANAGEMENT
ANALYSIS OF THE AUSTRALIAN MICROBREWERY INDUSTRY USING THREATS TO SUBSTITUTION OF PORTER’S FIVE FORCES
Table of Contents
Introduction 3
Competition between Large, Global Incumbents and Small Start-Ups 3
Competition across Many Dimensions including Price, Distribution Channels, Flavour and Image 3
Complex Inter-Organisational Relationships to Compete across Markets and Product Categories 4
Challenge of Scaling Up for Fast Growth 4
Segments of Market Dependent on Rapid Product Innovation 5
Ethical challenges Associated with Authenticity 5
Emergence of Different Business Models 6
Shifts in Government Regulation 6
Internationalisation 7
Conclusion 7
References 8
Introduction
Microbrewery or craft brewery is known as a brewery, which produces small quantities of beer, much lesser in quantity than the large-scale breweries, and are owned independently. The speciality of these breweries is their flavours, quality and brewing techniques. This began in 1970s in United Kingdom and with time, the breweries expanded their productions and distributions. According to Embry (2018), with time, the scales of brewing in different pubs and places changed and along with came into existence various types of breweries like Nanobrewery, farm brewery and Brewpub. It has shown a rapid growth in the past decade with almost being tripled of the number with that it started.
Competition between Large, Global Incumbents and Small Start-Ups
The business of beer producing is a huge empire. There are various beer brewing companies, small, medium and large scaled, brewing different kind of beers for the consumers spread all over the world. Beer is among the highest consumed alcoholic beverage and also is a beverage, which is consumed most commonly in the world. Major Beer companies have separated territories as their target market while they also operate in the other places along with their competitors (Department of Revenue, 2016). The annual growth rate of the beer industry is expected to get steady in the near future.
The Compounded Annual Growth Rate (CAGR) of the beer industry is 2 % approximately. The more innovative products the beer companies can come up with, the more would be their popularity among the consumers. The target consumers have evolved, and their tastes have changed, so the beer companies must adapt accordingly to survive in the market. As per Miller and Weinberg (2016), most of the consumers are more interested in the place, process and reason behind the brewing of the beer whenever they come across any new brand. With the entry of new beer brands and types, the companies are expected to evolve accordingly as the competition is fierce and every small minute factor like availability, tastes and flavours are to be focused on to keep up with the other brands.
Competition across Many Dimensions including Price, Distribution Channels, Flavour and Image
The beer brewing companies are very specific about their products and are continuously evolving their products as per consumers’ choices, tastes and preferences about their products. There are approximately 6300 craft breweries, growing up to 16 % than the previous year and an increase of 116 % than 2013 (Craft Brewers, 2016). This is a huge growth within such a short time. This clearly shows that the demand of beer products has taken a sudden leap in the market with different new products introduced, attracting a greater number of consumers. Approximately 25 million of barrels were produces and around 12.7 % market share was increased than the previous year in the overall beer industry (Brewers Association, 2016).
The beer industry even forecasts a huge growth in the market, which would be steady in the upcoming years and hence, new products with different flavours, price and image are been produced and launched in various markets throughout the world depending on the tastes and preferences of the customers of that area. As indicated by Zanotti, Reyes and Fernandez (2018), even the distribution channels for different products are different as the target market and target consumers are completely different from place to place.
Hence, the companies need to make sure they adapt proper distribution channel for proper supply of the products in those markets as unavailability of products in areas with high demand for that product can be very negative towards the brand image of the companies as they might lose a huge market share as customers would be forced to shift to other products due to unavailability of the products.
Complex Inter-Organisational Relationships to Compete across Markets and Product Categories
The Belgian giant, Anheuser Busch InBev exited the...