Introduction
The Boston Beer Company Inc. was established in 1984 in the USA, producing different products, such as beer, cider, iced tea, etc. Bost Beer sells its products under the nine brand names, including Samual Adams, Dogfish Head, Twisted Tea, and others. The Boston Beer Company’s president announced new brands, implemented capital projects, addressed occurred trends and purchased other brewers, which increased its revenue and let it occupy new markets. Concerning the company’s competitive advantage, the role of the Samuel Adams brand, economic value for customers through high-quality beer should be discussed.
The Boston Beer Company does not address the trend of eating and drinking healthy food and is strongly tied with a domestic market, which may pose potential challenges to its development strategies. Finally, Boston Beer is being provided with strategies to maintain and increase its growth of recognition and profit in the closing part of this paper.
The Effectiveness of Boston Beer’s Leadership
In 2015, the Boston Beer company continued its growth due to the most popular brands (Samual Adams, Traveler, Twisted Tea, Angry Orchard). Thus, the company’s president and CEO of the company Martin Roper, announced the desire to introduce new brands to increase investment in those discussed above (The Boston Beer Company: Poised for growth, 2021). Although it was decided to improve the supply chain, the company also “had completed a number of significant capital and efficiency projects in 2014 to increase its capacity and capabilities” (The Boston Beer Company: Poised for growth, 2021, p. C99). Therefore, one can claim that the president and CEO of Boston Beer is a driver for the company’s development because making decisions about new brands and completing capital projects has increased the firm’s position in the market.
Moreover, it is the CEO’s ability to respond to new trends that make Boston Beer increase its profits (The Boston Beer Company: Poised for growth, 2021, C99). This trend encouraged the Boston Beer Company to compete with the industry of premium beer, including such world-famous brands as Heineken and Corona. The industry of premium beer was the only one that experienced growth, as the industry of wines and spirits. Therefore, the Boston Beer Company, due to its leadership, decided to enter the competition in order not to lose revenue by producing mere craft beer.
Another indicator of the permanent growth of the company and its wise leadership lies in the purchasing of small and large brewers. For instance, “continued success for the business led to the purchase of a large brewery in Cincinnati in 1997,” and then, “in 2008 the Boston Beel Company purchased a world-class brewery in Lehigh, Pennsylvania” (The Boston Beer Company: Poised for growth, 2021, p. C100). The purchasing capability indicates its high revenue and further development plans to extend the occupied market. Therefore, purchasing brewers can be called a wise decision of the company’s leadership that increases Boston Beer’s effectiveness.
The Basis of Boston Beer’s Competitive Advantage
Samual Adams brand of the Boston Beer Company is the strongest among other brands in terms of its competitive capability. According to the case, “Samuel Adams had won more awards in international beer-tasting competitions than any other brewery in the world” and has to compete with other 1,000 breweries around the country (The Boston Beer Company: Poised for growth, 2021, p. C100).
Although the position of products in the market and the availability of beer taps in bars depend heavily on distributors, making it hard for small breweries to occupy the market, “the Boston Beer Company made a name for itself and sold its beer to a network of approximately 400 distributors” (The Boston Beer Company: Poised for growth, 2021, p. C106). Therefore, one of the competitive advantages of the Boston Beer Company is its brand, Samuel Adams, and the firm’s permanent desire to invest as much as possible in it. For instance, by launching capital projects, introducing new brands, and increasing the number of beer flavors up to 50, Boston Beers seeks to invest the profits in the promotion of Samuel Adams (The Boston Beer Company: Poised for growth, 2021).
Despite the high competition with wine, beer, and other companies producing alcoholic drinks, Boston Beer is managing to preserve its leading position in the market. According to Calo et al. (2021), “Boston Beer has thrived by creating economic value with consumers through its high quality craft products while simultaneously leveraging its size over other craft brewers to achieve cost leadership within that strategic group” (p. 2). In other words, the Boston Beer company tries to produce more beer as possible to make the production less pricey, remaining being the craft brewery. Therefore, it is another competitive advantage of the company: providing economic value for customers through high-quality drinks.
To conclude the discussion about the competitive advantages of the Boston Beer Company, one should recall launched innovative flavors. As it was mentioned above, the company introduced nearly 50 flavors of the Samual Adams beer; however, new tastes are also launched for other drinks, including non-alcoholic. Innovations help the company to interest new customers and to preserve the permanent clients. Moreover, strong recognition of the Samuel Adams brand and the focus on marketing efforts earning money for the investment in the leading brand also contribute to the leading position of Boston Beer in the market.
Potential Challenges to Boston Beer’s Strategy
The main challenge to Boston Beer’s strategy to promote its craft beer in the market, investing a lot in the Samuel Adams brand, is changing tastes and the trend to eat and drink healthy. According to Calo et al. (2021), “this puts Boston in vulnerable position as its product portfolio is heavily malt-based and they just spent significant capital acquiring another large craft brewery – Dogfish Head” (p. 3).
Dogfish Head is another company brand that focuses on unique sour beers using locally grown tropical fruits. On the one hand, the introduction of new flavors and the focus on fruits and sour beers may be beneficial for the company in times of tendency to flavorful drinks. However, on the other hand, a massive investment in another beer brand may become a big challenge for the Boston Beer Company in the field of competition with other firms that decided to address the trend of helthy products and non-alcoholic drinks.
Another challenge to the company’s development is its strong ties with the domestic market of the USA. As it was claimed by Cole et al. (2021), “ the mass brewers are much more established in the global beer export market, which is expected to grow at a faster rate than domestic beer sales” (p. 3). In the Boston Beer Company case, the firm is strongly tied with the domestic market and has very weak penetration of the international field. Although the company purchased start-ups and other firms, it should establish itself in the global arena.
Growth Strategies for Boston Beer Company
There are different strategies suggested for Boston Beer to pursue growth. Some scholars emphasize the need to enter global markets, integrate more with beer distributors, and enter new industries, for instance, by producing canned craft cocktails to address new trends (Cole et al., 2021). However, other scholars, such as Lindvall (2019), suggest the Boston Beer Company “establish its image as an innovative brewery on all fronts” (p. 3). From this point of view, the increased variety of experimental receipts used in beer production will make the number of the Boston Beer choices available on shelves hard to ignore. Thus, the recognition of the company’s brands will also be increased, making it easier for Boston Beer to enter new markets.
Conclusion
In conclusion, it is necessary to state that Boston Beer is a strong company established in 1984 in the USA and has close ties with the domestic market. The Boston Beer Company’s leadership is based on the wise strategy and the upper management, including the president and CEO of the company, who introduced new brands and implemented profitable projects. Although the company has a substantial competitive advantage in the Samuel Adams brand and the economic value for customers through high-quality beer, Boston Beer lacks recognition in the global market and response to current trends. Thus, the international market’s entrance and promotion as an innovative company were recommended as leading strategies for Boston Beer.
References
Calo, A., Summers, A., Broughton, E., & Stout, J. (2021). Strategic Assessment of Boston Beer Company, Inc. and Strategic Recommendations for Sustainable Competitive Advantage. Web.
Lindvall, J. (2019). A strategic audit of Boston Beer. Honors Theses, University of Nebraska-Lincoln. 138. Web.
The Boston Beer Company: Poised for growth. (n.d.). Course Hero. Web.