The case study Boston Beer Co. Inc. evaluates whether the craft brewing industry is overcapitalized. Is it another "hot", but then "crash" IPO industry such as biotech or the PC disk drive industry?
Amy P. Hutton, Christopher Charron
Harvard Business School (XLS029-XLS-ENG)
Apr 14, 1996 (Revision: Jun 2, 2000)
Case questions answered:
- Define the Problem of Boston Beer Co: Describe the type of case and what problem(s) or issue(s) should be the focus for your analysis.
- List any outside concepts that can be applied: Write down any principles, frameworks, or theories that can be applied to this case.
- List relevant qualitative data: evidence related to or based on the quality or character of something.
- List relevant quantitative data: evidence related to or based on the amount or number of something.
- Describe the results of your analysis: What evidence have you accumulated that supports one interpretation over another.
- Describe alternative actions: List and prioritize possible recommendations or actions that come out of your analysis.
- Describe your preferred action plan: Write a clear statement of what you would recommend to Boston Beer Co. including short, medium, and long-term steps to be carried out.
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Case answers for Boston Beer Co.: Light Beer Decision
1. Define the Problem of Boston Beer Co
The Boston Beer Company’s (BBC) line of light beer called Boston Lightship is not selling well. In taste tests, their beer performs extremely well, but their sales have been declining to the current low of less than 0.3% of production (Exhibit 2). The problem is what to do with the Lightship product.
2. Applicable Concepts
Much market research has been completed, including taste tests, customer surveys, and ZMET. There is an emotional tie to the light beer drinking experience. Since more than half of beer purchases occur in a group setting, bars, and restaurants, social factors such as reference groups, family, and friends will influence the purchase decision. (Kotler p. 159) A detailed SWOT analysis (Kotler p. 49) of this research for Boston Beer Co would allow the company to assess the attributes of the product from the buyer’s perspective.
Since there is detailed demographic and psychographic research available, the company can apply the 5 Stage Model of the Consumer Buying Process (Kotler p. 173) and evaluate at which stage the product is disregarded: Problem recognition, Information search, Evaluation of alternative, Purchase decision or Postpurchase behavior.
3. Qualitative Data About Boston Beer Company
- Blind taste showed Lightship received more favorable reviews on its taste compared to other light beers (Amstel, Coors, Budweiser).
- Lightship had little to no brand awareness with…