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Samuel Adams Beer Company

Samuel Adams Beer Company. Chris Clark Michele Hulbert. Background of Samuel Adams. Samuel Adams Beer Company was started by Jim Koch. He was the son of a fifth generation beer brewer. This company is headquartered in Boston, Massachusetts.

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Samuel Adams Beer Company

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  1. Samuel Adams Beer Company Chris Clark Michele Hulbert

  2. Backgroundof Samuel Adams • Samuel Adams Beer Company was started by Jim Koch. He was the son of a fifth generation beer brewer. • This company is headquartered in Boston, Massachusetts. • They manufacture 17 unique, award-winning beer brews.

  3. Financial Highlights 2006 Revenues- 2005 Revenues- 2004 Revenue- $315,250 $263,255 $239,680 Increase - 19.7% Increase- 9.8% 2006 Net Income- 2005 Net Income- 2004 Net Income- $18,192 $15,559 $12,502 Increase- 16.9% Increase- 24.4% 2006 Barrels Sold- 2005 Barrels Sold- 2004 Barrels Sold- 1612 1364 1267 Increase -18.2% Increase-7.6% 100% of Net Revenue 100% of Net Revenue 100% of Net Revenue

  4. Competitor Comparison Samuel AdamsAnheuser-Busch ROA – 11.8 % ROA – 12% Net Profit Margin – 5.8% Net Profit Margin – 10% Current Ratio – 295% Current Ratio – 81.5 % Current Assets-120,562/Current Liab.-40,870 Current Assets-1829.5/Current Liab.-2246.1 Debt-to-Assets – 29.7% Debt-to-Assets – 75.3% Total Assets Turnover - 204.1% Total Assets Turnover – 109.7%

  5. 1st Recommendation • Problem: 21-27 year olds consider Samuel Adams to be their “Father’s Beer”. • Purchasing new creations such as Fat Tire and Magic Hat or imported beer • Resolution: Creating a new label for the younger age demographic (21-27)

  6. 2nd Recommendation • Problem: Samuel Adams is considered a smaller company and does not have the same leverage as their larger competitors. • Resolution: Samuel Adams would be an excellent acquisition for a larger company. • Craft brewing is a growing section of the industry. • Experienced and innovative brewers who would provide value to another company

  7. Friendly Acquisition Who Should Acquire Samuel Adams? -Miller Brewing Company -Miller is owned by SAB Miller which has breweries or brewing interests in over 60 Countries Across six Continents and is one of the worlds leading brewers -Relationship already existent from non-owned breweries -More Market Share -Better to do this before another company like Anheuser-Busch or a larger import beer company

  8. Downsides -SAB Miller produces many import beers that are already in Better Beer Category (Pilsner Urquell, Peroni Nastro)- They would almost be competing with themselves -Samuel Adams is liked by many for having a small company feel -Great current management that is growing the brand

  9. Porter’s 5 Analysis • Threat of New Entrants • Very easy for market entry • Competition from smaller up and coming businesses • Hard for new entrants to differentiate their product • Bargaining Power of Suppliers • Very dependent on suppliers • High switching costs when moving to a new supplier • Ensuring quality standards are met

  10. Porter’s 5 Analysis (Cont.) • Bargaining Power of Buyers • Large store buyers are the businesses with the bargaining power. • Buyers do not understand the quality of the beverage. • Threat of Substitute Products • Substitute products could entail wine and hard liquor • Soft drinks or water could also be a substitute • Intensity of Rivalry Among Competitors • Largest indirect competitor is Anheuser-Busch • Small micro-breweries to large international companies can be competitors.

  11. P.E.S.T.E.L. Analysis • Political/Legal • Economic/Environment • Social • Technology

  12. Value Chain Analysis • Primary Activities Inbound Logistics- Beer is brewed in either the company’s owned or non-owned Breweries, with certain Breweries set up for certain functions Outbound Logistics- No internal distribution/Use third party to distribute product Marketing/Sales-Lot of focus on quality marketing as well trained sales force to sell product

  13. Value Chain Analysis • Support Activities Procurement-Choose high quality ingredients to ensure higher quality end result. Heavy reliance on this process. Technological-Their brewery based out of Boston is set up specifically for creating new products -$2.3 million put into Cincinnati Brewery to help improve efficiency and try to produce 40-50% of total volume at this brewery Infrastructure-Very strong management with a good understanding for competition and staying on top of industry

  14. Resources • Tangible Financial Physical Organizational Technological • Intangible Human Resources Reputational Resources Innovation Resources

  15. Core Competencies • Innovation • Sales • Marketing

  16. S.W.O.T Analysis

  17. Current Strategies • Extreme Beer • Beer is competitive with sherry, cognac, and port. • Samuel Adams & Chef David Burke join forces.

  18. Timeline • 1970—Jim Koch created his first brew and started selling it door to door. • 1984—Koch decided to start making a “better beer”. Only competition was from imported beer. • 1985—Samuel Adams Boston Lager made its “official debut. • 1988—Increased market share and sales were at 36,000 barrels a year. Built first brewery in Boston. • 1995—Continued to introduce new flavors without losing the quality of the beer. • Today—They have 17 different beer flavors and sold across the country as well as in 20 countries.

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