The company has built its brand as a “beer that is discovered” rather than using traditional beer marketing strategies. Creemore Springs must not alienate its existing customers with aggressive, off message marketing while growing its customer base and thus sales to justify the expense of the expansion Recommendations: Creemore Springs must expand. While a capital investment of this magnitude does constitute a risk for a comparatively small business, the risks that not expanding represent are greater. Thompson himself stated the case for growth when he identified the challenges faced with capping production, including stock-outs, being unable to supply existing customers who open another bar, and challenges reversing a cap without further brand damage. Creemore risks damaging existing customer relationships and being unable to fulfill demand from fully engaged partners if capacity is not increased.
“Alcoholic beverage sales account for more than 22 percent of profits in most foodservice establishments.” (Schmid, 2004) This also depends on the type of alcohol that the business sells. What might be a high seller at the Italian restaurant up the street will not be what you find at the bar around the corner. Different places cater to different people so before ordering the alcohol than the establishment has to figure out what the customers want so there is not an overstock of something that is not going to be sold. Wine is an alcohol that one would want to buy if they were in a restaurant or the high priced bars. But the local bar would not benefit from having a selection for wine.
* Threats * Moving to a new product line could hurt the core brand. The new product could cannibalize the Lager and/or act as a substitute. Economies of scale of the large national brands allow them to advertise and market light beers to the younger demographic. 4. What are the decision options?
And after Beringer changed its name, it went through the IPO also doing pretty good in the American Wine Business. After that, this company faced the diversification issue on its product. Their diversification challenge is to build a company across tow major price points: mass-market premium and ultra premium. It is not easy to perform well on both the $5-$10 range and $20-$40 range. So when the Australian company called Foster’s which is the largest wine company in Australia offered them a great deal to buy Beringer Wine Estates for $1.5 billion, the Beringer accepted the deal.
Threats encumber an organization from realizing its objectives. The main risk facing Bolthouse Farm is the fierce competition from other local juice stores. With the increasing advent of bars, people prefer these smoothies, which are customized according to their preference. The impact poses a significant threat to Bolthouse farms since their smoothies are standardized. In 2011, bars/cafes grew by 4% in terms of current value to reach sales of 4.7 billion dollars of which 15% is revenue from smoothies sold in Canada bars.
These retailers will then sell the wines to its retailers. b. Global Business Environment The global wine industry is extremely competitive. In mature industries such as the global wine industry, rivalry intensifies naturally. The barriers to enter this market are decreasing as many producers can simply buy grapes, of which there has been a 15 to 20
Fewer companies are willing to enter the market because of the SOX requirements that make going public too costly. Plus, the maintenance required to stay public is too expensive for smaller companies, forcing companies to look elsewhere to raise capital. Rising costs persuade large numbers of companies to exit the public markets to sidestep SEC regulation, creates two problems. First, the overall economy could suffer because corporations limit investment projects due to the higher-cost sources of capital to fund potentially new operations. Second, financially stressed companies that go dark are the very companies’ shareholders need to monitor usually and where transparency is most important.
Off-the-shelf software is cheaper than developing custom software. Conversely, due to Boeing’s massive scope and size, outsourcing certain elements would be inefficient. Outsourcing payroll or sales force management with 158,000 employees in 70 countries would be an extremely difficult, let alone expensive, task. Processes like payroll and sales force management often require much human interaction in order to work properly, so outsourcing these elements could create major roadblocks for employees and employers alike. On the other hand, why would Boeing develop in-house some of the software applications used in conjunction with its products?
The weakness of Kudler Fine Foods is that an IPO (Initial Public Offering) has many inherent and potential weaknesses that must be examined prior to selection as a means for expansion. An IPO is the first sale of stock by a company. There are many advantages and disadvantages for the Kudler Fine Foods to go public through the IPO. The advantages include generating more capital needed to expand their three locations The IPOs are very expensive undertaking, and a large portion of any capital acquired will be lost to this cost. Because the company must produce all financial information to the SEC many businesses find it to be very stressful and time consuming which takes time and money away from a company that is thriving like Kudler Fine Foods.
For the cinema market building something which can seat enough people with the right equipment (e.g. huge high definition screen with state of the art projectors) can be hard to create, due to high set up costs. Furthermore there is more to do, for example gain the rights to shoe new films, which can be very expensive unless you benefit from economies of scale. A natural barrier to entry is the exploitation of economies of scale, where the big firms in the business, in this case Vue, Cineworld and Odeon are using their economies of scale to deter any new entrant away. The top three firms have a relationship and power to obtain the viewing rights to screen 2”first-run” films and to do so at a lower price.