Question

Using the case study in the Crafting and Executing Strategy: The Quest for Competitive Advantage 21st Edition book.

- What is competition like in the craft beer industry? Which of the five competitive forces is strongest? Which is weakest? What competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants? - What key factors may determine the success of a start-up craft brewery?

Answer 1

In todays world there are large number of suppliers in craft beer industry. So they are facing tough competition in this industry.

Five competative forces

1) Supplier bargaining power

2) New suppliers into the market

3) Rivalry among suppliers which leads to tough competation

4) Buyer bargaining power

5) Other firms trying to enter the industry

Out of the following the strongest is the supplier bargaining power as they offer beers in large variety to gain the loyality and market from the customers.

The weakest is the bargaining power of the owner where they are offered as the consumers should prices the beers at the supplier selling cost where there is no choice for them if they are asked to pay high prices.

If there is a company which is having large number of loyal customers than it has no threat from new entrants because there customers will not loose due to these new entrants.