I – Company Situation
Making Beer in one of the heaviest consuming country can sometimes be more difficult than it seems. Mountain Man Brewing Company is an old middle-sized brewery of the Centre-East region of the United States that produces a very well known beer, the Mountain Man Lager. Appreciated for its bitterness and its strong taste, it appears that the famous beverage cannot help the company to face a downward shift in revenue: 2 % less for the new exercise, and a decrease of the consumption of Popular Beer when the Light Beer consumption is massively increasing. Something has to be done to keep the company alive and sustainable, but finding a solution is not always as easy as it seems: could the company afford a new line of product? Could it use the strong image of the Mountain Man Beer to launch a Light Beer? This is what we are going to study in this report, before concluding with the best outcome and strategy possible.
II – Possible expansion routes
Light Beer—is a big and fast growing segment that consists of customers of younger ages. It represents in the East-Central region almost half of the beer consumed in year 2005. Mountain Man’s current excess production capacity could be adopted to produce a light beer with a successful expansion, indeed it could increase sales significantly and, furthermore, extend the brand image as a Professional Light Beer Brewer. However, considering the fact that Mountain Man is only superior in producing Lager Beer, it is very risky to expand into a segment with uncertainty in product’s quality.
Premium Dark Beer— takes around 20% of market share in the East-Central region. This segment is declining, in contrary of the booming light beer. However, as an established segment, Dark Beer’s market share will have to be maintained at a certain level. Successful expansion could switch over the declining sales in the short term, but the potential growth of Premium Dark Beer is limited. Dark beer shares many...