Weakness For Redhook As Anheuser Busch example essay topic

Introduction The distribution alliance Redhook formed with Anheuser-Bush in 1994 was to run for 20 years, but could be terminated after 10 years under certain conditions. Under the alliance, A.B. invested in Redhook and gained a 25% stake in the company's equity, and made its nationwide networks of 700 wholesale distributors. Redhook retained full control over production and marketing. Distributors who participated in the alliance were to be given exclusive distributing rights in their territories.

Redhook believed they could gain acceptance and much greater exposure with this alliance with Anheuser-Bush, but the alliance was viewed controversial be many. Strengths and Weaknesses Regarding strengths and weakness, we found that one of Redhook's weaknesses was that management wanted to make it too big in the craft beer industry too fast. For instance, once Redhook started making a profit they replaced the first brewery with a larger capacity with state of the art equipment. Redhook also has a problem regarding the structure of the industry and the quality of the company's management team. Another weakness for Redhook was the age group that was buying their craft beer.

One of Redhook's strengths was that they had an agreement with one of the biggest beer distributor Anheuser-Busch to distribute their product. However, one could probably turn that into a weakness for Redhook as Anheuser-Busch may not promote Redhook's product as well as their own. The table below shows the strengths and weaknesses of Redhook. Strengths Major source of revenue and profit Craft Beer Market share of the company 4.7%Strong company brands Blonde ale Marketing and advertising effective Yes. Articulate plans in place Major focus of the company Production to produce high quality beer Skilled workers Trained, educated and prepared Stock price track record Varies.

Down now Technology efficient Company has embraced technology Company proactive about change Yes. Company proven change can work International trade Company goal is to compete in the international marketWeaknessesCompetitiveness Intensified competition Major Brand Unknown brand name High cost structure Price cutting for craft and specialty beers, wine and imports Beer industry offensive attack to reach dominant position Industry Saturation Market saturation Merger Opportunity and Weakness Merged with Busch Maturity of beer market induced lower pricesOpportunitiesSome of the opportunities for Redhook, was their involvement in the community, the major beer distributor promoting the product and the visitor tours. Redhook faced the threat of Anheuser-Busch taken over due to them being such a major distributor. Also, the other Craft beer distributor stayed within their territory, therefore having their community support. Opportunities Customer Need Unfulfilled customer need and awareness Technology Arrival of new processing technology Distribution Regional national distribution Profit Exporting to Foreign nations Growth Development of new markets Introduction of new productsThreatsChanges in external environment Competition Increase trade barriers Sales decline Shift in customer product use Shift in customer taste Substitute products Emergence of new products New regulations Highly regulated by government Core CompetenciesRedhook's main core competency is that they obviously brew premium, high quality craft beer. They have a good grasp on what they want to accomplish in the beer industry, we are not sure if they have the ability to do so with so many competitors in such a small market.

We also think the Redhook home page is a nice touch. Anyone remotely interested in Redhook can find out anything they want to know about any of their products, brewery tours, or Redhook sponsored concerts on the home page. Customers can even take classes on brewing through Redhook University. We think this is a very innovative and refreshing idea. Core Competencies Distinctiveness Refused to pasteurize - reduced shelf life Taste Used highest quality ingredients Marketing Tactics Purchased state of art brewing equipment Emphasized quality Distribution Strategy Distribution is perhaps the most difficult and frustrating issue facing the specialty beer segment. In a highly regulated three their system, access to market has grown exponentially more difficult for small brewers in just the last decade.

Consolidation within the distribution tier has created far fewer and much larger wholesalers to choose from. It is imperative that the microbrewer's know and understand the second tier of the business to ensure their products are adequately marketed and handled. Marketing StrategiesRedhook's marketing strategy is concentrated on distribution and not on media advertisement. Which means no TV commercials. They focused their resources on distributor training, retailer education and support, and hope the spread of word-of-mouth creates awareness through various consumer promotions. Redhook coached its distributors and worked with distributor salespeople to get greater attention for Redhook during their sales calls, and with the cooperation of the distributors, Redhook offered incentives for the salespeople to develop new accounts.

Redhook also offered several other educational and promotional programs, such as: Distributor Tours, Community Gatherings, Marketing On-Site, Price Discounting, Company Owned Pubs, and Brewery Tours. Marketing Plan Distribution Tours Community Gatherings Marketing on Site Price Discounting Company owned Pubs Visitor Tours Homepage provided classes on brewing Open office of collegiality and collaboration part of office culture Human Resources: Objectives Production of high quality craft beer Control of production in company owned business Operation of regional brewing facilities Production economics through technologically advanced equipment Strategic distribution alliance with Anheuser-Busch Promotion of production within local marketsGoalsContinued market development and penetration in East Addressing short fall of growth in West Growth in International MarketConclusionAlthough Anheuser-Busch governs the brewery industry top management also sought to dominate the craft beer market. Their endeavors were rewarded when Red Hook beer sold company stock to Busch. This mutual agreement was beneficial to Red Hook because it offered opportunities for them to serve a larger customer base, increased their distribution suppliers and provided additional brewery locations. Anheuser-Busch attacked the evolution of microbreweries with "gusto" therefore, forever shaping the revolution of craft beer makers..