Competitive Strategies and Government Policies
Competition and policy changes are something that every company likely has to face in their existence. Finding the balance between staying profitable while constantly adapting to the changing economic and customer driven demand environment will be the key to the expansion of the craft brew business.
New Companies and Mergers
The idea of new competition is the boost to get the current company to step their game up. DogHead Fish Brewery is successful and growing steadily. The rapid emergence of nano-breweries has redefined the standards of craft beer. Good just doesn’t cut it anymore. It has to be bold, smoky, spicy, “hoppy,” citrusy, sour, fruity, one-of-a kind and more. If you just want to drink good beer, you are in for a treat. Are these many breweries sustainable in the long run? The research has shown that craft breweries are growing in record numbers. The market is ripe for it. The consumer base is also expanded beyond the college student to the beer drinking connoisseur. In recent years, craft brewers have sounded an alarm over the clout of Anheuser-Busch Inbev and MillerCoors, who today control 90 percent of the beer market. Craft brewers hold just 6 percent, but the market share is growing (Hieronymus, 2010). "Their preferred business model is an oligopoly," says Koch of the company that was once interwoven with his family. "I don't see them as trying to deliberately set out to destroy us. But we are very potentially the collateral damage." Oligopolies are small groups of firms that control a particular market. DogFish Head Brewery fits this description perfectly. Though many microbreweries are operating successfully, they are still only 6 percent of the market. They do however have the power in this specialty arena (Hieronymus, 2010).
Mergers are a means of staying viable in business for some