1. Boston Beer Company, INC
Nicole Gassett
Alex Pagliuca
Steve Burke
Brian Pereira
Rob Leaver

2. Background of Samuel Adams
Samuel Adams Beer Company was started by Jim Koch. He was the son of a fifth generation beer brewer.
This company is headquartered in Boston, Massachusetts.
They manufacture 17 unique, award-winning beer brews.

3. Financial Highlights 2006 Revenues- 2005 Revenues- 2004 Revenue-
$315,250 $263, $239,680
Increase % Increase- 9.8%
2006 Net Income Net Income Net Income-
$18,192 $15,559 $12,502
Increase- 16.9% Increase- 24.4%
2006 Barrels Sold Barrels Sold Barrels Sold-
Increase -18.2% Increase-7.6%
100% of Net Revenue 100% of Net Revenue 100% of Net Revenue

4. Competitor Comparison
Samuel Adams Anheuser-Busch
ROA – 11.8 % ROA – 12%
Net Profit Margin – 5.8% Net Profit Margin – 10%
Current Ratio – 295% Current Ratio – 81.5 %
Current Assets-120,562/Current Liab.-40,870 Current Assets /Current Liab
Debt-to-Assets – 29.7% Debt-to-Assets – 75.3%
Total Assets Turnover % Total Assets Turnover – 109.7%

5. 1st Recommendation
Problem: year olds consider Samuel Adams to be their “Father’s Beer”.
Purchasing new creations such as Fat Tire and Magic Hat or imported beer
Resolution: Creating a new label for the younger age demographic (21-27)

6. 2nd Recommendation
Problem: Samuel Adams is considered a smaller company and does not have the same leverage as their larger competitors.
Resolution: Samuel Adams would be an excellent acquisition for a larger company.
Craft brewing is a growing section of the industry.
Experienced and innovative brewers who would provide value to another company

7. Friendly Acquisition Who Should Acquire Samuel Adams?
-Miller Brewing Company
-Miller is owned by SAB Miller which has breweries or brewing interests in over 60 Countries Across six Continents and is one of the worlds leading brewers
-Relationship already existent from non-owned breweries
-More Market Share
-Better to do this before another company like Anheuser-Busch or a larger import beer company

8. Downsides
-SAB Miller produces many import beers that are already in Better Beer Category (Pilsner Urquell, Peroni Nastro)- They would almost be competing with themselves
-Samuel Adams is liked by many for having a small company feel
-Great current management that is growing the brand

9. Porter’s 5 Analysis Threat of New Entrants
Very easy for market entry
Competition from smaller up and coming businesses
Hard for new entrants to differentiate their product
Bargaining Power of Suppliers
Very dependent on suppliers
High switching costs when moving to a new supplier
Ensuring quality standards are met

10. Porter’s 5 Analysis (Cont.)
Bargaining Power of Buyers
Large store buyers are the businesses with the bargaining power.
Buyers do not understand the quality of the beverage.
Threat of Substitute Products
Substitute products could entail wine and hard liquor
Soft drinks or water could also be a substitute
Intensity of Rivalry Among Competitors
Largest indirect competitor is Anheuser-Busch
Small micro-breweries to large international companies can be competitors.

11. P.E.S.T.D.C. Analysis Political/Legal Economic/Environment Social
Technology

12. Value Chain Analysis Primary Activities
Inbound Logistics- Beer is brewed in either the company’s owned or non-owned Breweries, with certain Breweries set up for certain functions
Outbound Logistics- No internal distribution/Use third party to distribute product
Marketing/Sales-Lot of focus on quality marketing as well trained sales force to sell product

13. Value Chain Analysis Support Activities
Procurement-Choose high quality ingredients to ensure higher quality end result. Heavy reliance on this process.
Technological-Their brewery based out of Boston is set up specifically for creating new products
-$2.3 million put into Cincinnati Brewery to help improve efficiency and try to produce 40-50% of total volume at this brewery
Infrastructure-Very strong management with a good understanding for competition and staying on top of industry

14. Resources Tangible: Intangible: Financial Human Resources Physical
Organizational
Technological
Intangible:
Human Resources
Reputational Resources
Innovation Resources

15. Core Competencies
Innovation
Sales
Marketing

16. S.W.O.T Analysis Strengths Product innovation Marketing ability
Craft brewers have had continuous growth over the past three years
Tight control of independent brewers
Awards for product quality
Weaknesses
Leveraging ability—size
Larger company could acquire
Reliance on non-owned breweries
Dependent on distributors
Dependence on suppliers
Opportunities
Growing industry for specialized beers which is 18% of consumption
Global markets in Canada, Europe, Caribbean, and Pacific Rim Islands
Increase market share
Purchase suppliers to protect their interests
Threats
Could become appealing for an acquisition
Highly competitive market

17. Current Strategies Extreme Beer
Competition with sherry, cognac, and port.
Samuel Adams & Chef David Burke join forces.

18. Timeline
1970—Jim Koch created his first brew and started selling it door to door.
1984—Koch decided to start making a “better beer”. Only competition was from imported beer.
1985—Samuel Adams Boston Lager made its “official debut.
1988—Increased market share and sales were at 36,000 barrels a year. Built first brewery in Boston.
1995—Continued to introduce new flavors without losing the quality of the beer.
Today—They have 17 different beer flavors and sold across the country as well as in 20 countries.