Craft Beer Industry Analysis – Port City Brewing Company

Craft Beer Industry Analysis – Port City Brewing Company

The General Environment and Industry Environment in the Craft Beer Market

The craft beer market has increased rapidly over the past decade because of the rise in the global demand for craft beer. Craft brewing companies such as Port City Brewing Company have responded to changes in demand by increasing production and differentiating themselves from competitors to acquire a large market share. According to Butcher (2016), Port City Brewing Company has been increasing its production by 40% yearly to meet customer demand and increase profitability. One of the main impacts of increased craft beer production by different companies is the increase in substitutes, which forces companies in the craft beer industry to focus on quality to attract and retain customers.

The Set of Factors that Have a Direct Influence on a Firm and its Competitive Actions

Companies select competitive actions and responses based on Porter’s five competitive forces in their industry. According to Hill et al. (2017), Porter’s five forces enable organizations to identify the threats and opportunities that impact their competitiveness. The main factors that directly impact a firm and its competitive responses and actions include the intensity of rivalry among competing firms and the power of buyers and suppliers. Competition in the craft beer brewing industry, especially in the United States, is intense due to the increased volume of beer produced and the number of craft breweries (Craig, 2020). Craft beer brewers respond to the competition by increasing the quality of their beer, which leads to increased power of suppliers because they influence the quality of the raw materials used to produce the beer. The stiff competition in the industry also increases the power of buyers because they have many options.

The Growth Stage I Believe the Craft Brew Industry is in

According to Hill et al. (2017), the main business growth stages include the embryonic, growth, shakeout, mature, and decline stages. The embryonic stage is the first stage in a business’ growth. The craft beer industry is currently in the growth stage because it has maintained rapid customer demand and sales growth over the past decade. However, companies in the industry must continue inventing new products and using modern technology to increase production to maintain the industry’s continuous growth.

References

Butcher, B. (2016). Famous For DC: Port City Brewing Company. YouTube. Retrieved October 30, 2023, from https://www.youtube.com/watch?v=2KFxCIe_bdU.

Craig, C. A. (2020). Managing a craft brewery: Competitive, legal, and environmental forces. Entrepreneurship Education and Pedagogy, 4(3), 492–499. https://doi.org/10.1177/2515127420969961

Hill, C. W., Schilling, M. A., & Jones, G. (2017). Strategic management: Theory & cases: An integrated approach. Cengage Learning Asia Pte Ltd.

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For your discussion question this week, I would like you to review the following video that talks about Port City Brewing and its early success in the Craft Brewing Industry.

Watch Video
Famous For DC: Port City Brewing Company
Duration: 2:53
User: famousdc – Added: 9/9/16
After reviewing the video, please answer the following:
Describe the general environment and industry environment in the craft beer market.
Discuss the set of factors that have a direct influence on a firm and its competitive actions and responses, including the power of suppliers, the power of buyers, and the intensity of rivalry among competing firms.
What growth stage do you believe the craft brew industry is in, and why?
Make sure you conduct additional research when answering these questions. A lot of information about Port City Brewing is available on the internet.