Beer

“These people want to hurt you. It”s frightening. You feel like you”re in a cage out there”. Reggie Smith, (Berger, 1990). Spectator violence at sporting events has been recorded throughout history. People who have power over the events, often team owners, indirectly influence the amount of spectator violence by encouraging the factors contributing to violence, in order to benefit themselves. Sale of alcohol, encouraging crowd intensity, creating rivalries, and targeting social groups, are factors affecting the degree of spectator violence and can be proven to be influenced by the owner”s actions.

Therefore the blame for spectator violence can be attributed to whoever has power over the sport. Many historians suggest that an increase in spectator violence coincides with the commercialization of sports. Anthropologists agree that in societies where games were not for profit, they were enjoyed as celebrations of physical skill without competitiveness or violence between players or spectators (Berger, 1990). However, when people gained power or financially from the sporting events, spectator violence increased (Berger, 1990).

Public spectacles and games were part of the Roman Empire. Each emperor had an amphitheater and the size of the crowd reflected the emperor”s wealth or power. The emperor through crowd excitement could influence spectator violence to such an extent that gladiators could be killed or freed depending on the crowd”s effect on the emperor (Robinson, 1998). The emperor encouraged the Roman working class, “to forget their own suffering, by seeing others suffer,” while the senators, and emperor would benefit financially from gambling profits (Robinson, 1998).

With the commercialization of sports, owners” profits increased with alcohol sales. Beer drinking has been an integral part of sports since the late 1870″s. Chris van der Alie noticed that his saloon did well when St. Louis Brown Stockings were in town. As a result, he decided to sell beer at the games. On February 12, 1880, Alie signed a contract with the Browns allowing him to sell alcohol on their property (Johnson, 1988). During a game on July 6, 1881, the first alcohol related brawl broke out in the crowd, injuring twenty spectators and killing two (Johnson, 1998).

The signed contract with the Browns” was a financial bonus for the owner, however permitting alcohol to be sold, might have indirectly contributed to the injuries and deaths. Alcohol sales contribute financial support to teams. “Without beer companies as sponsors, the teams would have trouble making ends meet. ” Bob Whitsitt, president of Seattle Supersonics, (Berger, 1990). The more alcohol consumed, the more revenue for the owners. During the 1987-1988 season the Cincinnati Reds sold 12,610 half-barrels and 35,365 cases of beer.

The amount of beer consumed averages out to a pint for every man, woman, and child who attended the 81 games the team played at home (Johnson, 1988). The team”s owner benefited with a financial profit of over 1 million dollars. Sponsorship or ownership of teams by alcohol manufacturers, increases the alcohol sales. The first major partnership of beer and baseball dates from the 1953 purchase of the Cardinals by August A. Busch, Jr. , president of the Anheuser-Busch brewery (Johnson, 1988). In twenty-five years its” sales soared from fewer than 6 million barrels a year to more than 35 million (Johnson, 1988).

In addition to direct profit, alcohol also indirectly increases profit through increased attendance. In 1974, when the Cleveland Indians” fan attendance was down, the owner implemented “Beer Night” where they sold beers for 10 cents at the first game of a three game series against the Texas Rangers (Berger, 1990). Attendance was up by 3500. The night turned out to be the first and last “Beer Night”. When a brawl occurred during the 5th inning, hundreds of Indian fans charged the field and beat up the Texas Ranger players. Seventy-six people were arrested. All were intoxicated (Berger, 1990).

There”s no question that the beer played a great part in the affair” (GM Eddie Robinson). Eddie Robinson did not apologize for the incident, and it took Lee MacPhail, president of American League to intervene and ban the beer nights (Johnson, 1988). The rowdy behavior contributed by alcohol consumption often accompanies the throwing of beverage containers.

Cups, bottles, and cans act as stimuli and provide a throwing opportunity. In 1988, Pete Rose of Cincinnati Reds was pelted with full cups of beer and whiskey bottles, when he stormed out of the dugout to dispute a call. It was insane, many of the fans were throwing unopened beer cans” Pete Rose, (Johnson, 1988). To restrain spectator violence, many agree with not selling alcohol at sporting events. “The selling of alcohol at sporting events should be banned” (Johnson, 1988). Other solutions have been implemented, such as limiting drinking to designated areas, selling low alcohol beer, and making it more difficult to buy. The solution of prohibiting alcohol at games was never implemented (Johnson, 1988) Alcohol sales increase revenue; profits keep the owners satisfied.

The owners to increase entertainment and increase attendance often promote other stimulants such as music, hearing obscenities, and aggressive play in the event or in the stands. Since sports are a source of entertainment, loud music and aggressive play in the event pump up the crowds, increasing the fans” enthusiasm. Hearing obscenities can be contagious and escalate into more swearing, name calling and fighting. An obscene cheer starts with two fans, increases to eight and soon a whole section is vibrating to the pulse.

If fans take exception to the obscenities individual fights break out building into group fights, as friends come to assist. Owners are often able to control the crowd”s involvement in the game with the type of music they play and how loud they control the volume (Robinson, 1998). An excited, participatory crowd heightens the atmosphere and increases future ticket sales, benefiting the owner. However, the same atmosphere can increase hostility leading to fan violence. Basketball games attract anywhere from twenty to thirty thousand fans, whereas a gymnastic competition may attract a few hundred (Robinson, 1998).

This is party due to the loud, exciting atmosphere at a basketball game. Goldstein did a study comparing crowd hostility before and after a basketball game to before and after a gymnastic competition. He proved that the hostility increased considerably for the basketball fans, and also discovered that hostility occurred no matter if the fan was rooting for the winning or the losing team (Robinson, 1998). Large sport events like basketball often use music to increase the crowd”s hostility and competitive awareness of the game. Owners often don”t realize at what point hostility turns to fan violence.

This may have been the situation for Dan Goodenow, organizer of the 1988 Martin Luther King Classic basketball tournament where 5 fans were arrested, a man’s face slashed, and a police officer injured during a riot (Atyeo, 1979). Coaches and game officials blamed the rap group Public Enemy, who played before the game shouting obscenities, carrying plastic guns, and working up the crowd to an extent of raucous excitement (Chapman, 1988). Owners or school leaders help create team rivalry by encouraging fans, through city or school patriotism, to support their team.

With media support, owners use historical team rivalry, competitive stories, propaganda and team loyalty to promote high-ticket sales and increase profits. Excessive promotion of rivalry changes crowd cheers to jeers that can lead to violence. The most common rivalries are school rivalries. Starting as far back as 1899 the students of Colorado School of Mines and those of Colorado College would celebrate victory by using dynamite to blow up the rival”s goal posts (Taylor, 1992). During one game the presidents of the universities promoted the final game, as “The top college in Colorado will win” (Taylor, 1992).

By game time, most students from both schools were there to cheer their teams on. When Colorado College was down their fans, frustrated by the score and the name-calling, stormed the field at half time where a riot broke out. When rivalry was claimed to be a factor it was no longer promoted, and violence diminished (Taylor, 1992). A similar example of rivalry leading to hostility occurred in the 1999 Red Feather game Banting vs. Westminster. To encourage attendance and raise money for charities both schools had pep rallies to pump up the students by using music, videos and chants.

During half time the two schools emerged towards the center of the field taunting each other. The organizers of the rallies intent on boosting ticket sales inadvertently encouraged spectator violence. There is an increase in violence following sporting events promoting rivalry as compared to regular promotion, as seen in professional boxing following a highly talked about match. The promoters in boxing do everything they can to make sure the matches turn out violent to satisfy the crowd. David C. Phillips a sociologist studied the rate of homicides following highly publicized heavyweight championship fights.

The survey was done the 3 weeks following each of 18 highly publicized bouts from 1973-1978 compared to those bouts with normal publicity (Davidson, 1983). Phillips found that there were 193 more murders, in the surrounding areas, after the promoted fights as compared to the norms (Davidson, 1983). After the highly promoted Muhammad Ali vs. Joe Frazier fight on October 1, 1975, the murder rate shot up thirty-two percent (Davidson, 1983). Phillips theory is “people see how violence is prized in the boxing ring and come to believe that violence outside the ring will also be rewarded” (Davidson, 1983).

The rewards however, are the financial rewards to the owners, through increased ticket sales and media advertising. Spectator violence may be parallel to violence in the society. For example in a violent society, play will be violent, whereas in a peaceful society play will be more peaceful. The make up of the social group contributes to the possibility of violence. Spectators can be divided into different social classes and the event advertised in areas where a particular social group is targeted for ticket sales.

Often working class males are targeted, as their values and attitudes of aggressiveness, fearlessness and toughness are well suited to competitive sports (Bonney & Giulianotti, 1994). They are likely to be the fans that are betting on the game or are there for the thrills (Berger, 1990). These fans are more likely to attend contact sporting events such as rugby and to be violent, compared to the upper class fans who analyze the game are more likely to attend a cricket match. In the sport soccer, hooligans who dominate the crowds are mainly males who generally act in rough, noisy behavior (Taylor, 1992).

They have lawless fun, fighting spectators, throwing objects and vandalizing property. Most hooligans are from the working class. They have low ambitions, violent behavior and high stress levels (Bonney & Giulianotti, 1994). They act out their frustrations, like the Roman working class, by attending sporting events where they loose their individualities. Fans in Glasgow, Scotland, trampled sixty-six persons to death when they tried to return to the stadium they had just left upon hearing that a last-minute goal had been scored. Berger, 1982).

“Hooliganism gives the organization of a team motivation with their traditional cheers and it builds the atmosphere which builds a team” Lesie Davis, management of Peru”s soccer organization (Taylor, 1992). Major soccer teams target this low-income social class because it brings atmosphere to the game and alcohol sales and profits increase (Shumacher, 1975). In marketing ticket sales for most team sports, owners target males nineteen to forty-five.

Sixty three percent of males and twenty percent of females in that age range are involved with sports whether they participate in them, or follow them (Oliver, 1971). Team owners often exclusively target males, resulting in an increase of ticket sales and merchandise. However, when males are bonded they often act violently emphasizing their masculinity, machismo, bravery and fighting skills (Tiger, 1970). Many teams in the American Baseball League in the 1970″s were having problems concerning fan violence, and found the main instigators were males.

They changed the games to Sunday, traditionally a family day and encouraged female fans by admitting them free. With women and family present the men were less likely to loose their individuality and act violently as a group. The results for the next 5 years were positive as fan violence decreased by 30 percent (Berger, 1990). By studying the occurrences, degrees, and causes of fan violence over history, owners are able to decrease the incidents of fan violence while maintaining profits and entertainment value of their organization.

Slowly but effectively owners, teams, coaches and professional leagues are creating solutions to minimize fan violence. The American Baseball League, National Baseball League and the National Basketball Association participate in TEAM (Techniques for Effective Alcohol Management), which is a program for training everyone from vendors to ushers in handling people who have had too much to drink (Berger, 1982). Many of the NFL teams have moved their tailgate parties outside the stadium to eliminate the hostility caused by loud rock bands on the premises (Berger. 1990).

Security cameras have been installed in many of the soccer stadiums and transportation centers to games, spotting the fans that cause the violence, and acting as deterrents for others. Controlled drinking areas, entrance controlled security checks, and increased visible security personnel are measures, which have helped to reduce fan violence in all sports. Most important, the owners need to be aware that some of their actions to benefit their organization have an indirect influence on the factors for fan violence. Sport is a basic feature of Australian culture. The achievements of Australian athletes have enhanced our image as a nation.

Participation in sporting activities contributes to the health of millions of Australians; the teamwork and fair play which Australians learn on the playing field provide the basis for a good society. But Australian sport is not without shortcomings. Whilst sporting violence, on the part of both participants and spectators, is less frequent and less severe in Australia than in many overseas locations, it remains grounds for concern. Violence on the playing field sets a bad example for impressionable young Australians. Unruly crowd behaviour can spoil a pleasant family outing.

One of the main components of the beverage industry is Alcoholic drink; an example of a company that produces alcoholic beverages, namely Beer and Lager is Asia Pacific Breweries. Listed on the Singapore Exchange, Asia Pacific Breweries Limited (APBL) is one of the key players in the beer industry Asia Pacific Breweries, formerly known as Malayan Breweries Limited (MBL) in 1931 is a joint enterprise between Heineken International & Fraser and Neave. Its present name was given in 1990.

As of today, Asia Pacific Breweries also operates a broad global marketing network, which extends across 60 countries and is supported by 30 breweries in 14 countries, namely Singapore, Cambodia, China, Indonesia, Laos, Malaysia, Mongolia, New Caledonia, New Zealand, Papua New Guinea, Solomon Islands, Sri Lanka, Thailand and Vietnam. Asia Pacific Breweries also offers their consumers a wide range of brands, be it global, regional or local, which suit the taste of various beer drinkers; boasting a wide range of choices, including Tiger Beer, Heineken, Anchor Beer, Baron’s Strong Brew, ABC Extra Stout and Bintang Beer.

Their beers are brewed under the supervision of Heineken technical experts, who can call upon countless years of experience of European brewing excellence. Using only the finest ingredients, maintaining the most stringent brewing standards, and conducting over 200 quality checks during the process. This scrutiny over production of APB beers has reeled in many awards while their breweries are among the forerunners in their respective markets.

Strengths

Tiger beer, the prize brand of APB, was the winner of the UK’s Brewing Industry International Awards, the most esteemed award in the brewing industry 1998. The brand won a Gold medal in the International Style Lager category in the 2010 World Beer Cup; and silver medal in 2010 World Beer Championships. Anchor Beer was presented a gold medal in Selection Mondiale in 2010, a gold medal by Australian International Beer Awards in 1998, on top of several other honors. Since beer sales mostly relied on quality and tang, the higher quality standards of APB beer, makes APB standout in the competitive brewery business.

APB’s Tiger and Heineken brands scores on the point of identity and thus have a strong brand image. A part of one of the few establishments in Singapore, APBL set up the Asia Pacific Breweries Foundation (APB Foundation). This foundation provides financial aid to causes in Creativity Development, achievements in Human Excellence and Humanitarian Awards. APBL plays a significant role in giving back to the communities in which they operate. Being socially responsible, each of them renders support to the various educational, social and environmental causes in the respective countries.

Through its endless efforts towards community and environment protection, APB continues to build a long-term relationship and good rapport with its customers.

Weaknesses

Although the US market is mounting at a slower rate compared to certain Eastern European and Asian markets, lack of presence in this market puts the group at a disadvantage as compared to some of the other great players in the industry. Since large beer consuming countries provide possibility for volume and revenue expansion, a modest presence in these markets results in a drawback for APB. The anticipated sale of APBL’s 50% owned Heineken-APB (China) Pte Ltd to China Resources Snow Breweries Limited would not be going through due to an unreachable agreement with CRSB.

Opportunities

With a rise in disposable income and alcoholic beverages more widely accepted by its people, Asia had its potential as a profitable market. APB operates primarily in Asia Pacific, which grew at a compound annual growth rate of 5%, reaching a figure of $112. 2 billion in 2009. To maximize on their Asian opportunity, APB has ventured into New Caledonia and Indonesia. In FY2010, hey came into possession of Heineken International’s 65. 1% interest in PT Multi Bintang, Indonesia and also Heineken’s 87. 3% interest in Grande Brasserie de Nouvelle Caledonie, New Caledonia. The group also received beer brand Bintang and its trademarks rights. The acquisition allowed APB to launch their other popular beer brands easier as it gave them a firm consumer base in Indonesia and New Caledonia. APB is extending its brand portfolio by adding more flavors and varieties. They acquired Bintang and Number One, from Indonesia and New Caledonia in FY2010. The group also introduced some other new brands in the same year.

Laos has its local beer Namkhong; New Zealand was introduced Monteith’s Crushed Pear Cider while Tiger Crystal was presented to Vietnam and, as a limited edition, to Malaysia. APB attracts consumers of distinct tastes by presenting new brands every now and then.

Threats

Beers belongs to one of the highly taxed commodities globally; especially high in the countries APB operates in. Per liter of beer was imposed an excise duty of S$70 in Singapore, the single largest market of APB. New Zealand also increased excise duty. This caused DB Breweries, the New Zealand division of APB to increase its prices by 3%. Higher prices are a result of higher excise rates. APB, known for being a cheaper option of premium brands, may lose its current consumers if excise rates continue to rise and cause APB to set a higher price for its beer brands. Alcohol companies have received criticism on their advertisements and thus, countries set a legal ban on spirits advertisements on TV and radio; on broadcast advertisements which associate alcohol with children or leisure, or promoting alcohol abuse; as well as on sponsorship of TV and radio programs by companies mainly concerned about alcohol production.

These rules would hinder APB’s development, as its awareness in the consumers would decrease. Beer has been linked with negative health issues. Among people, there is a general negative perception about beer having an effect on the body fat and cholesterol. On the other hand, wine is considered a healthier option to other beverages. In matured markets like Western Europe and North America, beer is losing its field to wine, as there is an increase in consumers’ preferences for healthier alternatives. Wide variety of alcohol products available readily and extensive advertising is also bringing a negative impact to beer sales.

Key customer groups Business to Customers APBL has large consumer base due to its wide variety. Tiger beer, among all the brands is the most famous international brand with largest number of consumers. Tiger Beer targeted the vibrant young Asian adults; Tiger also launched Tiger Crystal Lite, a softer-flavored Tiger Beer to cater consumers especially the Chinese who prefer lighter taste. Likewise, Heineken and Gold Crown targets young Asian adults in Thailand, New Zealand, Vietnam, China, Singapore, and Malaysia.

Anchor, which offers consumers with international, affordable quality brew, is more successful in Hainan, Cambodia and Vietnam. Everyday drinkers in Singapore and Malaysia are appealed to Anchor while Cambodians and Singaporeans in their 30s-40s are appealed to stouts including Guinness, Extra Stout and Amber Stout. Baron’s Strong Brew had European as its loyal customer base appealing those who favor strong alcohol taste. Business to Business The company has a strong market share in various countries within the Asia Pacific Region.

It also boasts that in the UK, Tiger Beer can be found in more than 8,000 premium bars, clubs and distribution outlets in major cities. APBL’s products can be found in almost any shop that sells alcoholic beverages in the countries it has expanded to. Competitors Asia Pacific Breweries’ faces many competitors in the industry, namely in Breweries, beverage manufacturing, alcoholic beverage manufacturing, bars and nightclubs and restaurants, bars and food services. APBL’s local and overseas competitors include Carlsberg A/S, whose company perates in Europe and Asia. Asahi Breweries, Ltd, Suntory Group and Kirin Holding Company, Ltd, which primarily operates in Japan. SABMiller, which primarily operates in Americas, Africa, Asia and Europe. The Philippines-based company: San Miguel Corporation and China Resources Enterprise Limited based in Hong Kong. Kirin Brewery Company, Limited is engaged in producing alcoholic beverages, soft drinks, food products and pharmaceuticals through its subsidiaries. SABMiller is engaged in producing and distributing beer, malts and carbonated soft drinks.

Likewise, Suntory Group primarily operates in the non-alcoholic and alcoholic beverages, food products and the food services business segments. Carlsberg, a renowned competitor, is also engaged not only in the production, marketing and sales of beer, but also produces soft drinks, energy drinks and bottled water. San Miguel Corporation, yet another renowned competitor, also engages in the production of beverages and is involved in other business segments such as food and packaging products, power generation and distribution, mining, fuel and oil, infrastructure, telecommunications, management and development of real estate properties.

Existing Operations of Company

Entry modes used for expansion Joint Ventures Asia pacific breweries preferred mode of entry is Joint Ventures. For example, in Singapore, Asian Pacific Breweries started out in Singapore as a Joint Venture between Heineken International and Fraser and Neave in 1931 and was known as Malayan Breweries Limited. Asia pacific breweries also used joint venture in Cambodia, China, Laos, Malaysia, Mongolia, Thailand, Vietnam, Indonesia and New Zealand. In Cambodia, Asian Pacific Breweries formed a joint venture with Progress Import and Export, which formed Cambodia Brewery Ltd.

In China, Asian Pacific Brewery formed a 50-50 joint venture with its shareholders, Fraser and Neave, Limited and Heineken in China known as Heineken-APB (China). APBL also engaged in a joint venture with Laos: Asian Pacific Breweries opened a brewery in Laos through a joint venture with the Government of Laos and SBK Consultant Ltd. Malaysia’s Guinness Anchor Bhd was a result of the merger of Guinness Malaysia Bhd and Malayan Sdn Bhd whose parent company is the current Asian Pacific Brewery. In Mongolia, Asian Pacific has formed a 55-45 joint venture with MCS Holdings LLC.

APBL also entered Thailand, Vietnam, Indonesia and New Zealand via Joint Venture. In Thailand, Asian Pacific Breweries entered Thailand, to form a joint venture with Thai Life Insurance Company Limited and Thai Pure Drinks Company Limited. Similarly, In Vietnam, Vietnam Brewery Ltd. , (VBL) was formed by a joint venture between Saigon Trading Group (SATRA) & APBL. Finally, In Indonesia, APB participates in the Indonesian beer market via PT Multi Bintang Indonesia Tbk (MBI). Acquisitions In 1955, APB entered Papua New Guinea by acquiring a stake in the brewery, which has been the sole beer brewer in Papua New Guinea since 1983.

Further expanding their foothold in the South Pacific, APB entered the beer market of Solomon Islands with a majority stake in Solomon Breweries Limited (SBL). Merger In New Caledonia, APB entered the beer market of New Caledonia via Grande Brasserie de Nouvelle Caledonia (GBNC). GBNC was formed in 1974 as a result of a merger of two breweries in the territory of New Caledonia. Partnership In Sri Lanka, APBL formed a partnership with Sri Lankan-based Anandappa family group and associates and MBL Offshore Limited, a wholly owned subsidiary of Phoenix Beverages Limited, which is a leading beverage group from Mauritius, to form APB Lanka.

Please refer to Appendix A for APB’s shareholdings in the various countries. Types of operating issues or problems encountered. Operational issues: When expanding into foreign countries, the scale of investment and exports increases. Large amount of capital is needed for venturing into new markets, resulting in the company having fewer budgets to channelize into other new markets or other development areas like R&D. Additionally; customers in different market have different standards, forcing APBL to consistently adapt the flavor to suit to local’s tongue.

The unexpected fluctuating exchange rate incurred loss as seen when “APB suffered a paper loss of S$37. 9m & S$14. 5m in 2008 & 2009 respectively. ” APBL experiences currency risks due to contractual cash flow invoice in another currency. There is potential currency mismatch in investing countries like Vietnam and Mongolia. For example, APBL invests in USD but revenue generated comes in VND. High agricultural products price resulting from natural disasters also happens in overseas production subsidiary would increase cost of beer production.

There might be political and economic regulatory uncertainties in investing market that delay the business operation or high entry barrier in some country as government restrict foreign investment scale or the sales of beer. Economic problems: Due to increase in prices of agricultural products such as wheat and barley, this increases the cost of beer production as well. APBL had to absorb this increase in cost of production, which will be bound to induce negative effects such as an increase in selling prices of beer to offset the higher cost of production.

This might lead to potential loss of customers. Also, the value of the firm may be affected by unanticipated and volatile changes in the exchange rates on home currency. For example, the depreciation of Tugrik led to an exchange loss of $ 5. 9M. Political problems: When venturing into Mongolia, there were various benefits and risks encountered by APBL. Some political risks encountered were that the political system lacks transparency and corruption level is high.

When venturing into Indochina, there was similarly a high level of corruption in the government coupled with a high tax regime of 45% which decreases the profit margin of APBL due to the higher expenses incurred from the high tax regime. Legal problems: Asia Pacific Breweries’ financial manager, Chia Teck Leng is currently serving 42 years in prison as a result of swindling S$117 million from a Scandinavian bank, two Japanese banks, and a German bank across a period of four years to make up for his gambling addiction.

This is reflected as the lengthiest jail term given for the biggest case in commercial fraud in Singapore to date. Chia was charged with using underhand means to extort foreign banks of about S$117 million, criminal breach of trust of S$53 million, money laundering, and encouraging his girlfriend Li Jin to use a forged passport. He was imprisoned on 2 April 2004 after pleading guilty to 14 charges.

Future Expansion Plan

Selected countries and reasons for expansion Reasons for venturing into Spain The Spanish culture is known for drinking a lot of beer. If APB ventures into Spain, it can be assured of a big market to introduce its products to. But despite the presence of many other beer companies in Spain, APB is a cheaper alternative compared to other beers, which will thus attract many consumers. Furthermore, it is known that good beer is a sign of a good restaurant. If APB can satisfy its customers’ standard of ‘good beer’, it can definitely boost the reputation of restaurants that cater APB to its customers. In addition, foreign beers are very rampant in Spain. This shows that the Spanish would welcome foreign beers.

Thus, this ensures that APB products will have higher chances of being accepted by the Spanish. Barcelona is also known to be a ‘Drinker’s Paradise’. However, there have been negative feedbacks about the type of beers offered in Barcelona bars, which does not complement the drinking environment in Barcelona. Hence, if APB products can satisfy the Spanish, this will up the profit that bars make from selling beers, which will in turn benefit APB in the long run. From 2009 to 2012, the economy of Spain met with a downturn, and almost a quarter of Spain’s workforce was unemployed.

APB can now make use of the unemployed as labor for APB in Spain. Reasons for venturing into Australia The wine industry has expanded rapidly but Australians will always be known as beer drinkers, even rivaling the likes of Germans. Therefore, if APB ventures into Australia it will also have a large market of consumers to introduce its products to. Coupled with the fact that APB is a cheaper beer alternative, there is a high chance that many consumers will turn to APB to satisfy their demands. There are also various Beer Festivals held in Australia on a regular basis.

Such Beer Festivals include ‘The 7th Annual Australian Beer Festival’ which attracted a large crowd of over 10000 people with 24 Australian brewers and over 100 Aussie beers present during the festival. Such Beer Festivals are definitely a good avenue to increase the reputation of APB at a large and quick scale if APB were to venture into Australia. In addition to Beer Festivals, there is also the presence of beer competition such as the ‘Australian International Beer Awards’. This is yet another platform for breweries to showcase their premium beer and brewing excellence.

All these platforms reflects the Australian’s interest in beer drinking and thus this is definitely a good reason for APB to venture into the Australian market and grab its own customer loyalties and build its reputation in Australia. More importantly, the economy of Australia is one of the most developed, modern market economies in the world. In 2011, the Australian economy was the fastest growing advanced economy in the world, with a GDP of approximately US$1. 6 trillion. This means that the Australians are earning more than the worldwide average.

The IMF in April 2012 predicted that Australia would be the best performing economy in the world over the next two years. With such a boosting economy in Australia, APB should venture into Australia. Australia has also entered into many FTAs with ASEAN countries and Australia is also a member of various international organizations such as APEC and WTO. This puts Australia in a very good position to make foreign trading with other countries, granted support from these organizations.

Identification of sub-factors used for expansion political-legal factors

• Sub-factors used: Country risk ranking, political stability ranking, legal regulatory ranking, corruption index and political transparency index and ease of doing business ranking. Political and legal forces greatly impact the success of a company expanding into a foreign environment. It comprises of three main pillars. They are government regulation; laws that restrict the amount of trade freedom a foreign company has in a host country. The Government bureaucracy provides the foreign company with the legal license to conduct business activity in the country and political stability.
• Economic factors Sub-factors used: GDP growth rate, GDP Growth Projection, Purchasing power parity, Per Capita Income, Inflation rate, Exchange rate stability and presence of competitors. Economic factors refer to whether the country is favorable in terms of its economy. It is a significant factor considered when expanding, as economic factors will greatly affect the success of the company in that country.
• Social Cultural factors Sub-factors used: Education level, Language, Religion, Income, Age and Ethnic distribution and attitude towards time. The social culture in every country is different. The language, attitudes towards business, religious beliefs, traditions, and customs varies greatly from country to country. Managers must be aware of the differing cultures and specific taste of each country and tailor their products to suit their individual cultures. By doing so, it raises the level of competiveness and demand for that product in that market.
• Geographical factors Sub-factors used: Accessibility to raw materials, agricultural products available, natural hazards, climate, percentage unemployed in labor force, minimum gross annual wage rate, land area, lease period of land, cost of land & terrain. Geographic features in every country heavily influence the rate and pace at which a foreign company can expand in the host country. Surface features such as navigable rivers and flat plains aids travel and contact with others, hence accelerating the productivity of the company. However, countries with topographical features like treacherous mountain ranges, deserts and large bodies of water may discourage communication. This affects consumers’ product needs and wants, hence requiring managers to be extra particular about their preference. Technological factors

Sub-factors used: Availability of Digital Network Infrastructure, Internet penetration rate, Presence of legal framework for intellectual property and presence of e-banking structure. Technological advancement varies extensively throughout the world. Most firms would expand into a new market only if there is demand for its product or if the technology and infrastructure there can support its existing production operations. A country with the latest technology and infrastructure would mean lower costs for the company that is intending to enter into that market.

. Recommendation, reasons and type of entry mode to use for Australia. Recommendation We chose to enter the Australian market with either a company currently existing in Australia or a company that hasn’t expanded into any other countries, and have similar goals as Asia Pacific Brewery. We have chosen to go with Coopers Brewery Limited, the largest Australian-owned brewery or the largest home brewing equipment producer in the world. Reasons By venturing into Australia with Coopers Brewery Limited, the chances of reducing cost and risk would be higher as compared to attempting to enter the market alone or with external companies.

This would be due to the fact that Coopers Brewery Limited has an established name and hence, this allows them to share their experiences with APB, reducing the trouble of setting up their own subsidiary, ultimately reducing the chances of consumer doubt. Therefore, smaller amount of investment is required to put APB’s business into operation. APB need not waste valuable time to set up its own subsidiary or look for ways to enter the Australian market, which it has low international experience or little cultural knowledge of. Knowledge wise, APB would have an advantage when going into joint venture with Coopers

Brewery Limited because they possess information and first-hand experience about the local market demand and they know what “works” in order to satisfy their consumer’s standards and preferences. In terms of production capacity, APB would be able to increase its product and sales volume as there might be sharing of staff and production facilities between both brewery companies. They can also share the cost of marketing and advertising their brewery products. APB can now afford to sell its product at cheaper price, thus increasing its competitiveness in the brewery industry within short period of time.

Type of Entry Mode to use We chose to enter the Australian market via Joint Venture with Coopers Brewery Limited. Coopers Brewery Limited was established in 1862, by Thomas Cooper at his home in the Adelaide suburb of Norwood, South Australia. Being the utmost powerful beer company in South-Australia, Coopers Brewery Limited would have the largest amount of market shares hence we would be able to penetrate the markets and promote APB’s branding to Australia, as the consumer-producer’s trust is already established.

APB can build good relations with its new retailers and customers since its joint venture partner already has a reputable brand image, thus this adds on to APB’s credibility without much effort required. Therefore, APB would be able to distribute its product more efficiently through the availability of existing market channels that Coopers Brewery Limited has. 6. 4 Reasons for not selecting Spain. By comparing both countries, and weighing the factors used for expansion, we have unanimously concluded that Spain is not as favorable as compared to Australia.

In terms of Political-Legal factors, Spain’s country risk ranking is lower than Australia, which indicates political instability that is unfavorable when setting up a business. Furthermore, Spain’s ranking when it comes to ease of doing business is ranked 44 in the world, a significant inferiority compared to Australia which ranks 15. Economically wise, Spain’s GDP Growth rate is relatively smaller compared to Australia’s. In terms of Per Capita Income, Spain’s is much lower compared to Australia, which might play a role as to unsatisfactory sales.

Furthermore, by comparing 5-year statistics, the exchange rate stability also fluctuates more than Australia, therefore being less stable. By looking at the Social Cultural factors, Spain is less favorable than Australia because of its lower literacy rate and minor percentage of English speaking individuals, Moreover, the Age Distribution in Australia is better than Spain because despite the exact same percentage of people aged 15-64, the youth’s population in Australia is greater than Spain.

This means that in the future, Spain’s percentage of 15-64 would be less compared to Australia. This age groups consists of the majority of working individuals, hence, a smaller figure would be deemed as having an adverse effect to the company. Technological Factors also indicates that Spain isn’t on par with Australia. International Businesses rely heavily on technology for communication. If APBL wants to expand to a country, it would be an advantage if the country’s penetration rate were higher.

By comparison from the table above, it is evident that the Internet Users (per 100) in Australia far exceeds Spain’s, which would mean that there are more computer literate individuals in Australia as compared to Spain, which would pave the way for more employment opportunities. Geographically speaking, Spain’s land area is comparatively smaller than Australia. In order to establish a major brewery, a vast land area is required and Australia has more land than Spain, which means that it would be more economical as land isn’t as scarce.

The comparison also shows that Spain has lesser Airports, Seaports and a shorter length of road network, which reflects that the accessibility in Spain is inferior to Australia’s.

Conclusion

Our consultant team has found that Australia would be the more promising country for Asia Pacific Breweries’ expansion plans. This is conclusive of our results, which were based on a thorough assessment of thirty-six diverse sub-factors, which are instrumental in successful business expansions. Australia was found to be more favorable in twenty-six out of the thirty-six factors.

Australia boasts a relatively slight political risk and has low corruption in the country, which provides a conducive and secure environment for Asia Pacific Breweries to conduct its operations in. Furthermore, agricultural produce in Australia is suitable for the brewing of quality beer, thus Asia Pacific Breweries does not need to source for additional raw materials, which would otherwise incur a huge cost. Australia also has a comprehensive web of transport infrastructure, which would greatly increase the efficiency of Asia Pacific Breweries operations, hence cutting costs.

The quality of education in Australia is also of a high standard, producing a workforce that is highly literate. A highly educated workforce will not only increase work productivity but also the overall competitiveness and capabilities of Asia Pacific Breweries in Australia. The Australian economy shows no sign of slowing down as GDP growth rates are projected to continue increasing through the years. Additionally, the per capita income in Australia is considerably high, which means that the average Australian is comparatively well to do.

As beer is a lifestyle product, a strong, robust economy coupled with a high standard of living will be able to better complement and boost the sales of beer. After taking into consideration the above-mentioned conclusions, the team here at G&T Consultancy would like to offer a recommendation for Asia Pacific Breweries to expand into the Australian market.

 Raid Brewery is an Asian brewery founded in 1933 by Boomerang Shortbread in Thailand which also makes and sells soft drinks. Their best known product is the pale lager Shanghai. Today, the company remains in the hands of the family and is led by third-generation descendant Santa Broom Baked.

Throughout the years, Boon Raid has diversified into an award-winning brewer and beverage maker, exporting its globally recognized products worldwide. The key to success and also be a mission statement is “Transparency! We do the right things. We live as a good citizen and don’t cut corners. ” This principle is one of many that have helped Shanghai obtain the largest market share for beer in Thailand. Domestically, the company sees strong growth in the beer segment dominated by Shanghai. It expects local demand to grow 6 percent next year to 1. Billion liters by inaugurating a new facility in 2009. Aside from Shanghai, Boon Raid sells other beer varieties, soda water, drinking water, ready-to-drink fruit Juices, ready-drink coffee and tea beverages under various rand, such as Thai Beer, Leo, Mish and B-ins, a flavored vitamin functional drink. Although Boon Raid got many awards in “beer capitals” such as Brussels, Osaka, America, Australia and New Zealand but in the word of president “you have to dare to challenge the outside world” which makes them still not to stop expanding their market and find new opportunities over time.

Consequently, we decide to analyze and evaluate them for the purpose of getting insight in their international management plans, their competitive advantages, and their human resource management. Besides, this study is also included with Mounties analysis, industry analysis, and international market too. For the courses to action, we begin Witt SOOT analysis to n Raid including wit providing the company background. Then we do the countries analysis such as GAP, population size, inflation and business environment in those countries.

Next, we also find the information that can be fit to Boon Raid products by studying from primary and secondary sources and do PEST analysis. Lastly, we would examine the marketing strategies of Boon Raid such as how they trained their employees, how they developed their products, how they could make and retained the international customer relationship in order to penetrate those international markets and find the best way that can make them success in long-term future. Corporate Backgrounder industry or industries is the firm operating the company’s introductions Raid Brewery Co. Ltd. s the largest and the oldest brewery in Thailand. It was established in 1933 by Boomerang Shortbread, on whom HEM King Apparatchik Ram VIII bestowed the aristocratic title of Phrase Broom Baked. In that time Thailand was called “Siam” until 1939 it was changed to Thailand. Nowadays the brewery is still under the Broom Baked family management. At first the company produced and sold only beers like Shanghai, Leo and Thai beer, which Shanghai is the most famous and popular beer. Later when the company had grown to produce over 800 million liters of beer they started to producing soft drinks as well.

They are producing drinking water, soda water, ready-to-drink Juice, ready-to- drink green tea, B-ins “lifestyle functional drink” and some other soft drinks also. So The Boon Raid Brewery specialized to Brewery and soft drinks industry. Today they have over 2000 employees in nine factories across the Thailand. They produce annually over one billion liters of beer and much more other drinks. Who are the customers? Latently and segment target customers Company has a versatile range of goods and that’s one of the reasons to succeed. They sell necessary product like simply drinking water and everybody has to drink water to stay alive.

Beer is also popular among adult and young adult nations and they have both quality and cheap beers so they can reach most of the customer, who drinks beer. Juice and that kind of soft drinks are for everybody as well, but especially children and teens like to drink Juice a lot. Green tea and coffee are more for adults. So they can sell products to huge part of the population. Where does the company serve? Define company’s geographic scope company primarily operates in Thailand, where it is headquartered in Bangkok. Network of The Boon Raid Brewery Co. Includes three breweries and six soft drinks factories all over the Thailand.

Other factories located in strategic regions across The Thailand, in Chainman, Shaken, Ginsburg, Attitude, Path Than and Sugar Than. The Boon Raid Brewery Co. Ltd. Owns two breweries in German. The first one located n the town of Mitigated, that brew Mitigated beer and the second one brews Gerard Harmonist beer in the town to Gerard Harmonist. Nowadays their products are exported to over 25 countries around the world. The largest export country is neighbor country Cambodia; followed markets are in United State, United Kingdom, Singapore, Malaysia and Japan.

In addition they sell their product to China, Philippine, Laos and Vietnam. Sometimes they sell product to some other neighbor countries as well, but sales are sporadic. What needs are being satisfied by the company’s goods or services? Define the Meany’s core products/servicewomen Raid brewery has regained its market leader of beer in Thailand. Shanghai beer is the leading product of the Boon Raid Brewery Co. Shanghai beer has been Thailand most popular beer for many years. Leo is also famous beer brand, but they have another strategy with Leo, when Shanghai beer is high quality, good and nice beer, Leo is cheap and less quality beer.

The company sells Thai beer as well, and lot of different soft drinks, like ready-to-drink Juices, ready-to-drink green tea, drinking water, soft water and something like that. What are the company’s distinctive competencies? What resources does the company have? What capabilities does the company possess? As previously was mentioned, Boon Raid Brewery has 2000 employees in 9 factories in various parts of Thailand. This eases the distribution in the country internally, but it also facilitates the company to respond to the already widespread demand throughout the world.

If the demand will grow even further, it is necessary to add resources so that supply will keep up with demand. Boon Raid Brewery has a ready customer base and especially Shanghai has been received positive welcome also widely outside of Thailand. Thus, if the company desires to internationalist to the wider world, it is a smaller problem, because it is already well underway and the groundwork for potential follow-up measures have already been made. Boon Raid Brewery provides and offers different kind of products to different kind of customers and their needs.

As previously mentioned, the Boon Raid Brewery has a wide range, which includes various drinks from beers to Juices and from energy drinks to soda water. This kind of range, which has planned with widely thinking, provides a more stable support for the company’s activities. So, if the company’s mom of their individual product’s sales might drop surprisingly, the company is not so vulnerable. Which generic strategy in currently used by the company? Based on the value-chain multidisciplinary, Boon Raid Brewery invests to the visibility of company and making products more familiar among consumers.

The company also makes its share of supporting important societal issues. It invests to sport, culture and environmental. It has brought to use A Waste Water Management System, which is designed to minimize the environmental impact on the Chaos Phrase River. N Raid Brewery NAS its own doctorates in Thailand and in addition, it currently wins 2 other factories in Europe. The company is expanding slowly but with certainty around the world. So far, customers are widely from different parts of the world, so it seems to be only a matter of time before the company decides to buy or set up new factories in other countries.

The fact that the company has won several awards over the years in relation to the quality of beer, says that the company invests a lot of resources in the actual beer making process. Country analysis and attractiveness sentimentalism PEST multiplications: Brazilian citizens are free to relocate throughout the country. In addition, all citizens are free to engage in any business activity, as long it is a legitimate activity. It’s a positive policy for us to take a share of Brazilian market. Citizens or non-citizen, are allow owning private properties in Brazilian territory.

Governmental offices issue a title of property, which guaranty one’s ownership of a real, personal, or intellectual property. The process of issuing a property title can be somewhat time consuming; however, when the process is due, the owner is protected by laws, and enforced by Judicial system. In addition, some Southern cities had successfully settle negotiations over public land in order to help low income citizens to own a private property. This kind of law and political environment can ensure the safety for our intelligent property of beverage and ownership for brewery and all the assets we owned.

Brazil has no yet achieved institutional stability. Government, courts, school, business, and specially law enforcement are struggling to bring solid bases of stability for Brazil. Fernando Henries Cards, former president, did a good Job in recognizing the state’s responsibility for the injustices during dictatorship. On the there hand, violations of human rights still an issue in Brazil, Inflation seems under control for now, but Brazilian had experienced inflation as high as 5,000 percent a year, during late ass’s. Most recently, the revocation of rules, and addition of new provisions are still happening in Brazil.

Therefore, skepticism is among Brazilian, and international observers.  The banking system in Brazil has been improving over the past few years; however, more than 50% of the Brazilian population has no means to ever get a bank loan, neither open a bank account. The first problem is that millions of Brazilian have low income. The second problem lies on the credit bureau, which has a deficiency on tracking one’s credit history. Most Brazilian prefer to use the direct financing system, in other words, a store finances one’s purchase, breaking it in small monthly payments, and charging very high interests.

If the individual do not pay his or her bills, then the store can confiscate the product, and report his or her name to the credit bureau.Brazilian legislators are tar trot calling themselves detective in work . Brazilian economy still has non-satisfactory fluctuation, more than 40% of the population lives n total poverty, infant mortality is high, transportation and educational system have big issues to be solved, and crime and corruption are a huge problem. After Fernando Henries Cards, former president, first year in office, several denounces came about some Brazilian legislators being involved in scheme and corruption scandals.

Such news did not surprise most Brazilian, except for the fact that someone had the courage to speak out. 6. Brazilian government has a long history of resisting the increase of minimum wages. Its main reasons are:  if minimum wages increase the Brazilian government ill not have enough money to pay for all the social security pensions, and governmental employees;  factory companies say that if minimum wages are increased it would be catastrophic for the companies growth, since their budget for wages and benefits will increase tremendously.

In addition, companies claim that if the minimum wages are increase some companies will be force to file for bankruptcy with leads to lay-offs, and increase of national unemployment rates. Our company should be much careful about this.  Brazil has some of the most strict environment protection laws in the world; such saws are design to protect citizens, the fauna, and flora of Brazilian territory. Despite of the governmental efforts, the process of reinforcing such laws has not been successful; part of it is due to the inefficiency of some governmental agencies.

For example, the Institute Brasseries do Memo Ambient e dos Reoccurs Naturals Renovates (OBAMA) is an the governmental agency responsible for the formulation, coordination, execution, and reinforcement of environmental laws. 8. Any country must protect and promote national enterprises; however, Brazilian government is being over protective. It causes an unbalance cycle of dependency among Brazilian enterprises, which have more to lose because free market would promote competition, and consequently it promotes the development of new technology and money flow.

Brazilian government has a long history of being over protective toward its national enterprises. The means in which the government uses as protection strategies vary and it changes time to time. For example, Brazil has an extended list of shipping requirements for imported goods; these requirements cause a difficult time to foreign enterprise, and the process of shipping a nightmare. In addition, the import taxes are high, restrictions on foreign-produce advertising is a strict, and complex bureaucratic process–all make foreign enterprises less capable to compete with Brazilian enterprises in Brazilian territory.

Brazilian government requires that all business transactions be made in Brazilian currency (reels), and all foreign currencies must be converted before any business transactions.  Brazilian government requires that only one currency be use inside the country, and the Brazilian currency is called the “real”. However, many businesses will accept alular or Euro as form of payment for good or services. Many Brazilian will save the foreign bills as form of investment because they believe that such currencies will rise in value, and if they not, at least it will not devalue as reels would.

In addition, some fortunate business people prefer to be paid in dollar because it, later, will be transported outside the country.  Brazilian government has been consistently causing a budget deficit in its domestic budget. In other words, the Brazilian government has been spending more than it collects from taxes each year. 4. Many Brazilian citizens dream with the idea of opening their own business; however, due to high taxation, and labor benefits Brazilian are skeptical about the risks of opening a small or median enterprise.

Nerveless, Brazilian citizens welcome new business enterprises because it generates Jobs for the citizens. On the other hand, there is a popular believe that if one opens a business enterprise he or she must dodged taxes. Brazilian often avoid paying taxes, as much and as long as they can, because they not believe in the socialist system. 5. Between the years of 2001 through 2003, Brazil shows minimal signs of limitability to outside forces. Brazier’s foreign trade impact ratio was gradually increasing during the period from 1999 to 2008.

It is likely that Brazil could create more wealth to its citizens by increasing its foreign trade impact. Social:l . Len Brazil, one’s ability to create wealth is filled with barriers, especially for low background citizens. It is important to say that if one’s will is strong, he or she might have a chance to advance economically; however, such dream is not a reality to millions of young Brazilian. First, Brazilian education system does not embrace the minority groups. Ironically, the public universities, free education, are primarily composed of elite youth, and private universities are composed of poor or middle class youth.

Several philanthropic entities focus on helping Brazilian kids to develop some kind of skills, in order to help them to get a Job, but these entities mistakenly forget to encourage and educate kids to pursue an academic life. In general, Brazilian society believes that if one has born poor, he or she will never make a good living. Crime rates in Brazil have been increasing, and many are not reported. This reception frequently can compromise one’s decision of opening a small or media enterprise. Police fails to assure safety for citizens as well for business.

Into the large corporations such fear is reduce due to fact that large companies can afford to pay for an team of security guards. These are what our company should focus and pay a attention to what will hurt our line of business. 3. Protection of public health and safety in Brazil is quite bad, because infant mortality and mall-nutrition are the leading reasons fool r death among children between ages one to five. Mall nutrition still ill s children and adults in Brazil. In addition, the Brazilian government has poor management of waste, and food inspections.

The Brazilian government has a long way to go before infant mortality rate decreases to worldwide standards. Technological:l . Brazilian communication system is good. Cities and countryside are equipped with many means of communications (phone, cell phones, fax, television, radio) with exception of computer. The use of computers as a mean of communication is a process that has been growing in Brazil, but due to the high cost of computer hardware it stills a slow growth. The most popular mass communication is television, and Brazilian love soap opera.

TV networks strategically start the TV news between the hours of the most popular soap opera, seven to eight p. M. In addition, house and cell phones became more affordable for Brazilian since the Brazilian government had privatized its telecommunication corporation. There is a real potential growth for computer in Brazil. It is believe that soon, the Brazilian government will facilitate and lower taxes for import of computers, which will make computers much affordable item to Brazilian. These infrastructures can ensure that our local communication and promotion can be done efficiently and effectively.

Brazilian transportation system is reasonable; it has some good and bad sides. Brazil has roads, rail, air, and ships, but not all works efficiently. Brazil is fortunate because it has south to north regions connected by the Atlantic Ocean. Therefore, the navigation system is good for transporting large volume of goods throughout the Brazilian coast, but it is not good for transporting people due to long Journey. The Brazilian air system excellent, and recently it is becoming more affordable to Brazilian, but still not cheap to many. The railroad system is, with exception of urban rails, in precarious condition.

It requires a great amount of capital investment, mostly for repairs of rails, newer and faster trains, more employees, and newer distribution of rails throughout the country. In similar situation are the roads of Brazil. Highways and interstates are in great need for repair and expansion. Many enterprises have difficulties in transporting goods among states because the highways are very dangerous. Brazilian highways and interstates are filled with dangerous fissures on the road, not enough roads, and damaged bridges. To make things worse, highway pirates are a big problem in Brazil.

Often, the news channel announces the robbery of a loaded truck, and the death of the truck driver. High rates of lost, employees and goods, forces enterprises to reevaluate the company’s expansion due to high costs and risks of transporting goods. This base can help us to which transportation tools we should focus and which we should avoid to use. India PEST multiplications. Slow-down in government decisions due to political instability. Adverse changes or unpredictability on foreign investment, import, ownership, pricing or tax issues. Expected delays and cost-overruns due to overlapping governmental Jurisdictions. Len recent years, successive Indian Governments have sought to improve the performance of these programmers by decentralization their administration, vesting village governments with greater responsibility tort their monitoring and oversight NT. An academic literature hypothesizes that socioeconomic divisions within villages and the weak political strength of the poor reduces the effectiveness of decentralized programmers since, under these conditions, elites are able to ‘capture’ funds intended for the poor.

This paper argues that the effect of administrative decentralization of poverty programmers and local public goods on the magnitude of benefits to the poor depends not Just on their political strength but also on the incentives the non-poor have to improve the welfare of the poor. The design of policy pays insufficient attention to such incentive issues. Empirical analysis provides support for this belief. The regression analysis of the paper reveals that welfare receipts affect the labor supply decisions of the poor and that the implementation of welfare programmers under control of village governments takes these effects into account. Present Euphoria for rapid economic development has created enormous pressure on Indian’s natural resources. Forests are subjected to rapid degradation due to growing demand for forest-based inputs for industrial use. Rivers are becoming dumping grounds for industrial wastes, often with toxic materials. Construction of large dams is displacing millions of people from their age-old roots. The development projects are carried out for the prosperity of the poor and the marginalia; but the latter never get benefited by this. Their notion of development is different.

They share a unique harmonious relationship with nature. Fluctuation in interest, inflation and currency rates. Foreign exchange transactions in India have become more liberalized with the Foreign Exchange Management Act, 1999 (FEM.) which came into operation as of 1st June 2000.  The Reserve Bank of India (central bank of India) describes the basic functions of the Reserve Bank as to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage. Explicit targets for the reduction of the fiscal and revenue deficits as well as the ailing on government borrowing have been removed from the draft. The economy of India is the twelfth largest in the world by market exchange rates and the fourth largest in the world by GAP, measured on purchasing power parity (APP) basis. The country was under socialist-based policies for an entire generation from the sass until the sass. The economy was characterized by extensive regulation, protectionism, and public ownership, leading to pervasive corruption and slow growth.

Since 1991 , continuing economic liberalizing has moved the economy towards a market-based system. According to the India Development Report 2008 the improvement in macroeconomic stability could be due to macroeconomic policies. While the prospects of achieving high growth are good, the prospect of maintaining macroeconomic stability TTY must be rated low. The Indian economy is likely to be susceptible to periodic shocks originating from the global economy such as those related to global financial crises and volatility in crude oil prices.

Poised to become a key participant in the global economy, India is the second fastest-growing economy in the world. Many investors and corporations see enormous potential in India, from the detail potential of a growing middle class population to economic policies that promote financial globalization. Foreign direct investment has been a crucial factor for the record appreciation of the Indian rupee in recent year With the opening up of the Indian economy there has been a considerable statistical enhancement and substantial improvement in the country. Reign exchange reserves, constructive growth in the foreign trade, and rationalization of various tariffs. In addition there has also been a significant liberalizing of Indian investment abroad and relaxation f policies regulating foreign investments in India, increased access to external commercial borrowings by Indian companies and major participation by the foreign institutional investors in the domestic stock markets. Social. Cultural problems, delays or legal disputes due to local partners and suppliers. The crime rate in major cities is falling.

Police force is doing their best to make it till nil. The Central Reserve Police Force is an armed Force of the Union of India, with the basic role of striking reserve to assist the State/Union Territories in Police operations to maintain law and order and contain insurgency. Its role is that of a catalyst in maintaining law & order, and returns to barracks once this objective is achieved. The force is also being used for various police duties in various States. During the year 1999-2000 a total of 374 militants of various outfits were killed and 6981 militants were apprehended by the Force.

Besides above the Force recovered 1299 arms of various type and 51326 rounds of ammunition during this period. The Central Reserve Police Force, established under the Central Reserve Police Force Act of 1949 (66 of 1949), includes some 165,000 personnel organized into 70 battalions, including seven rapid action battalions and two women battalions. The force is lightly armed and deployable throughout the country, serving as a back-up for the State Police should situations get out of control.

Though initially created to respond to riots and civil disorder, rover time the Force has become involved in counter-insurgency operations for they have proven poorly prepared. During the colonial period, it served the interests of the British (and their European cohorts) to exaggerate the democratic character of their own societies while minimizing any socially redeeming features of society in India (and other colonized nations). Social divisions and inequities were a convenient tool in the arsenal of the colonizers.

On the one hand, tremendous tactical gains could be achieved by playing off one community against the other. An the other hand, there were also enormous psychological benefits in creating the impression that India was a land rife with uniquely abhorrent social practices that only an enlightened foreigner could attempt to reform. Indian’s social ills were discussed with a contemptuous cynicism and often with a willful intent to instill a ensue to deep shame and interiorly 5. Standard of living in India is modest and is improving.

For example, rural areas of India exist with very basic (or even non-existent) medical facilities, while cities boast of world class medical establishments. Similarly, the very latest machinery may be used in some construction projects, but many construction workers work without mechanization in most projects. Technological. Local and long distance service provided throughout all regions of the country, with services primarily concentrated in the urban areas; steady improvement is taking place with the recent admission of private and private-public investors. . Recent deregulation and liberalizing of telecommunications laws and policies have prompted rapid growth; local and long distance service provided throughout all regions of the country, with services primarily concentrated in the urban areas; steady improvement is taking place with the recent admission of private and private- public investors, but combined fixed and mobile telephone density remains low at about 30 for each 100 persons nationwide and much lower for persons in rural areas; paid growth in cellular service with modest declines in fixed lines. . India is not a country most foreigners can drive in. The traffic can be chaotic and daunting, with herds of cattle often bringing all movement to a halt. The choice of driver and vehicle is of utmost importance to ensure the success of a tour. The best part is everything is easily locatable and most of the transportation services are available for others now. South Korea PEST multiplications. Real property is protected by the national government to be secure and fully owned when obtained legally.

This protects tizzies’ rights to their property from businesses, government and influential individuals who wish to obtain the property through unrighteous methods. Property is clearly protected through a court backed titling system, overseen by the Korean Property Court system. Regulations on private property are stipulated in the Korean Commercial Code, which form the rules of economic activities. Utilizing the Korean Commercial Code, the domestic courts are able to enforce set rules which guide the nation’s commerce.  Korea maintains a moderately high income disparity among the education levels of errors.

While corporate businesses pay entry level university graduates a comparatively high wage to relatable developed nations, the minimum wage is set very low to US standards. The low minimum wage, therefore, reserves most low-end jobs for students. As an initially unexpected result, most citizens thus aspire to complete university and be corporately employed. As an end result, Korea may in fact hold significant lack of productivity due to wages set to high compared to industry standards. However, the high level of entry level wages allows generous affordability

Introduction

It has been a widespread analogy that when we hear about wine, our minds refer to France as the well-known wine producers. That makes sense since France becomes a leader of wine producers beside Italy, in the world due to historical and cultural factors. In 1996 alone, the country produced more than 1,506 million gallons of wine and two years later, they produced 1,390 millions gallons of wine.

 Meanwhile for another alcohol-based beverage, Beer is often associated with the US although historically United Kingdom (UK) and the US become the homelands that make the drink popular within societies in which in the US alone, the beer industry started approximately in 1840’s with the introduction of larger beer (Goldammer, 2000).

 Nowadays, beer has become a significant part of American culture and thus it makes sense if people associate beer with American drinks.  In addition, according to one report, the U.S. beer industry has provided positive contribution to the country’s economy since it generated more than $144 billion annually; provide direct and indirect jobs for 1.6 million people all over the United States, and involve at least $48 million in annual wages. The industry also contributes $27 billion of tax to state and federal tax revenue in 2003 (‘Beer Economy’, 2003).

Although beer becomes significant part of US economy, the country also faces dilemma since the number of drinking-associated violence also increases significantly. One of supporting factors to the increase in the number of drinker and the associated violence is vast beer promotion that attracts the youth to start drinking at earlier age due to prototype of courageous people that drink beer.

Concerning the marketing beer and its impacts on customers, this paper will elaborate the competitive analysis for InBev, the world’s leading brewer with turnover reached 14.4 billion euro in 2007. The company also holds the number one or number two position in more than 20 key markets in the world. The analysis includes the competitors of InBev, market shares, and the overall competitive analysis of AB in China, North America, and Europe.

U.S. Beer Industry and Competitors of InBev

In the US market today, the beer industry has become a critical economic sector that has tremendous effects for the macro level. It contributes more than $144 billion annually, providing direct and indirect jobs for 1.6 million people all over the United States, involving $48 million in annual wages. The industry also contributes $27 billion of tax to state and federal tax revenue in 2003 (‘Beer Economy’, 2003).

Furthermore, in the US, the beer industry evolves into three basic levels of brewing according to annual production. These levels are the large breweries, regional breweries and microbreweries. The large breweries are those with annual shipments of over 15 million barrels, the regional breweries are those with annual shipments ranging from 15,000 barrels to 15 million barrels and the micro breweries are those with annual shipments of less than 15,000 barrels. The large breweries accounted of approximately 80% of the industry’s shipments, the regional breweries account for approximately 15% of total US shipments and the small or microbreweries account for the rest (Goldammer, 2000).

The attractiveness of beer industry in the U.S. has dragged many producers from all over the world to present in the U.S. market, thus increasing the level of competition. In the U.S. alone, there are over 2,000 independent wholesalers. However, large brewer companies control almost 80% of the total sales holds most of the market shares. This created a highly concentrated business environment where only a small number of players controls price and product standards. The number of dominant players increases when the scope of analysis is changed to be an international analysis of the beer industry. However, U.S. top brewers are also top players in the global beer industry.

Competitive Analysis of Anheuser Busch

Anheuser Busch is currently the world’s largest brewer. The company produces 30 beers and 2 non-alcoholic brands from 12 US breweries. The company grew 3 times the industrial average. In terms of strategic positioning, the company has a unique presence in the business world.

In the United States, Anheuser Busch delivers several brands in order to maintain their position in the U.S. beer market; it includes Beck’s and Stella Artois in addition to multi-country brands and recent innovations that include Labatt Blue Insulated Cans and Labatt Blue Light Insulated Cans. The strong awareness of Anheuser Busch is obvious since the company sold more than 4.0 million hectoliters that further position the company as number 3 based on segment import with market share about 11.5%. You may also be interested in PESTEL Analysis beer industry

Similarly in Canada, with the same brands, Anheuser Busch also maintain their position by delivering multi brands and produce recent innovations that include Labatt Blue ‘Cold One’, which particularly engineered to keep beer crisp, cold and refreshing for longer periods of time. This brand is named to be the best selling Canadian beer that sold in four continents. The market in Canada is far more attractive for Anheuser Busch that is enable to sell about 9.8 million hectoliters, which position the company as number 1 in the Canadian market (post-Lakeport acquisition) with market share about 42.7%.

Meanwhile in China, Anheuser Busch also presents several brands in order to maintain their position in the China beer market; it includes Beck’s in addition to multi-country brands and recent innovations that include the popular Brahma. In the China market, the company sold about 33.4 million hectoliters of beer in 2007, which position the company as number 3 in the market with 11.4% of marker share.

Concerning the strategic management, generally, a company is required to discover a single business activity where it can pursue to provide ultimate customers value within it. For Anheuser Busch, the business activity was manufacturing and selling beer. However, the company is also recognized for being the largest recycler of aluminum can, and actively gaining profit from other business endeavors, like transportation and communication. These ‘side-segments’ has contributed considerably in the growth of the company. The five segments are as follows:

1. Domestic Beer. This is the main business of the company. As mentioned previously, Anheuser Busch has a powerful strategic position within this segment. It controlled 48.8% share of the US beer market. This segment produces approximately $1.5 billion in net income for the company.
2. International Beer. However, as the domestic market became more mature and lack prospects of future growth, Anheuser Busch explores and develops the beer market outside the US by means of partnership with several foreign breweries, like Group Modelo, Labbat Brewing Co, Ltd and Kirin Brewing Co. International beer is the segment that deals with export sales, overseas beer production and marketing operations. This include company-owned operations, administration of contract and license brewing arrangements and equity investments. Anheuser Busch has two international breweries, one in China and one in the United Kingdom. Today, the Brand Budweiser is produced in 10 foreign countries under the direct supervision of the Anheuser Busch brewmasters (‘Company Information’, 2006).
3. Packaging. This segment consists of the lid manufacturing, label printing, beer crown and closure liner making, glass manufacturing operations and aluminum beverage can manufacturing. It is generally positioned to support the main operations of selling beers, but the packaging segment alone has collected $54.4 million of net income in the year 2000 (‘Company Information’, 2006).
4. Entertainment. The entertainment business of Anheuser Busch consists of SeaWorld, Busch Gardens and other adventure park operations. Busch Entertainment Corporation has nine theme parks throughout the United States. It is recorded as one of the largest US theme park operators with $71 million net income from Busch Gardens (theme park operators), SeaWorld (marine life parks) and other rides and animal attractions (‘Company Information’, 2006).
5. Other segments. The company is also active in other business segments like real estate development, transportation, and communication. These segments contribute approximately 20% of Anheuser Buschs annual gross revenues.

Works Cited

1. Anheuser Busch. (2006). Anheuser Busch AR 2005. Retrieved October 27, 2008 from http://www.anheuser-busch.com/search (2006). Company Information. Retrieved October 27, 2008 from http://www.anheuser-busch.com/search
2. Goldammer, Ted. (2000). The Brewers Handbook. Apex Pub InBev. (2008). InBev is the world’s leading brewer. Retrieved October 27, 2008 from http://www.inbev.com/go/about_inbev.cfm(2008).
3. Market Factsheet. Retrieved October 27, 2008 from http://www.inbev.com/go/about_inbev/market_information_by_country/Market_factsheet.cfm#boxes Reel Beer Media Inc. (2003). Beer economy. Retrieved October 27, 2008 from http://www.realbeer.com/news/articles/news-001894.php

The premium segment focuses on discerning buyers. Producers are engaged in the art of craft brewing. They build their brands around taste and cover higher product costs by charging much higher prices – roughly twice as much for a six pack as the mass-market brewers. The microbrewery and importers have been gaining share and currently account for around 11% of the total market. The increase in concentration among mass-market brewers reflects a number of factors. First, consumption of beer in the United States has been gradually declining even though consumption of premium beer has been increasing.

Per-capita consumption of beer peaked at 34 gallons in 1980, fell too low of 29. 1 gallons in 2003, and crept back up to 30 gallons per capita in 2005. The decline in consumption was partly due to the growing popularity of substitutes, particularly wine and spirits. In 1994, Americans consumed 1. 75 gallons of wine per capita. By 2005, the figure had risen 2. 16 gallons. Consumption of spirits increased from 1. 27 gallons per capita in 1994 to 1. 34 gallons per capita over the same period.

Second, advertising spending has steadily increased, putting smaller mass-market brewers at a distinct disadvantage. In 1975, the industry was spending $0. 18 a case on advertising; by 2002, it was spending $0. 40 a case (these figures are in inflation- adjusted or constant dollars). Smaller mass – market brewers couldn’t afford the expensive national television advertising campaigns required to match the spending of the largest firms in the industry, and they saw their market share shrink as a result.

Third, due to a combination of technological change in canning and striation, and increased advertising expenditures, the size that a mass market brewer has to attain in order to reap all economies of scale- called the minimum  The United States Beer Industry By Physiologically scale of production was estimated to be 8 million barrels of beer a year, suggesting that a market share of 6. 4% was required to reap significant economies of scale. By the early sass, the minimum efficient scale had increased to 23 million barrels, implying that a market share of 13. 6% was required to reap significant scale economies. In sum, the combination of declining demand, increasing advertising spending and an increase in the minimum efficient scale of production put smaller mass-market brewers at a competitive disadvantage. Many sold out to the larger brewers or, in some cases, simply shut down. By the early sass, there were only twenty four mass- market brewers left in the United States, down from eighty-two in 1970. Among the remaining mass-market brewers, Enhances Busch is the most consistent performer due to its superior economies of scale.

The company’s return on invested capital ROCCO has been high, fluctuating in the 17% to 23% range between 1996 and 2006, While net profits grew from $ 1. 1 billion in 1996 to $2 billion in 2006. In contrast, both Coors and Miller, along with most other mass-market brewers, have had mediocre financial performance at best. Coors and Miller merged with Nelson and SAAB, respectively, in an attempt to gain scale economies. March 2007 Based on this case, please answer the following three questions:  Explain separately the terms “Industry Structure” & “Strategic Group” & outline their strategic significance for a company.

Name the strategic groups in the Beer industry in the United State in 2006.  For the mass-market companies in the beer industry, using the detailed diagram for Porter’s five forces framework for industry analysis, analyze and classify each of the following forces as high / medium / low: Bargaining power of buyers Threat of new entrants Threat of substitutes Degree of rivalry Explain separately your strategic rationale for your classification of each of these four competitive forces.  The bargaining power of suppliers to the mass-market companies in the beer.

Longevity and strong brand name globally “Forevermore Diamonds”-natural, untreated, and responsibly sourced. Diamonds are forever? great slogan, top 100 advertising campaign (timeless slogan) Extensive ownership and substantial control of diamond production and sales Weaknesses: Strong competition equals limited market share Stiffer worldwide competition Increased production costs of mining

Opportunities: Engaging in new synthetic diamonds market, patenting the technology to produce diamonds of very similar quality Increase diamond sales by catering to larger target audience; potential untapped markets Expansion to other countries Threats: Government (antitrust legislation) and conflict diamonds (CARS) Threat of synthetic diamonds [Changing trends Increasing competition (Siberian mines now produce 18%/ leading Russian producer Lora’s) Recommendations:

De Beers has already taken the first steps in facing its challenges by adapting to the changing industry structure, addressing concerns of corporate social responsibility, and entering the direct operations in the United States. To expand and strengthen De Beers operations, the following is recommended: Multi-faceted advertising campaigns should focus on luxury versus necessity and incorporate the use of celebrities, product placement in movies/television, and print advertising.

Market diamonds as a symbol of eternal love, appealing not only to peoples for engagements, but also to the non-traditional couples. Appeal to sentiments of an heirloom within the family unit, which would eliminate resale, and expand market to include single women worldwide (celebrating women/ independence). For example, when I went through a divorce several years ago, I purchased a pair of diamond earrings, not as a celebratory gesture, but as a reminder that no matter how difficult the trial and tribulations during that period, I survived. SOOT Analysis: De Beers By alternately

The Bok Ale House and Brewery, an Atlantic Beach based pub and microbrewery (Brewpub) will operate as a single unit, medium-size alehouse, serving fine, hand crafted, high quality, ale, and lager beers. The microbrewery will be located at 1001 Atlantic Boulevard in Atlantic Beach, North Carolina. Today there are over 700 microbreweries operating in the United States. The Bok Ale House and Brewery will be Atlantic Beaches” first modern microbrewery, dedicated to producing flavorful ale and lager beers. A tradition revitalized!

The company’s goal is that of a multi-faceted success. Our first responsibility is to the financial well being of the brewery. We will meet this goal while trying to consider; 1) the effect of our products on the well being of our customers (and our staff), 2) the impact that our business practices and choices will have on the environment, and 3) the high quality of attitude, fairness, understanding, and generosity between management, staff, customers, and vendors. Awareness of all these factors and the responsible actions that result will give our efforts a sense of purpose and meaning beyond our basic financial goals.

The Bok Ale House and Brewery was incorporated in July of 1999. The founders are Minnie Mouse and Daisy. Minnie is the President and Daisy is the Vice President. There are 5,000 shares of common stock issued. Minnie and Daisy each own 1,000 shares and the remainder are retained by the company for future distribution. In addition they have loaned the company $100,000 of their own money for research and start-up costs. This company will be formed as a Partnership in lieu of a Proprietorship with Minnie and Daisy sharing equal responsibilities.

A suitable site for the first restaurant was found last month and lease negotiations are in the final stages. The location will be on Atlantic Boulevard, just outside Catwalk Pavilion and close to a dense population of the target market. When the lease is signed, there will be three months of free rent for construction and in that time the balance of the start-up funds must be raised. With that phase completed, The Bok Ale House and Brewery can then open and the operations phase of the project can begin.

If the business is meeting its projections by year two, we will start scouting for a second location and develop plans for the next unit. Our five-year goal is to exceed the maximum barrelage for a microbrewery (15,000 barrels annually ) and become a mass producer of Bok Ale and Boða Bok Lager worldwide with an annual profit of between $500,000 and $1,000,000.

Although the microbrewery industry is very competitive, the lifestyle changes created by modern living continue to fuel its steady growth. Trends are very important and Bok Ale House and Brewery is well positioned for the current interest in trendy, casual, beach atmosphere. As of March 15, 1999, there were 1,528 microbreweries, brewpubs, and regional specialty breweries in North America.2 There are more than 2000 malt beverage brands produced in the United States, six times the number of brands produced a decade ago. U.S. and international brewers continue to produce a tremendous array of beer styles with solid niche markets continuing to develop for industry members of every size.

The brew process was considered a woman”s job until the end of the first millennium. At that time, monastery breweries began practicing the brewing process. The monks decided they wanted a great tasting, nutritious drink to serve their meals. During fasting, beer was used to satisfy the hungry monks because the consumption of liquids did not break the rules of fasting. The monks were reported to drink large quantities of beer each day. Their love for the beverage turned it into a business.

The microbrewery business is becoming one of the largest industries in the country. In June 1997, an article in the North Carolina Times Union noted that there were 154 microbreweries without a brewpub attached and 278 more with a brewpub. In 1993 new microbreweries opened at the rate of nearly two per week in the State of North Carolina, particularly in the beaches areas . It accounts for over $240 billion annually in sales and the independent microbrewery accounts for 15% of that total. The average American spends 15% of his/her income on social entertainment outside the home. This number has been increasing for the past several years. According to the 1991-1992 North America Brewers Resource Directory, the average per-capita consumption of malt beverages was 23.4 gallons per year in 1989 in the United States.

Future Trends & Strategic Opportunities

The predicated growth trend is very positive both in short and long-term projections. In 1988, The National Brewery Association released the Microbrewery Industry 2000 report that forecasted how the industry might look in the year 2000. Some highlights from the panel’s findings:

· “Consumers will spend a greater proportion of their entertainment dollar away from home.

· Independent operators and entrepreneurs will be the main source of new restaurant concepts.

· Environmental concerns will receive increased attention.”

Craft brewers are anticipating the stability of a stronger and wiser craft-brewing industry that is already taking shape in 1999 and will continue to strengthen during 2000 and 2001. “The quality of the average brewpub and the average microbrew on the shelf is continually improving,” says David Edgar, Director of the Institute for Brewing Studies.

The Bok Ale House and Brewery will be offering adult beverages with a distinctive image.

The Bok Ale House and Brewery menu is small sized, complimentary offering of light appetizers. Our goal is to create the image of a casual, beach atmosphere while serving high quality, hand crafted beers, ales, and lagers.

Food production and assembly will take place in the brewhouse of the microbrewery. Malt barley, hops, yeast, and water will be used to create most of the ales and lagers from scratch. The brewmaster will exercise strict standards of sanitation, quality production, and presentation or packaging over the brewery and service staff. The older way of beer making will apply to certain of our products, such as; brewing in smaller batches, forgoing filtration and pasteurization to produce beers that retain more of the flavor and character imparted by yeast during fermentation. The business will produce less than 15,000 barrels per year in order to maintain its status as a microbrewery2.

There will be two areas a customer can purchase beverages. They may sit in the sitting area and get full service from a waitperson or can sit at the bar and order directly from the bartender. Either way will benefit the patron with free appetizers and high quality beverages.

There is a market segment that prefers to consume this type of beverage at home, although they do not have the time or facilities. There are already mail order companies that provide individuals and families with prepared ales, lagers and do it yourself home brewing kits.

This opportunity will be researched and developed on a trial basis. If successful, it could become a major new source of income without creating the need for additional staff or production space.

The market for Bok Ale House and Brewery covers a large area of diverse and densely populated groups. Although it will be located in a beach setting, it is an area where people travel to eat out and one that is also frequented by tourists. It is also an area known for and catering to the demographic group we are targeting. Microbreweries and brewpubs have a unique existence in that they produce a beverage of superior quality. This era of legal restrictions on alcohol consumption and the health conscious customer dictate that people are looking to drink less and but drink better . Beer is the most popular alcoholic beverage in America. Americans drink approximately 23 gallons of beer per year.

The goal of our brewery is to generate such an existence. There are more flavor profiles in the family of beer than in that of wine, sweet, dry, sour, tart, grainy, bitter, fruity – it’s all there. This makes beer not only attractive, but also as a flexible accompaniment to all kinds of food. We will offer beer on tap (small servings of several varieties at a fixed price), which creates a festive atmosphere as well as a conversation piece for our customers

The beach and boardwalk area is one of the most desirable retail locations in Atlantic Beach. The Atlantic Beach Chamber of Commerce rates it as the third best retail market in the state. There are more than 200 businesses in a 1/4 square mile area with average sales of $330 per square foot.

The customer base will come from three major segments:

· Local population — the city of Atlantic Beach with a year-round population of 123,000 is centrally located on the east coast of North Carolina and is within a 15-minute drive of 8 major suburbs.

· Colleges and Universities – Atlantic Beach has several schools within a 15-mile radius of Atlantic Boulevard and a seasonal population of 90,000.

· Tourism — between hotels, motels, bed & breakfast rooms and inns, there are over 8,500 rooms available. Last year they were at 98% occupancy.

· Local businesses — The City of Atlantic Beach lists over 100 businesses with an average of 12 employees in the Catwalk Pavilion area.

According to 1995 industry statistics from the Miller Brewing Company, beer consumption increases during the summer months .

The food concept and product image of the Bok Ale House and Brewery will attract two different customer profiles:

· The young adult and young adult student — more and more young people have developed taste for specialty brews.

· Curious and open-minded — “if you try it, you will like it.” Through marketing, publicity, and word-of-mouth, people will seek out a new experience and learn that specialty brews can be tasty, fun, convenient, and inexpensive.

Entry into the market should not be a problem. The store has high visibility with heavy foot traffic all day long. The local residents and students always support new trendy spots and the tourists do not have fixed preferences. In addition, $25,000 has been budgeted for a pre-opening advertising and public relations campaign.

Focusing on the unique aspect of the product theme (healthy, tasty foods) a mix of marketing vehicles will be created to convey our presence, our image, and our message:

· Print media — local newspapers, magazines and billboards

· Broadcast media — local programming and special interest shows

· Point of sale – A well-trained staff can increase the average check as well as enhancing the customer”s overall experience.

A public relations firm has been retained to create special events and solicit print and broadcast coverage, especially at the start-up. The marketing effort will be split into three phases:

1) Opening — An advanced notice (press packet) sent out by the PR firm to all media and printed announcement ads in key places. Budget – $10,000. An additional $5,000 has been budgeted for a one-day Open House Extravaganza.

2) Ongoing — A flexible campaign (using the above media) assessed regularly for effectiveness. Budget – $10,000

3) Point of sale — A well-trained staff can increase the average check as well as enhancing the customer’s overall experience. Word-of-mouth referral is very important in building a customer base.

Future plans and Strategic Opportunities

Catering after-hours office parties for special occasions and holidays (even outside of our local area) may become a large part of gross sales. At that point, a sales agent would be hired to directly market our products for catered functions.

The microbrewery, at 1001 Atlantic Boulevard, is a 2400 Square foot space. It was formerly a restaurant and needs on minor structural modifications. The licenses and codes’ issues are all in order. New equipment and bar furnishings will be purchased and installed by the general contractor. Offices of the corporation are presently at Daisy Duck”s home but will be moved to the microbrewery after opening.

The microbrewery will be open 7 days a week. Service will begin at 5:00 PM and end at 2:00 AM. The microbrewery will be closed Christmas and Thanksgiving.

Employees will be trained, not only in their specific operational duties, including proper sanitation methods, but also in the philosophy and applications of our concept. They will receive extensive information from the brew master and be kept informed of the latest information on microbrewing.

A big emphasis is being placed on extensive research into the quality and integrity of our products. Products will constantly be tested for our own high standards of purity. Costs and inventory control will be handled by our computer system and checked daily by management.

All products will be prepared on the premises. The brewery will be designed for high standards of sanitary efficiency and cleaned daily. Ingredients will be purchased and stored in large coolers in the basement.

Minnie Mouse, President. Minnie is also the manager of another microbrewery. Since 1977, the company has created a high-profile mainstream image for specialty brews. In 1992, the store became so popular and profitable, she decided to expand her horizons and co-own a store of her own. Minnie brings with her a track record of success in the microbrewing industry.