INDUSTRY OVERVIEW of The Beer Industry (Competitive Opportunities and Threats)

INDUSTRY OVERVIEW of The Beer Industry (Competitive Opportunities and Threats)

Summarize the industry environment for favorableness. The following checklist should help you:

Industry size:    Dollar sales volume (also volume in units, if available)

Industry growth:    Rate of growth in percentage terms (increase in industry sales
averaged for five-year period).  Where is the industry in the life     cycle – emerging, rapid growth, maturity, decline?  Provide     supporting evidence for your conclusion.

Competitive    Is the end product highly differentiated (e.g., toothpaste—low
Segments    price, medicinal, whitening, good tasting)?  If so, entry from
outside the industry is difficult

Growth of    Are there segments within the industry growing faster than others?
Segments    If so, threats of entry from other segments may be high.

Vertical integrationWhat is the degree of backward or forward integration? Are
there a series of intermediaries processing material input or
distributing/retailing the end product? If so, the profitability of
firms making the end product is likely to be low.

TechnologicalIs the industry technology changing rapidly?  Are there segments
Change                       where it is changing more rapidly? If so, barriers to entry are low.

Ease of entryAnalyze cost, differentiation, and transaction advantages enjoyed
by incumbent firms. Based on this analysis, rate entry threats as
high, medium, or low.

Rivalry                        Assess the degree of rivalry in each segment.  How does
competition occur?  Are there price wars, frequent innovation,
mergers and acquisitions? Analyze demand, industry structure,
and exit barriers and rate rivalry as intense, medium, or weak.

Supplier segment          Is the segment consolidated or fragmented?  Is suppliers’
(key inputs only)           technology patented? What is the availability of substitute
inputs? Can suppliers forward integrate?  Rate supplier power as
high, medium, or low.

Buyer segment             Is the segment consolidated or fragmented? Can buyers easily (individuals &             switch? What is the quantity bought?  Can  buyers backward
institutions)                  integrate?  Rate buyer power as high, medium, or low