49th State Brewing Co. Anchorage

49TH STATE BREWING CO ANCHORAGE 6

49thState Brewing Co. Anchorage

49thState Brewing Co, Anchorage

Alaskais the place where the 49th State beer inclusive of handcrafted alesand lagers are brewed. The industry involves combining the best malt,hops, water, and yeast with the greatest passion for the craft toproduce the beer. Also, the alsooffers great meals to impress their guests including both the localsand the tourists. Consequently, the 49th State Anchorage hosts twotheaters, hence providing entertainment for their guests as theycelebrate the beer or while enjoying their meals. The primaryobjective of the 49th State Brewing Co. is to provide their visitorswith a product they proudly own and offer healthy meals than anyother company. Therefore, they conclude that there is something foreveryone to enjoy at the 49th State Co. Anchorage and as a resultmanaging to attract more customers. Discussed below is how thePorter’s Five Forces approach is used to analyze the 49th StateBrewing Co. Anchorage.

Threatof New Entrants

Thisis one of the factors within the Five Forces Model indicating thepossibility of new entrants entering into an industry creating acompetitive environment for the existing companies. In addition toPorter’s Five Forces, one of the forces that shape the competitivestructure of an industry the new entrants` threat. Additionally, thisfactor changes the economic environment and has a direct impact onthe profits of an existing firm. However, there is a limited chanceof this happening with the existence of some forms of barriers toentry into the industry. This includes barriers such as strictregulations by the government, the need for specialized knowledgeregarding technology, or high investment requirements concerningcapital (Analoui &amp Karami, 2003). As an international company,the 49th State Brewing Co. remains one of the largest brewingindustries in the world. The business began as a brewing company andlater the operations expanded to include the offering of meals. The operated with a high number ofguests both local and tourists, hence its market capitalization isfar much ahead of its competitors. Besides, the company has thenecessary brand awareness and credibility as a strong, reliablepresence in the market to counter new entrants (Analoui &amp Karami,2003).

Threatof Substitutes

Asubstitute is a merchandise from another industry, offering similarbenefits to the consumer as the products manufactured by the firmswithin the business. In agreement with Porter’s Five Forces, thethreat of substitution shapes the competitive structure of anindustry. Consequently, the profitability of an industry may beaffected by the availability of a substitute as consumers can chooseto purchase the alternatives instead of the firm’s products. Lackof close substitutes to the makes itless competitive and as a result, there is increased profitabilityand potential for further growth for this firm in the industry.Furthermore, the company offers high-quality services and thereforethe threats of substitution are low. The 49th State Brewing Co.Anchorage attempts to maintain consumers within the industry throughpositive advertisements from the company. As a result, the brewingcompany has huge marketing and advertising budgets to create andsustain brand visibility and loyalty. Hence, this helps it to dealwith substitute products in the market.

BargainingPower of Suppliers

Accordingto Porter’s Five Forces, this effect analyzes how much power abusiness vendor contains and how much authority it has over thepotential to raise its prices. Companies operate well when there aremultitude suppliers since the fewer the number of suppliers the morepower they have (Hill &amp Jones, 2010). As a result, dominantsuppliers reduce the profit potential in the industry. Competitionwithin an industry increases when the providers threaten to raise theprices or reduce the quality of goods and services (Hill &amp Jones,2010). Considering the 49th State Brewing Co., suppliers aredifferentiated hence there exist only a few vendors in the markethence the company has more leverage due to the absence of availablealternatives. Moreover, the supply chain of the 49th State BrewingCo. Anchorage moves from one country to another, hence driving it toa more widespread competitive marketplace with a few majorcompetitors.

BargainingPower of Buyers

Thisrefers the ability of customers of the industry to influence theprice and the terms of purchase. Consumers have power when they arefew, when the sellers are many, and when it is easy to switch fromone business product to another. Into the bargain, influential buyersreduce the profit potential in the industry. Consequently, there isincreased competition within an industry when consumers force downprices, bargain for improved quality services, or when they playcompetitors against each other (Hill &amp Jones, 2010). Consideringthe 49th State Brewing Company, the buyers` group is not dominantsince the profits earned from the industry are high. In addition tothis, they lack full information about the industry, and theconsumers` group is not concentrated therefore there are manypurchasers and a few sellers.

Rivalryamong Competing Firms

Thisrefers to the extent to which companies within an industry exertpressure on one another limiting each other profit potential.According to Porter’s Five Force rivalry in an industry affects thecompetitive environment and in return influences the ability of theexisting firms to achieve profitability. Consequently, the rivalrybetween businesses can impact the industry profit through variousways such as downward pressure on prices, increased innovation andenhanced product or service among others (Hoskisson &amp Hoskisson,2013). As a result, the has improvedits product differentiation through improving features, implementinginnovation in the manufacturing process, and in the quality product,it generates. The corporation offers food and entertainment, insteadof focusing on alcoholic beverages, as a way of challenging itsrivals.

References

Analoui,F., &amp Karami, A. (2003). Strategicmanagement in small and medium enterprises. London[u.a.: Thomson Publishers.

Hill,C. W. L., &amp Jones, G. R. (2010). Strategicmanagement theory: An integrated approach. Boston,MA: Houghton Mifflin Publishers.

Hoskisson,R. E., &amp Hoskisson, R. E. (2013).Competing for advantage.Mason, OH: South-Western/Cengage Learning Publishers.