New Belgium Brewing Summary - Case Study Example

Case Summary New Belgium Brewing Summary of the Case In this present day business context, brand and corporate image plays an imperative role insupporting an organization towards attaining long- term sustainability. However, small and medium sized businesses also have their own business position within any industry sector. An appropriate example in this regard is New Belgium Brewery (NBB), which operates in the brewing sector. The company, which is located in Colorado, has been able to gain considerable momentum in its business with the help of building strong corporate social image. Incepted in the year 1991, the company has been able to reach the position of seventh largest brewing company in the US. In the initial days of its operations, the company has dealt with certain stern challenges in convincing the customers to buy its products. Right from the days of its inception, the company has been able to build the reputation of delivering high quality as well as innovative products and/or services to the customers. In the later phase of its operations in the US market, the company succeeded in enhancing its corporate social image in the form of acting as an environmental efficient unit (Coronado Art & Design, 2013). From the case study provided, it has been quite clear that NBB is extensively and effectively involved in conducting various social responsibilities including proper management of wastes, recycling of the products and taking initiatives for the betterment of its customers along with the societal members among others. Few of the notable offerings of the product line of the company comprise sunshine wheat, blue paddle and tire amber among others. During its operations, NBB initiated a program named ‘lips of the faith’ under which the company developed products that are mainly used for special occasions such as internal celebration and other landmark events. On an average, NBB sold 700,000 barrels of beer every year. Through its extensive operations in the US market, the company contributed positively towards developing the employment sector of the nation at large (Coronado Art & Design, 2013). Over the years, the operations of NBB have laid major focus on achieving sustainability through enhancing its corporate social image. The core purpose of the business of the company was not only attaining maximum profitability but also providing active support to the community members. The operations of the company was mainly dedicated towards contributing positively to the environment, employees, customers and the society that further became the core values of its business. In order to contribute positively towards the environment and the people living in the society, the company has initiated programs such as installation of smart grid to conserve electricity and the use of renewable sources to get the power for its operations. Furthermore, in order to contribute positively towards the society, the company laid major focus on developing environment friendly products so that the lives of the people of the society could be enhanced. The company also conducted various philanthropic activities for improving the lives of the people. NBB also focused towards gaining satisfaction of the employees by providing attractive benefits to them apart from offering them with their basic compensations. All these approaches of the company certainly developed its corporate social image and overall performance by a greater degree (Coronado Art & Design, 2013). Case Update Despite the challenges faced by NBB, the company still cemented its position as a strong corporate social unit in this competitive business setting. However, in order to cope up with the changing business setting, tastes along with desires and preferences of the customers, the company has developed numerous strategies and initiated programs for the welfare of its stakeholders. On further note, the company has also aligned it operations with various other brands towards expanding its business operations throughout various regions of the globe. Furthermore, in the process of strengthening its environmental performance, the company has recently decided to transform its entire operations into a unit, which will use only wind energy as the source for their power. It will act as an alternative source of power for the present day operational need of the business (Terrain, 2013). It is worth mentioning that NBB continuously seek to provide quality services to the customers through its products through ensuring optimum use of the valuable resources. The company also began to establish its operations in the foreign markets through small trails with compromising on the aspects of exclusivity as well as the quality of the products. Furthermore, in recent times, the company has also been able to maintain a culture in the workplace wherein it seek to attain trust of the customers and other stakeholders as well as assuring attaining maximum profitability (Lyczkowska, 2012). However, during this period, the company has also dealt with several key challenges owing to the prevalence of extreme business market competition within the respective industry wherein it operates. Justifiably, as per the recent report, an event i.e. USA Pro Challenge has replaced NBB with Sierra Nevada Brewing Co as its official beer partner (Sealover, 2014). Thus, with this concern, it can be ascertained that the company i.e. NBB loses its identity as the official partner of the event to its competitors Hence, major changes are apparent in the overall business approaches of NBB. Updated SWOT analysis Internal Strengths: Employees’ satisfaction Environmental responsibility Business sustainability Support of the Society External opportunities: Expanding the operations of the business Making the operations of the company public Gaining faith of the investors towards the business Internal Weaknesses: Low share in the market Limitations of advertising practices Less focus towards enhancing the overall business profitability External threats: Augmenting competition amid the players in the industry Working in compliance with updated technologies Declining product demand within the industry Strengths Shifting its focus towards becoming a socially responsible unit has enabled NBB to enhance the aspect of sustainability up to a considerable extent. The efforts of the company to live up to its own standards in terms of enhancing the environmental performance of the business have certainly paid off. Owing to this aspect, the company has been able to expand its operations along with raising demands of its varied products that are served to the customers. Notably, the company has also been able to show positive results in the domain of gaining greater employee satisfaction, which supported it to perform varied operational functions in a socially responsible manner. The company intends to provide or ensure deliverance of maximum benefits to the employees apart from offering their basic compensations. Notably, the company works in alignment with the employees to fulfill the goals of operating in an environmentally responsive manner. This further influenced the employees in terms of raising their motivational level in a positive manner. The strong approach of the company towards the environment is duly considered to be one of its strengths (Coronado Art & Design, 2013). Moreover, it can also be ascertained that the company fulfills its responsibility towards the society in an efficient manner through fostering utmost innovation and the use of advanced technological advancements. The company remained much involved in conducting philanthropic activities in order to make effective contribution towards ensuring the wellbeing of the society. Apart from this, the company is also noted to get involved in the initiation of programs like water conservation, sensible transportation and most vitally following sustainable agricultural procedure that contributed positively towards the society. This could be regarded as its another strength factor (Coronado Art & Design, 2013). Weaknesses Amid the several challenges that NBB faced while performing its varied operational functions, the problem in the domain of advertising is deemed to be quite major. The most effective way based on which the company advertises or promotes its operations is identified to be word of mouth. Though the company has established its operations throughout Colorado and other parts of the US, it still needs to enhance its advertising activities so that a wider awareness about the company can be assured amid the customers. This will also amend the brand image of the company amid the customers. Again, it has also been noted from the case study provided that the company is currently distributing its products in various parts of the US. However, there are still few territories wherein the absence of the company is quite prevalent. Hence, this particular facet of the operations of the company has negatively impacted the overall market share. Again, less focus of the company towards enhancing its profitability is also one of its major weaknesses. Though the mission of the company is to ensure performing profitable brewery operations, less effectiveness is seen in this regard (Coronado Art & Design, 2013). This is the other weakness of the company. Opportunities The company i.e. NBB has experienced continuous and considerable growth in recent times owing to the expansion of its business within the US brewery market. However, there is still a wider scope of expansion for the company especially in the global brewery market. Contextually, the company can move its operations from the present 28 states of the US to other parts of the world. Another vital opportunity of the company in the present day context is to move the operations of the company publicly. This will certainly help the company to enhance its brand image and build a sustainable position within the brewery industry. Another vital opportunity for the company is gaining the interests of the investors towards investing substantial amounts for development. Thus, in this regard, the company will need to present itself as an effective unit within the industry so that it could be able to gain the attention and trust of the investors and encourage them to invest in the business at large (Coronado Art & Design, 2013). This could be regarded as a potential opportunity for the business of NBB. Threats One of the major threats of NBB is the rising business market competition within the industry. Notably, the company operates in the industry with facing tough competition from certain major competitors especially from the craft breweries such as Boston Beer Co and Sierra Nevada among others. This can further be considered as a long-term threat for the company. Furthermore, another important challenge for the company is the increasing need for business units to adopt and utilize the latest technologies in order to perform swift operations. Failure to implement advanced technologies in the business might again affect the overall efficacy of the business of NBB. Additionally, a marginal decline has also been seen in recent times within the industry with regards to the brewing products, which can again be considered as a potential threat for the company in future context (Coronado Art & Design, 2013). Challenge(s) There are several key challenges that the company is dealing with in the present day context. In this similar context, one of the major challenges facing by the company is the increasing level of competition amid the companies within the brewery industry. Notably, being a craft brewery player, the company i.e. NBB has faced stiff competition from certain potential market players like Sierra Nevada and Boston Beer Co. among others. It is important to consider the fact that these companies have considerably expanded their respective operations within the US and certain parts of Columbian district in recent times. Notably, Boston Beer Co. has taken the initiative of investing $35 million as a part of its capital investment projects. This aspect has further forced NBB to enhance its operations in order to move in accordance with the challenging business environment (Coronado Art & Design, 2013). Again, it has also been noted that the company has set a commendable image in the US brewery market in terms of fulfilling varied social responsibilities. However, it is believed that the company still has a wider task to be executed to reach as well as maintain the standards of social approaches that it committed. The company faced enormous challenges to examine its social and ethical responsibilities so that effective operations can be ascertained in this particular domain for a longer duration of time. Furthermore, it has also been apparently recognized that though the power used by the company is received directly from the renewable sources, its several operations are still being used through natural gas as the power source (Coronado Art & Design, 2013). Hence, it has been a stiff challenge for the company to maintain its hard-established corporate social image. Alternatives Alternative 1 Notably, the company i.e. NBB is dealing with stiff challenges from the competitors in the form of their rapid business growth and product differentiation. In order to deal with this particular issue, the company will need to focus more on enhancing its one of the strengths i.e. strong business reputation as a socially responsible player. It is worth mentioning that NBB has been operating with the image of being one of the major organizations within the brewery industry operating varied operational functions with fulfilling diverse social responsibilities. Hence, the company would need to emerge with more initiatives in the domain of CSR. These strategies can be in the form of ensuring awareness of the customers with regard to the negative impact of over intake of beer consumption. The company will need to emerge with campaigns where it can influence customers to consume beer in limited or appropriate amount, further ensuring a healthy living for them (Schwartz, 2011). Pros and Cons. The above discussed alternative can be quite advantageous for the business as it will enhance the corporate social image to a much higher level, further impacting the overall performance of the company at large. However, the awareness amid the people might also act against the current level of its sales, which can again be regarded as a weakness factor for the company. Alternative 2 NBB must need to emerge with the strategies of expanding its operations outside the US market. Notably, the company is dealing with stiff business market competition especially in the domain of business growth and expansion. Most of the potential competitors of NBB have remained much focused on expanding their business operations all over the US so that a huge figure of customers are attracted, resulting in enlarging customer base. In order to deal with this particular situation, NBB must need to ensure that it moves faster than that of its competitors in terms of business expansion. Hence, NBB should not only focus on expansion within the US business market but also mark its presence in the global industry (Berghe, 2002). Pros and Cons. The advantage of the aforementioned alternative is that the company will not only be able to ensure utmost growth of the business, but will also enhance its market share up to a considerable extent. However, this particular approach might impact the present US based operations of the company wherein it possess the reputation of being seventh largest brewery in the nation. However, switching to other strategies might influence the focus of the business on its current activities, which can be regarded as a disadvantageous factor of this particular alternative. Alternative 3 NBB can also emerge with the idea of diversifying its wide product ranges along with the adoption of advanced technologies to execute its operations. It can be ascertained that product diversification is one of the most effective means of gaining competitive advantage over that of the rivals in any industry. Contextually, the company will need to come up with implementing the ideas of product diversification wherein it can introduce products that seem to be quite different from that of its competitors (Villagra, 2005). Pros & Cons. This alternative will certainly allow the company to attain long-term sustainability and gain superior competitive position. Again, with the implementation of innovative technologies, NBB may able to conduct its operations in a more effective manner further boosting the performance of its business by a considerable degree. However, one disadvantage of the approach might be high cost and time required to execute the process, which, might negatively impact the focus of the company towards conducting its basic operations efficiently in the US. Selected Alternative and Rationale The above discussed second alternative i.e. global expansion of NBB’s business has been selected for the company to deal with the issues effectively that it faced while conducting varied operational functions. Notably, the company though not being public, has been able to present itself as one of the better performers in the US brewery market. This can also be linked with the innovative operations of the company where it enabled to gather the attention of the customers through delivering quality products and/or services to them. The company also introduced traditional but innovative approaches in its marketing activities. For example, one of the stores of the company in Colorado provides gas money to the customers or the people who stop buying beer of NBB. Owing to this particular approach of the company, customers continuously used to call and enquire about the products that further raised the demand of the product and also the overall sales. The company i.e. NBB also uses social media to market its wide product ranges that further captured the attention in excess of 300, 000 fans in Facebook and over 100,000 followers in Twitter (Hill & Jones, 2007). Overall, it can be stated that the company has flourished its operations in the US in quite a profitable and positive manner. However, with the presence of the existing rivals and new entrants in the brewery sector, the company has faced challenges in mitigating the transforming business environment. Furthermore, the changing technological advancements has also worked towards augmenting the challenges for NBB in its operations within the brewery sector. Thus, it can be affirmed that all the above discussed aspects have further influenced the selection of global expansion as an alternative strategy for NBB, supporting it to gain competitive advantage and sustainable growth for longer time period. It is projected that through the mode of global expansion, the company will be able to mark its presence in the global market and present itself as a better unit within the sector. This particular alternative will also enhance the market share of the company, further amending its major weaknesses that have been discussed above. Specially mentioning, the alternative will also assist the company towards attaining superior competitive position over its chief business market competitors (Hill & Jones, 2007). It has also been noted that performing global operations and making the operations public, NBB will be able to gain recognition in a wider demographic platform. In this regard, it can also be depicted that since the company possess greater business reputation within the brewery industry, which will enable the company to enter into the global market with utmost ease. References Berghe, L. (2002). Corporate governance in a globalizing world: convergence or divergence?: a European perspective. US: Springer Science & Business Media. Coronado Art & Design. (2013). New Belgium brewing: ethical and environmental responsibility. Retrieved from http://www.michaelcoronado.com/michaelcoronado/images/pdf/NBB_research/NewBelgiumBrewingCase.pdf Hill, C., & Jones, G. (2007). Strategic management: an integrated approach. US: Cengage Learning. Lyczkowska, K. (2012). Case study of new Belgium brewery. Retrieved from http://www.academia.edu/4182482/Case_Study_of_New_Belgium_Brewery Sealover, E. (2014). USA Pro Challenge finds a new beer partner. Retrieved from http://www.bizjournals.com/denver/news/2014/03/05/usa-pro-challenge-finds-itself-a-new.html?page=all Schwartz, M. S. (2011). Corporate social responsibility: an ethical approach. US: Broadview Press. Villagra, E. S. (2005). Does product diversification lead sustainable development of smallholder production systems in northern Patagonia, Argentina? Gottingen: Cuvillier Verlag. Wann, D. (2013). Brewing a sustainable industry. Retrieved from http://www.terrain.org/articles/9/wann.htm Read More