Portland Cider Company - Company Analysis - Report Example

Running head: COMPANY ANALYSIS Company Analysis: Portland Cider Company Table of Contents 1. Executive Summary The purpose of this report is to analyze the Portland Cider Company (Portland Cider) and its external environment. The key findings of the report are that Portland Cider is a relatively new company operating in an emerging industry in Oregon and in the US. The cider industry is growing with the increasing preference for cider among Americans. In turn, there is high competition, high buyer bargaining power and high supplier bargaining power because of the increased demand for fruits used in making cider. In summation, this means that companies such as Portland Cider have to be innovative in order to produce high quality cider, be efficient and offer a variety of products in order to deal with the rivalry in the cider industry. 2. Company Overview Brief description and background of the company Portland Cider is an Oregon-based beverage company that produces commercial cider. The company was established and incorporated in Oregon in 2012 by a native of Oregon known as Jeff Parrish and his wife Lynda, who was originally from England (Portland Cider, 2013a; Manta Media Inc., n.d.). The company makes cider from fruits using handcrafted methods. It avoids the use of flavorings, concentrates, colorings any artificial additives in its products (Portland Cider, 2013b). Current vision and mission The current vision and mission of Portland Cider is to produce handcrafted cider to ensure that consumers enjoy natural cider that is devoid of any flavorings, concentrates, colorings or other artificial additives. The company aims to offer quality drinks to its clients, going by its slogan “Drink it, it’s good!” (Portland Cider, 2013b). Management team The management of the company comprises the two owners of the company, who are in change of one to four people employed by the company (Manta Media Inc., n.d.). Key products, customers, suppliers Portland Cider produces a wide range of ciders. These include Kinda Dry, Sorta Sweet, Hop’rageous!, Happy Medium, Cascade Juniper, Pearfect Perry and Santa’s Sauce (Portland Cider, 2013c). These products vary in terms of taste and the ingredients from which they are derived, such as apple and pear juice. Portland Cider’s customers are mainly individual guests who visit the company’s taprooms are well as those who purchase bottles of the various varieties of cider. The company’s suppliers include orchard owners and vendors as well as manufacturers who supply various types of equipment such as fruit processing equipment, fermenting machines, bottles and the furniture that is used by guests in the taprooms. Key business partners Portland Cider’s key business partners include suppliers and owners of premises such as the property that the company rented recently in Hawthorne District, Portland (Portland Cider, 2015). The company also partners indirectly with restaurants which offer food items that can be consumed together with the ciders that it manufactures. These restaurants have been described on the company’s website as “excellent restaurants” (Portland Cider, 2015). Brief financial analysis: profit/loss, balance sheet, and cash flow (if available) Given that Portland Cider is a privately owned and operated company, not much financial information is available about it. Manta Media Inc. (n.d.) however indicates that the company has a yearly revenue of under $500,000. Current business objectives and strategies The company’s current business goals are to expand in order to have a wider reach to consumers. Its strategy therefore involves expanding to areas it has not been present before. For instance, the company has rented a 1300-square-foot premises to act as its second taproom (Portland Cider, 2015). The new premises will have 24 cider taps and offer a wide range of ciders (Portland Cider, 2015). By renting the space, the company wants to offer not just its ciders but also ciders from other cider producers. This means that Portland Cider will be able to serve many customers and thus promote its brand name. In particular, the strategy to allow customers to bring food from restaurants as they take their various ciders (Portland Cider, 2015) will help attract more customers. Key findings from the balanced scorecard It can be noted that Portland Cider is a relatively new company, having only been established about three years ago. The company has a focus of offering quality natural ciders to its customers and this has given it a unique market position through the wide range of products it offers. This is coupled with excellent service offered by the company’s staff. The result is that the company has been able to achieve annual sales of approximately $500,000 per year, which is expected to increase with the current expansion strategy. 3. External Analysis Description of the industry The cider industry in Oregon is part of the wider cider market in the US. Production of apples in the US and particularly in the Northwest District where Portland Cider is located has been on the rise in recent times after a long hiatus (Watson, 2013, p. 29). This is driven by the point that Americans have started developing a taste for hard cider (Watson, 2013, p. 29) as well as other variants of the product. There is also an increased demand for cider in countries such as China and England. Despite this, cider remains a considerably minor player in the beverage and alcohol industry, accounting for about 0.3 percent of the all beer and flavored malt produced in the US in 2012. Consequently, the relatively young industry provides opportunities for growth. It is therefore not supporting that many companies are coming up to have a share of the cider market both in Oregon and the larger US. PESTEL analysis Cider production in Oregon is regulated by both state and national laws of the US. Portland Cider is therefore subject to these laws. The company is also affected by economic factors such as income levels of potential cider consumers, government taxation, and economic growth in the cider industry. Technological factors in the industry include the need to use technologies that ensure high quality cider, avoiding use of additives, and ensuring efficiency in production. Environmental factors are related to the need for cider makers to use environmentally friendly approaches since they use fruits and other natural ingredients. Competitive forces: Five-Forces Model The threat of substitutes for cider is medium to high since consumers can choose other beverages or alcoholic drinks should they be dissatisfied with the ciders being offered in the market. The cider market faces a high threat of new entrants since many companies are realizing the significance of cider in the US and especially in Oregon. For instance, the Square Mile Cider Company entered the cider market in 2013 (“Square Mile Cider Company”, 2013), just a year after Portland Cider had been established. Another company, Seattle Cider, made an entry in Oregon in 2014 (“Seattle Cider Co.”, 2014). Another newly established cider company is Reverend Nat’s Hard Cider (Reverend Nat’s Hard Cider, n.d.). These companies, together with the old and established cider manufacturers such as E. Z. Orchards (E. Z. Orchards, 2015), pose a high level of rivalry. With the increase the number of cider producers in Oregon, buyers of cider have a relatively high bargaining power since they can easily switch to other cider varieties. The high level of competition in the cider industry means that manufacturers have to price their products in accordance with the level of competition. With the increased number of cider makers in Oregon, suppliers will have a high bargaining power because of the high demand and also because they can easily switch the company to which to supply their products depending on the price being offered by different cider makers. Key findings from the external analysis The cider industry is growing because of the increasing Americans’ preference for cider. The industry is characterized by high competition because of the increasing entry of firms that manufacture cider. This means that companies must adopt innovative production methods in order to gain a competitive advantage, as demonstrated by Portland Cider Company through use of handcrafted production, production of natural cider and offering a variety of products under its brand. References E. Z. Orchards. (2015). Welcome to E. Z. Orchards. Retrieved from http://www.ezorchards.com/ Manta Media Inc. (n.d.). Portland Cider Co. Retrieved from http://www.manta.com/c/mtrsrxk/portland-cider-co?ftoggle-frontend-prod-on=abTests.revenue.second_adsense_control&utm_expid=82789632-37.WBDX7gXdSGiiUSeuLQXRug.1&utm_referrer=http%3A%2F%2Fwww.google.co.ke%2Furl%3Fsa%3Dt%26rct%3Dj%26q%3D%26esrc%3Ds%26source%3Dweb%26cd%3D10%26ved%3D0CE0QFjAJ%26url%3Dhttp%253A%252F%252Fwww.manta.com%252Fc%252Fmtrsrxk%252Fportland-cider-co%26ei%3DcK4TVdSBJoXfaq2ugaAL%26usg%3DAFQjCNERP6tFXjzvS5eCk5pWA2fZBaSS1g%26sig2%3D0Mnj9OMHvOCbRE7Ub7wLKA Portland Cider Company. (2013a). Our story. Retrieved from http://portlandcider.com/our-story/ Portland Cider Company. (2013b). Oh my goodness… Retrieved from http://portlandcider.com/ Portland Cider Company. (2013c). Taproom. Retrieved from http://portlandcider.com/taproom/ Portland Cider Company. (2015, January 7). The Portland Cider House. Retrieved from http://portlandcider.com/blog/ Reverend Nat’s Hard Cider (n.d.). An obsession with flavor. Retrieved from http://reverendnatshardcider.com/story/ Seattle Cider Co. Enters Oregon Cider Market (2014, January 29). Brewpublic. Retrieved from http://brewpublic.com/craft-cider/seattle-cider-co-enters-oregon-cider-market/ Square Mile Cider Company launches as Craft Brew Alliance jumps into cider market (2013, April 2). Beerpulse.com. Retrieved from http://beerpulse.com/2013/04/square-mile-cider-company-launches-as-craft-brew-alliance-jumps-into-cider-market-116/ Watson, B. (2013). Cider, hard and sweet (3rd ed.). Woodstock, VT: The Countryman Press. Read More

 

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