Case study one and two - Term Paper Example

Mystic Monk Coffee is a privately owned business that specializes in coffee and tea products. The firm has three employees and it generated in revenues of $110,000 (Manta). The business organization is located in Powell, WY. One of the strategic limitations of the company is that it is a small business. The company’s revenues are too small to attract investors. Since the firm is not a public corporation it can not take advantage of the stock market to raise capital for expansion. An alternative that the company can use to raise capital is to change the corporate structure of the company from a sole private business to a partnership.

The partner would have to buy in to acquire equity in the company. A good way to determine the valuation of Mystic Monk Coffee is to hire a consultant to determine the value of the firm. The new partner will provide the firm with cash that can be used to expand the business. The partner will also bring human capital into the organization. A second constraint the company faces is limited workforce capacity. The firm only has three employees. Once the new partner comes on board the company can solve the problem by hiring three additional employees.

The new employees can help the company in its expansion plan. A growth plan of adding another store managed by the new partner can give the firm added exposure and it can double the revenues.The beer industry is the United States generates $100 billion in revenues annually. Beer is the most consumed alcoholic beverage worldwide. As a drinkable beverage beer has lots of substitutes. Beer can be substituted by water, sodas, tea, juice, and hot beverages including coffee and chocolate. If we narrow the product category, beer is an alcoholic beverage.

Wines, rum, vodka, and other hard liquors are substitutes to beers. The bargaining power of the buyers in the beer industry is affected by various factors. The list below illustrates three of those factors and its relative power:1. There are 4,500 wholesales nationwide – weak2. Large numbers of brewers to choose from – medium3. Exclusive rights to sell to sell specific brands – moderate(Lassila). There are several critical success factors in the beer industry. One important factor for success in the beer industry is advertising.

Beer companies spend billions of dollars each year on advertising using multiple media channels including television, radio, billboards, and the internet. The target market that is aggressively targeted in advertising by beer companies is people between the ages of 18-35 years of age. A second critical success factor is customer loyalty. Beer companies depend on the repeated business of its customers to generate revenues on a recurrent basis. Typically beer drinkers choose a brand they like and they order the same branded beer at the different bars the person attends.

A third critical success factor is to have effective distribution channels. The only way to get the product in the marketplace is by having a network of distributors to move your product in the marketplace. Work Cited PageLassila, A. 9 February 2006. “Adolph Coors in the Brewing Industry.” 4 September 2010. Manta.com. 2011. “Mystic Monk Coffee.” 4 September 2011.