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Finance Case

Autor:   •  September 14, 2014  •  Study Guide  •  460 Words (2 Pages)  •  923 Views

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How would you say Boston Beer is doing? What are the sources of its competitive advantage? How sustainable is its competitive advantage?

I would say that Boston Beer is doing well because it is going IPO meaning that the company is growing bigger and the next step is going public.

Sources of its competitive advantage:

• High quality Bavarian hops from Germany which are hand-selected and used to make the beer

• Invests directly into existing brewery companies which saves them from building a new factory (saves costs)

• Using R&D to grow market share

• Developing new flavors

How sustainable:

• May not be as sustainable

• Because of competition, it would lead to higher production cost which leads to lower profit margin

• Have to invest in own facilities and equipment to maintain standard

Why has Boston Beer chosen a dual class share structure for its IPO? What are the implications for a dual-class structure for investors?

This is to allow the shareholders of the class B stock to control the company internally.

Implications:

Stock A: sold to public to raise capital for future investment and has limited voting rights

Stock B: to enable control of the company internally from the original shareholders example would be Jim Koch having class B stock enables him to control the company, convert to common stock etc. voting power is also in class B.

This is unfair to those who own class A stock as they are limited in

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