Mountain Man Brewing Company Case Analysis
Autor: ramzihhaddad • March 5, 2013 • Case Study • 949 Words (4 Pages) • 2,092 Views
Mountain Man Brewing Company is facing declining sales and net revenues. This is led by a
trend that in recent years has seen beer drinking decline with the exception of the light and craft
beer segments. For the first year in its history, MMBC has seen its revenues decline and the
company must consider how to respond to the adverse market conditions facing its core product.
The company’s goal is to insure its long-term growth and profitability. In order to do so they are
considering the launch of a light beer, leveraging their existing capacity to enter a still growing
market. This is a difficult concern as product extensions very often fail. To this point MMBC has
survived when many other independent brewers have gone out of business due to their good
quality, their reasonable prices and their strong brand.
In this, brand is key, with many customers expressing substantial loyalty and respect for its
rugged, independent flair. MMBC remains family-owned and has built a continuous connection
to its customer base since its 1925 founding. This traditional recognition is bolstered by
continued accolades, having won “Best Beer” awards in both West Virginia and Indiana.
Unfortunately, MMBC has an aging demographic, drawn mostly from blue-collar middle-aged
(and older) men. However, while the premium beer category, to which Mountain Man Lager
belongs, declined 4% in annual sales, MMBC lost only 2% of its revenues. As light beer is
growing and holds more prosperous demographics, there is a strong case to be made for entering
this market. However, the risk of damaging the existing brand and cannibalizing sales by
competing with already entrenched light beer market players is undeniable.
If MMBC were to merely accept the status quo without any new investment or strategic change
the company would likely be facing systematic decline. But the question is not merely whether to
use existing capacity to launch a new product or abject inactivity. Reinforcing our existing core
product and entering new markets also needs to be a consideration.
Launching Mountain Man Light: risk
...