1. Boston Beer Company Final Presentation December 5, 2010 Brian Doran Colin Keil Sharlene Gale Jeff Schafer Kelsey Schmidt Caitlin Smith
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3. CEO Jim Koch has authority to elect five of the eight board members
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6. Board Members are expected to present the board a request to leave the Board – the Nominating/Governance Committee decides if they may under circumstances.
7. Board must always have three committees: Audit, Compensation, and Nominating/Governance
8. Each committee has Chairman and the power to hire independent advisors when necessary.Corporate Strategy
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10. Board members give their decisions/comments to the Chairman, who is expected to give this information to the public.
15. Increased focus as consumer preferences as they areshifting towards premium beer, MillerCoors is following by sending every employee of its craft brewery Tenth and Blake back to beer school.
16. Like there competitors Boston Beer has existing agreements with suppliers and distributors which yields stability and predictability.
17. Boston Beer is unique with there contract brewing. It utilizes the excess capacity of other breweries.
20. Organizational Culture “As a company, we look at the world as one without limits, and as one in which we are free to explore, grow, create, and enjoy. Although proud of what we have achieved thus far, we look forward to the opportunities and possibilities that lie ahead.” – Jim Koch Corporate Strategy
21. Corporate Social Responsibility 2008 Hops Shortage Sharing Selected 108 craft brewers to receive the 20,000 pounds of hops it could spare Long Shot Competition Home brewers submit to see their creation in large scale production and sold on store shelves along side Sam Adams Brewing the American Dream Micro-loans to financially-disadvantaged small business owners Corporate Strategy
22. Brewery Acquisition June 2008, Boston Beer acquired Pennsylvania Brewery from Diageo Core product volume at company-owned breweries increased from 35% to 95% Significantly higher capital costs, change in leadership and execution style Greatly reduces risks, increases flexibility, and reduces operational savings Recent Alliance
23. Infinium Strategic Alliance with Weihenstephan Completely new ultra-premium beer Weihenstephan Oldest Brewery in the world - 1000 years World’s largest brewing university Owned by Bavarian government Reached out to Sam Adams to deliver the world’s most premium beer Strategic Alliance Recent Alliance
24. Related Diversification Economies of Scope Germany and USA Sharing Marketing/Promotion activities Pooling brewing knowledge German Reinheitsgebot ADDING Value Framework Recent Alliance
26. Ownership Test for Strategic Alliance Modular Soft Medium Medium Low Solution: Strategic Alliance Recent Alliance
27. Challenges Challenges New market for ultra-premium beer Profitable? Accessible? Brand awareness Not directly associated with Sam Adams Competitor response Recent Alliance
28. Foreign Sources Two-row wheat barley in malt United States and Canada Noble hops varieties in lagers Germany and Czech Republic Traditional English hops in ales United Kingdom www.naturaltraveler.com International Markets
29. Implications Dependent on a limited number of foreign and domestic suppliers Operations exposed to quality of crop and timely delivery of dealers Subject to risk of Euro or Pound fluctuating against the U.S. dollar Do not currently hedge forward currency commitments Cannot easily switch suppliers Quality of product and reputation of company is dependent on ingredient sourcing International Markets
33. Second Dimension: What Sequence? High Strategic Importance of the Market Low Low High Ability to Exploit Market International Markets
34. Third Dimension: How? LEVEL OF INFLUENCE AND CONTROL Wholly-owned subsidiary Joint Venture Licensing or Franchising Export ENTRY MODE International Markets
35. Current International Cooperatives Canada Moosehead Breweries Ltd distributes the Samuel Adams family of beer in Canadian markets Israel Tempo Beverages LLC Pacific Rim: Australia, Hong Kong, Japan San Miguel Corporation (acquired J Boag and Son, exclusive distributor of Samuel Adams in Australia) Caribbean Mexico International Markets
36. Current International Cooperatives Europe UK Beer Paradise Ltd Germany Weihenstephen Brewery Scandanavia (Norway, Sweden, and Finland) Galatea AB Dr. Joseph Schrädler and Jim Koch. http://www.washingtonlife.com/2010/06/16/wine-spirits-to-infinium-and-beyond/ International Markets
50. Greater quality controlVertical Integration – Decreased Involvement with Third Parties Core product volume brewed at independently owned breweries increased from 35% to 95% from 2007 to 2009 Evolution of Strategy
58. The company is aiming to reinforce that Sam Adams is truly a boutique craft brewer that is unique and special, and not mass-produced.Corporate Strategy