AD715 Boston University Launching Microbrewery Service Questions

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Business Finance

Boston University

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Read the business running case "Investing in a New BrewPub?" and review the Tutorial for AD715: Business Simulation "Strategies and Decision Support in Organizations". To understand how the microbrewery industry works, read the case "Hockley Valley Brewing Co. Inc."

only need 150 - 250 words.

Discuss one or several of the following questions:

  • What implications can be drawn for the launch of a microbrewery service?
  • Evaluate the proposed new draft beer products (business running case, attachment 1) and discuss important factors to be considered in the process of selection of the successful combination of existing (offered by other breweries) and the new (in-house made) products.
  • At what price should the new products be sold? Why?
  • Evaluate the placement alternatives (in-house and through local wholesalers), including the sales needed to break even for the new microbrewery.
  • What distribution strategy do you recommend for the new microbrewery unit?
  • Design a promotion strategy for the new draft beers. Include how the restaurant owner should advertise and what message she/he should convey.
  • In preparation for your Assignment 3, explain your initial plan for selection and application of decision support tools and methods.

Unformatted Attachment Preview

Business Running Case: Investing in a New BrewPub? (Conceptual Study by the Owner) BU MET AD715: Quantitative and Qualitative Decision-Making © 2012 Professor Vladimir Zlatev AD715: Business Running Case – New BrewPub? 1 OUTLINE New BrewPub: Starting Points Conceptual Study: Starting Points AD715: Business Running Case – New BrewPub? 2 New BrewPub: Starting Points The owner of an existing restaurant/tavern operation is considering opportunities to increase (locally) the competitiveness of the company by investing in a new technology for in-house brewing (BrewPub) of high quality non-posteurized beer (craft beer) After a thorough evaluation of a broad spectrum of offers, the owner selects a proposal for a capital project with the following starting parameters System Characteristics of the BrewPub :  Turn-key system (brand-new equipment) for brewing of two types of beer: (i) Pilsner All-Malt Beer (ii) Bavarian Lager All-Malt Beer  Two possible forms of distribution of the beer: (i) craft beer(for direct sale in the existing restaurant/tavern, measured in pints) (ii) in kegs (1 keg = half barrel = 15.5 gallons = 124 pints) ; 1 pint = 16 oz = 474 ml NEXT AD715: Business Running Case – New BrewPub? 3 New BrewPub: Starting Points System Characteristics of the BrewPub (continued):  Annual production capacity of a 10 bbl (12 hectoliters) BrewPub System , based on:  one bbl = brewer’s barrel = 31 gallons = 117.4 liters = 1.174 hectoliters  two week production cycle ales  50 week work year  ten fermenter tanks, called fermenters (capacity 10-hl/fermenter) Capacity/fermenter = 10,000 liters x 25 batches = 25,000 liters/annually Capacity/fermenter x 10 fermenter = 250,000 liter/annualyl  five serving tanks (capacity 4 hectoliters per serving tank)  Annual system capacity = 234,608 l/ann = 496,000 pints/ann = 4,000 kegs/ann  Production personal:  one beer master  two workers NEXT AD715: Business Running Case – New BrewPub? 4 New BrewPub: Starting Points System Characteristics of the BrewPub (continued):  Training program for:  production personal  sales force  manager of the business unit (the owner of the BrewPub)  Access to ‘qualified material suppliers’  Service & maintenance contract (first 12 months included in the price)  Offered final price for the package: $150,000  Option: Financing through a private financing institution is available AD715: Business Running Case – New BrewPub? 5 Conceptual Study: Starting Points The owner of the existing restaurant/tavern :  owns the space needed for the new project, but has to rent additional 200 ft2 for the wholesale operations (selling of kegs)  would like to separate the new operation from the existing business in the restaurant/tavern and is planning to manage it as a separate business unit, fully controlled by the existing company  Is preparing a database with all market and product related information AD715: Business Running Case – New BrewPub? 6 Conceptual Study: Starting Points Before confirming/rejecting the offer, the owner would like to prepare a conceptual study, structured as a managerial report, that will address the following questions: 1. Overall goals and objectives of the new business unit 2. Business strategy for the next three years of operations of the BrewPub 3. Functional strategies: Marketing, Innovation, Operations, Organization, Finance 4. Evaluation of the proposed strategy and plans based on selected critical success factor and key performance indicators 5. Implementation plan (actions and resources) 6. Summary of the results 7. Deciding whether (i) to accept the offer, or (ii) to redefine the starting parameters of the initial request for quotation and to request a new quotation (based on the new starting points discussed in the conceptual study), or (iii) not to invest in a BrewPub at all The conceptual study will be prepared with the help of a business simulation package, called ‘Strategies and Decision Support in Organizations’ AD715: Business Running Case – New BrewPub? NEXT 7 AD715: Business Running Case – New BrewPub? 8
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Running head: IMPLICATIONS OF LAUNCHING THE MICROBREWERY SERVICE

Implications of Launching the Microbrewery Service
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IMPLICATIONS OF LAUNCHING THE MICROBREWERY SERVICE

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Implications of Launching the Microbrewery Service
The launch of the microbrewery service would have a number of implications on the
business. Investing in the new in-ho...


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