Expanding Hockley Valley Brewing Co.: A Case Study of Growth Strategies - Essay Sample

Introduction

Often, most organizations are in a look at how they can enhance and expand their businesses. The paper examines Hockley Valley Brewing Co., Inc, which is a brewery company located in Canada and owned by Smellie and Kohnen (Dunn, 2014). Hockley is also looking for ways the company can expand and grow. Owners of the company are in a dilemma on which products to launch and how they should be promoted. Hockley Valley Brewing Co., Inc being the main focus, the paper will answer some questions regarding the company.

Q1. External Analysis

There are many ways a company can get affected, and often, it may go out of control. However, with an external analysis, the company may try to stay on top of trends and events in the industry. The brewery owners understand their business. For instance, in the external new launch of the beer, Smellie finds it hard to decide on the prices of the product (Wagner, 2016). However, Smellie makes an effort to market the new Hockley Classic beer by setting aside a certain amount for the advertisement. Although the decision on pricing may affect the Hockley's Classic product, the external view of it is that the brand should be priced a little bit higher. Pricing it at $2.55 may be a bit low considering its quality (Hall, 2014).

Additionally, there is a need for Hockley Valley Brewing Co., Inc in evaluating its competitors. Launching Hockley Classic, the brand is likely to face direct competition from two biggest companies; Mill Street and Steam Whistle breweries. According to Hockley, they see their great success through large sales of the product during the 150th-anniversary celebration at Orangeville (Wasserman, 2015). Also, they believe that Hockley Classic can outdo their biggest competitors.

Q2. Corporate Capability Analysis

The capability of a corporate is a determination of what a company can be able to perform. It is the ability of a business to transform something that assists in goal achievement. Hockey valley brewery can provide the necessary structure for stakeholders like scope and context so that the company can be able to make effectual organizational objectives. Also, it can improve core businesses values that forms part of the value chain. Importantly, launching of the new product, Hockey Classic, can ensure the company meets its goals and objectives. The implication of this is that the company may receive competition from top selling light beers like Mill Street Brewery and Steam Whistle. As a result, the company may have a new experience that will challenge them in making good decisions reduced coast and improved customer service.

Q3. Proposed New Product

With Hockley Classic, the company can be able to meet what consumers are into. On the other hand, a lot of thoughts are also needed. For most companies, introducing new brands and services to the existing ones can be vital in unlocking growth in the right standards. Therefore, there is a need for Hockley Breweries to assess the amount of money to be spent on the product, if there will be a product's success, and if the profit of the brand will be more compared to the amount spent producing. According to Hall (2014), launching a new brand in the company is like starting a mini-business inside a parent one. As a result, it requires a lot of time, plans, and projections, just like any new business. The owners of Hockley Valley Breweries understand that their launch of the new brand will require a higher production rate. To solve this, there is a need for them to retire one of their beers to help the production prices not to intensify, thus enabling easy placement in the stores.

Q4. Prices of Hockley Classic

In almost all businesses, properly pricing of products is the biggest secret to most firms. In the case study, the prices of Hockley brewery ranges between $2.55-to-$2.75 per can (Dunn, 2014). Just like other beers, direct costs for Hockley Classic is the same, but the production costs are 50% higher, bringing it to $1.62 per can. Hockley Valley Brewery is likely to make $.93 in revenue per can if it can stick with the recommendation of LCBO of selling $2.55 per Hockley Classic (Hall, 2014). Therefore, Hockley Classic must sell at higher prices, unlike other beers, since the brand takes longer to produce with lots of money needed.

Q5. Hockley's Placement Alternatives

When it comes to advertisement placement, there are various alternatives for Hockley Valley Breweries. The advantage is that they have a shareholder who owns a newspaper company; hence Hockley breweries can make their advertisement without any pay. Although the estimate for publication that was built across the rural communities of Ontario reaching over 100, 000 homes every week approximated over $200,000 annually, Hockley Breweries did not pay any amount for that (Wagner, 2016). Since the company is not spending on any advertisements, the owners can save over $50,000 budget for ads. As a way of promoting, Hockley Breweries are in want of informing their farmers to wrap their hay. This is important in advertising the Hockley brands in rural areas as those driving along those routes can see the ad. Having a look at Exhibit 5, investing in a billboard can be beneficial as they can be put in both high and low traffic site (Dunn, 2017). With billboards, new potential consumers can be attracted, especially those that wouldn't have located the company with just bales of hay. Also, billboards are used in targeting larger cities where potential consumers are.

Conclusion

Hockey Valley Brewery is a company that has been fruitful in the beer industry. To be updated on what is trending amongst the consumers, Hockey Valley Brewery has launched a new beer, Hockley Classic that meets the demand and trend of the consumers. As a result, the company has been able to stand higher amongst its competitors.

References

Dunn, I. (2014). HOCKLEY VALLEY BREWING CO. INC. Richard Ivey School of Business Foundation.

Hall, T. (2014, June 21). Four things to consider before adding new products to your business. Retrieved from Creator: https://www.wework.com/creator/personal-profiles/4-things-consider-adding-new-products-business/

Wagner, N. (2016). An External Analysis of the Company. Retrieved from Chron: https://smallbusiness.chron.com/external-analysis-company-71031.html

Wasserman, E. (2015). How to Price Your Products. Retrieved from Inc.: https://www.inc.com/guides/price-your-products.html