Situational Analysis for Hockley Valley Brewing Co. Inc.
Hockley Valley Brewing Co. Inc was established in 2002 and rose to popularity with the introduction of Hockley’s Dark in 2004. Having further expanded to different products, Hockley has been performing quite successfully. Recently, however, Hockley’s management team has become unsure of its product mix and strategic focus due to the sudden drop in sales for what used to be the most popular brands. Below is the OTSW/SWOT analysis.
Strengths
Hockley has built a loyal customer base
• The owner, Tom Smellie has brought recognition the small village of Orangeville in which it operates, and therefore, Orangeville residents have always been supportive of the local brewery
Hockley has developed …show more content…
• Mill Street Brewery and Steam Whistle produce and sell beer at a much larger scale than Hockley
• It would be difficult to enter to the mainstream light beer market as they lack a competitive edge
Hockley is facing increased brewing time and higher production costs
• The production of lager requires a considerable increase in brewing time, and a 50 per cent rise in production costs, which is detrimental to Hockley’s profitability
Hockley is over-reliant on one distributor, the LCBO
• Hockley has limited distribution channels and retail outlets
• Most of Hockley’s beer is distributed through the 50 LCBO retail locations with minimal sales in its brewpub storefront, while its competitors are situated in its own brewpub, the LCBO, as well as popular locations such as airports, CN Tower, and the Rogers Centre
Opportunities
Growing trends and potential markets for microbreweries
• The community of craft beers appreciators is changing as they now demand more variety in flavours, freshness, and higher quality of beer
• Hockley has the qualifications to become the banner brand by pursuing this light lager market and satisfy changing consumer tastes
Lack of dominant competitors in the new, potential light lager …show more content…
Threats
While growing trends and potential markets for microbreweries is an opportunity, it is also a threat
• Changing consumer tastes and preferences can lead to lost customers
Increased competition if promoted as a mainstream lager
• Competitors are in the segment of light bee such as Mill Street and Steam Whistle have strong brand names that could develop new and expensive marketing campaigns
Established presence as the producer of the “Best Dark Ale” in Ontario
• Hockley has been known for its dark beer for over ten years, thus it is possible that by changing its major line of beer, Hockley might lose its customers and brand identity
Implications
1) Consumer demands and preferences is shifting, and it could have negative implications for Hockley if it does not adapt to the changing market
2) Hockley has been very successful with its dark beer in the past, but to further its growth, it can expand the business through new market development
3) Hockley’s strong, dependable relationship with the LCBO is both a strength and a weakness
4) Despite these points, Hockley is undoubtedly a major player in the field with an exceptional management team and loyal customers, which is beneficial to their expansion of the
Hockley Valley Brewing Co. Inc was established in 2002 and rose to popularity with the introduction of Hockley’s Dark in 2004. Having further expanded to different products, Hockley has been performing quite successfully. Recently, however, Hockley’s management team has become unsure of its product mix and strategic focus due to the sudden drop in sales for what used to be the most popular brands. Below is the OTSW/SWOT analysis.
Strengths
Hockley has built a loyal customer base
• The owner, Tom Smellie has brought recognition the small village of Orangeville in which it operates, and therefore, Orangeville residents have always been supportive of the local brewery
Hockley has developed …show more content…
• Mill Street Brewery and Steam Whistle produce and sell beer at a much larger scale than Hockley
• It would be difficult to enter to the mainstream light beer market as they lack a competitive edge
Hockley is facing increased brewing time and higher production costs
• The production of lager requires a considerable increase in brewing time, and a 50 per cent rise in production costs, which is detrimental to Hockley’s profitability
Hockley is over-reliant on one distributor, the LCBO
• Hockley has limited distribution channels and retail outlets
• Most of Hockley’s beer is distributed through the 50 LCBO retail locations with minimal sales in its brewpub storefront, while its competitors are situated in its own brewpub, the LCBO, as well as popular locations such as airports, CN Tower, and the Rogers Centre
Opportunities
Growing trends and potential markets for microbreweries
• The community of craft beers appreciators is changing as they now demand more variety in flavours, freshness, and higher quality of beer
• Hockley has the qualifications to become the banner brand by pursuing this light lager market and satisfy changing consumer tastes
Lack of dominant competitors in the new, potential light lager …show more content…
Threats
While growing trends and potential markets for microbreweries is an opportunity, it is also a threat
• Changing consumer tastes and preferences can lead to lost customers
Increased competition if promoted as a mainstream lager
• Competitors are in the segment of light bee such as Mill Street and Steam Whistle have strong brand names that could develop new and expensive marketing campaigns
Established presence as the producer of the “Best Dark Ale” in Ontario
• Hockley has been known for its dark beer for over ten years, thus it is possible that by changing its major line of beer, Hockley might lose its customers and brand identity
Implications
1) Consumer demands and preferences is shifting, and it could have negative implications for Hockley if it does not adapt to the changing market
2) Hockley has been very successful with its dark beer in the past, but to further its growth, it can expand the business through new market development
3) Hockley’s strong, dependable relationship with the LCBO is both a strength and a weakness
4) Despite these points, Hockley is undoubtedly a major player in the field with an exceptional management team and loyal customers, which is beneficial to their expansion of the