Hudepohl Case Study Final
Hudepohl Brewing Company
Industry Analysis: Economic Trends
At the time Bob Pohl was appointed general manager of the Hudepohl Brewing Company in 1980, there were six big firms within the brewing industry selling 82% of the beer. These leaders shared common characteristics of being vertically integrated, operating large scale plants, advertising heavily, mostly distributing through independent wholesalers, and possessing sufficient funds for more aggressive future growth plans. However, there were varying degrees of firm capabilities found within five cost components: raw materials purchasing, production, labor, packaging, general and administrative …show more content…
Industry Changes and Problems for Hudepohl
The industry has changed over time as labor has been able to demand and receive higher wages with the help of unions. The larger breweries have been okay with offering higher wages as they had invested in capital intensive equipment making it so they did not need as many employees as the smaller breweries still needed. Industry distribution practices also changed as the larger breweries only distributed a small percentage of their beer directly to retailers. Another change to the industry was that marketing strategies became more aggressive in a traditionally conservative industry. Traditionally marketing strategies were targeted at only two target audiences, males who drank popularly priced beers and males who drank premium priced beer. During the 1970’s beer companies began advertising to women and premium priced beer. Draft sales dropped dramatically, and Sunday beer laws relaxed making it easier to sell beer from convenience stores on Sundays.
The brewery industry has become increasingly concentrated over time in part because of the economies of scale in the production, distribution and marketing of beer. The larger breweries were able to produce more beer at lower costs because of the adoption of automation and new brewing practices. The