Firestone Walker (Firestone for short) Brewery is a brewery located in Central California. It controls less than 1% of the market share and does not try to compete directly with the Big Three Brewers (Anheuser Busch, Miller and Coors). Instead, they are content to brew beers that niche beer drinkers prefer, mainly Pale Ales, IPAs and other “hoppy” beers. This “craft beer group makes up less than 3% of the beer market but it is a fast growing group with a low cost of entry and a friendly competition amongst the various breweries across the country.
Character of Rivalry:
The character of rivalry is that there is neutral. There is a lot competition, however, Firestone chooses to coexist in the craft beer industry and as there are plenty of tap handles and not much fighting among the different breweries. Firestone feels that when there is fierce competition the brewery falls apart so they focus on making the best quality beer and relying on the public to make their choice based on that principle. Firestone uses various beer styles to meet consumer preferences.
Threat of New Entrants:
The threat of new entrants is moderate. Some of Firestone Walker’s most notable competitors are Stone Brewery located in Escondido, Sierra Nevada located in Chino, and Speakeasy Brewery located in San Francisco. These breweries have a lot in common, and are after the same customers. While home brewing and brewing in general has a low cost of entry, brewing at the craft beer level takes a moderate investment in money and talent making it so that not everyone can get into the business and the chance of profits are not always guaranteed. What Firestone Walker does is promote heavily in its locality, namely the 805 area code, building brand loyalty. In fact to encourage this, Firestone created the 805 beer along with the assorted merchandise.
Bargaining Power of Buyers: