McAuslan Brewing Co.

Future strategy:

After careful analysis of the case, several alternatives can be taken in order for the company to remain not only profitable, but also a leader in the microbrewery market. As the beer industry is said to increase steadily by 1-2% on an annual basis, the company should be prepared to expand accordingly to satisfy consumer demand. Though McAuslan was the first microbrewery of its kind in the Quebec region, they did not manage to attain first mover advantage due to a lack of economies of scale and scope. As the company grew larger at a steady rate, revenues significantly increased, but profits decreased exponentially. This phenomenon occurred mostly due to an increase in ‘sales and promotions’, which resulted in higher sales revenues and market share, but the increase in the cost is not proportional to the increase in revenues. The per dollar gain of their marketing strategy can be vastly improved by reaching out to new market segments.

In order to remain profitable and increase its market share, McAuslan would be advised to create more reciprocal ties and outsource production to different plants nationwide. This would allow them to have a greater customer outreach while maintaining overhead costs and as a result, have higher sales while reducing transportation costs. This will ultimately lead to a much greater profit margin and higher revenues.

Another suggestions would be to reformulate its organizational chart to create a hierarchical chain of command. This would create a clear division of labor, and transform the company from a “family company” to a small business enterprise, which will decrease administrative costs while making procedures more