lagunitas presentation
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LAGUNITASBREWING CO.Contributors:Meshal Alkhowaiter. Erin Hasenkamp. Jacqueline Jerez. Daniel Shamany. Gustavo Tolentino.
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Overview• Case Summary• Additional Information• Assumptions• External Factors• Internal Factors
• Major Issues• Major Players• Central Problem• Solutions
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1993: Tony Magee creates Lagunitas Brewing Company1994: Moved to Petaluma, CA
1996: Grew from 600 to 10,000 barrels
1997: Financial crisis led to closing of breweries
1998: Lagunitas raised $650,000
2000: Increased debt pushed for growth
2007: Maximum capacity was reached
2008: Magee anticipated 10 years for maximum capacity2012: Announced plans for new Chicago facility
Summary
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Additional Information• Financing Sources During Expansion
• Lack of Financial Statements
• Supplier Information is Needed
• Lack of Information Regarding Creditors
• Human Resources
• Concentrated Growth Strategy
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Assumptions• Founder’s Ability to Run the Company
• Lagunitas Ability to Meet Its Obligations
• Lagunitas Identified a Niche Market
• Competitors are Far Larger than Lagunitas
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External FactorsRemote Environment
• Lagunitas Initially Financed Growth Internally
• Synonymous with Music
• Wastewater Issue
• Incurred Fines Due to Wastewater
• Installed New Equipment for Wastewater Reduction
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External FactorsIndustry Environment
Large Number of Rivals
New Entry is Easy
Threat of Substitution is
High
Supplier Power is
Non-ExistentBuyer Power is Very LowPorter’s Five Forces
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External FactorsOperating Environment
• Competitive Position
• Customer Profile
• Suppliers
• Creditors
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Competitive Position
• Secret is in the Recipe
• Product Quality is Important
• Sales to Restaurants and Bars
• Lagunitas is Attractive Financially
• Outgrowing Capacity
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Customer Profile
• Brand Loyalty in Chicago, Petaluma, North Carolina
• Music Lovers
• “Fueled by Lagunitas”
• Buyer Habit Metrics are Needed
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Suppliers & Creditors
• Optimal Supplier Relations are Essential
• Supplier Information Non-Existent
• Who are Lagunitas’ Creditors?
• Creditors Claim on Assets
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Strengths Weaknesses ThreatsOpportunities
Internal EnvironmentS.W.O.T. Analysis
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Internal Environment Value Chain Analysis
PRIMARY ACTIVITIES:• Operations• Outbound Logistics• Marketing & Sales
SUPPORT ACTIVITIES:• Research• Technology• Systems Development
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Internal Environment R.B.V. Analysis• Opportunities at Chicago Production Facility• Chicago Location• Unique Beer Recipe• Standard Resources, Unique Process
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Year Capacity Revenue Expenses % Total
Revenue Net Profit Profit Margin*
2008 57,420.0 $12,900 $12,305 95% $595 4.6%
2009 72,420.0 $17,100 $16,537 97% $563 3.3%
2010 101,420.0 $24,600 $23,100 94% $1,500 6.1%
2011 165,420.0 $39,700 $37,963 96% $1,737 4.4%
2012 235,420.0 $59,000 $55,893 95% $3,107 5.3%
2013 400,420.0 $105,000 $96,500 92% $8,500 8.1%
Internal EnvironmentFinancial Ratio Analysis
*Profit Margin = Net Profit ÷ Sales Revenue
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Major Issues• No Clarity and Consistency of Values and Objectives
• Difficulty Obtaining Stable Source of Funding
• No Clear Expansion Plan
• Production Waste
• Marketing Over-Dependent on Word-of-Mouth
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Interrelations of Major Players• Downturn in Beer Industry (1997)
• Economic Recession Limited Lagunitas’ Growth (2008)
• Aftermath of Recession was Favorable
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Lack of Consistent Vision, Mission and Strategy
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Solutions• Hire a Consulting Company• Seek Outside Investors• Sell Shares to an Established Competitor• Create a Joint Venture
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“ Vision without action is a daydream. Action without vision is a nightmare.
” — Japanese Proverb
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