Beer: Launching A Lebanese Brewing Company
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961 Beer has a fascinating history which illustrates to aspiring entrepreneurs that with hard work and determination, even crazy business ideas are able to succeed. At a time when building were being destroyed and the city of Beirut, Lebanon was in shambles, the founders of 961 Beer decided to move forward with founding Lebanon’s first craft brewing company – a surprising fact because this region of the world begin the tradition of brewing beer. As discussed below within the framework of a SWOT analysis, several factors contributed to the success of the company, and will play an integral part in the company’s future as it expands to meet demand. SWOT Analysis
A SWOT analysis is meant to drive a company into meaningful action to capitalize on its strengths to seize opportunities as well as protect itself from outside threats or internal weaknesses.
961 Beer is fortunate in that it benefits from several internal strengths. Organizationally, the company is simplistic: with few employees and condensed management, the company is able to benefit from the strong direction of a select few. In addition, the few people involved, particularly Hajjar and Henrik, have a passion for food and drink and enjoy the process of providing high quality wine to their customers. In addition, with less “baggage” the company is able to quickly innovate and adapt to changes in the customers tastes. Hajjar is also very passionate about food and wines of the region, leading to his dedication to the success of 961 Beer. He provides leadership that focuses more on the product itself, in order to ensure that it will be a beer that the Lebanese will be proud off. As a recent CEO, Hajjar also appears to bring a substantial amount of capital to initially invest in the business. However, money runs out quickly, and now 961 Beer must pay for itself.
The 961 Beer product line also has several strengths. The beer is of high quality because it was produced using only fresh ingredients and in small batches. The company is able to produce several new beer styles, and it heavily uses Lebanese products in brewing its beer. This gives 961 Beer a unique advantage over other beer options, and it attracts customers who are looking to try something new, all while support Lebanese products. Several areas of marketing also have specific strengths. 961 Beer was able to coin the catchphrase “Are you resistant to change?” which took off in a time when the country was suffering from the effects of war.
“Change” is a simple idea that is very popular in a downtrodden country, and by associating itself with such a concept, 961 Beer is able to appeal to a large group of potential customers. To further this concept, the packaging is deliberately “under-designed” and meant to be seen as simplistic, pure, and natural, which will attract customers interested in such aesthetic characteristics. The pub is also strategically placed in Beirut’s bustling nightlife scene. This helps to increase 931 Beer recognition and build brand loyalty among new customers. The pub also helps to provide as a gathering place for people to come and education themselves about the brewing process and try various types of beer.
Like most entrepreneurs, 961 Beer was started by founders who had very little idea of what they were doing. By trial and error, Hajjar was able to brew batches of beer in his kitchen for several months until the beer began to improve. Although
Organizationally, the company is operating at capacity and is simply unable to produce any more for its additional customers. Also, it does not appear that 931 Beer is able to adequately predict how much demand is set to grow.
Because the company is still new, there is little money for expensive advertising. This means that customers will be less mainstream, and more trendy, with the ability to follow the latest trends on the internet.
961 Beer is the first craft beer in Lebanon in recent memory, even though
Lebanon has a history in beer brewing.
Education of customers leads to a fun, exciting experience that allows customers to “experience change” by trying more types of 961 Beer. This opportunity to provide a personal touch will give customers a lasting positive impression of 961 Beer. Personal interaction with customers allows the company to collect feedback on its beers and make adjustments.
Customers are interested in supporting companies that heavily use Lebanese products. Particularly when the country is plagued by war, providing people the opportunity to work and be part of 931 Beer is a great way to create loyal customers.
Advertising on social media is an effective way of reaching the younger, trendier crowd that is more along the lines of who is frequenting the bars and drinking on a regular basis.
Clearly, the colossal threat to the company’s survival is the place of its headquarters. Lebanon is routinely in wartimes, and has been through several wars with neighboring countries ever since 961 Beer began in 2006. Unfortunately, visitor levels to the 961 Bar decrease when conflict increases, which makes sales plummet.
The competitive environment is monopolistic. The local beer market was monopolized by Almaza, which was acquired in 2002 by Heineken. In total, Heineken controlled about 70% of the local beer market at the time 961 Beer was founded. With so much power, Heineken has pricing power that 961 Beer cannot match.
Other bars became more reluctant to sell 961 Beer because the bar was seen as a threat to their own business. 961 Beer will need to befriend these bars and show them that the bars can enjoy more success by joining 961 rather than going against them.
Many customers are not accustomed to drinking anything besides commercially processed, mass-produced beer from large competitors. This means that 961
Beer must educate their customers about the different types of beers and convince them to try 961 Beer. Evaluation Plan: Expand outside of Lebanon
Based on the analysis performed above, it is clear that 961 Beer must expand out of Beirut, Lebanon in order to remain successful. While this will increase the risk of lesser quality or require the use of non-Lebonese products, expansion is required to ensure the company’s long-term success. Several steps must be taken before the expansion, all while 961 Beer continues to grow business in Beirut and manage bar operations. First, 961 Beer must address its capacity issues. 961 Beer seems to have had some difficulty in predicting the amount of beer it needs to brew in order to meet the growing demand. An analysis of their books will be helpful to garner a better idea of what demand will look like in the future, accounting for their company’s growth rate. Next, 961 Beer needs to establish relationships with businesses in neighboring cities and countries. Bottling and shipping beer from Lebanon is unrealistic with high likelihood of war, so 961 Beer will need to establish microbreweries within these other locations. Quality can still be maintained by ensuring that Lebanese ingredients are still used in the brew, but costs can be recuperated by charging customers in those countries a higher premium for the same beer.
Finally, 961 Beer needs to join international beer festivals in other countries in order to garner worldwide interest and to further increase recognition and demand among worldwide customers. There are several major risks that could undermine this plan for expansion. Clearly, the largest threat to 961 Beer is the ongoing threat of war in Lebanon and neighboring countries. Unfortunately, there is little to nothing that can be done to stop this threat. Without expanding into other countries, a war in Lebanon could wipe out the entire company. However, as discussed above, 961 Beer can minimize this risk by establishing separate microbreweries in other countries so that there is no single source where 961 Beer is brewed. Nonetheless, establishing other microbreweries increases another risk: the risk of uneven and unequal quality. 961 Beer can lessen this risk by brewing its “brewmaster’s select” along with seasonal beers to appeal to customers in the new countries.