The movie the “The Beer Wars” introduced us to competitive conditions in the beer industry, which we discussed in class sessions 2 and 3. Since the movie was made, the two biggest beer companies merged: In 2016, Anheuser Busch (owned by a holding company Inbev) merged with Miller, to become the largest beer company in the world, significantly increasing their market share in the US and abroad.
In this reflection, use the five forces framework to discuss how the merger of Anheuser Busch and Miller might affect the competitive landscape in the United States beer industry, as follows:
- First, use the five forces to identify key players in the beer industry value chain, adding entrants and substitutes. Place brewers as the focal business, and identify the players that fall into each of the five forces with respect to the focal business: suppliers/buyers/rivals/entrants/substitutes. Bullet points for each group are fine. In identifying the players, it’s preferable to use business categories (e.g. “large brewers”, “craft beer”) rather than specific company names.
- Select two of the most important changes to Barriers to Entry that you would expect to occur after the merger, and discuss how the merger could affect each of them. Focus on those barriers to entry that are most likely to be affected by the merger.
- In your view, is the threat of substitutes likely to increase, decrease, or be unaffected by the merger? Give a brief explanation for your answer.
- Pick one other force, and discuss how the merger is likely to change the power of that force. If you wanted to measure the effect you describe, what data would you collect to test your prediction
Assessment will be based on:
- Ability to identify players in an industry, using the five forces framework, and reflecting our classroom discussions
- Demonstration of learning the Five Forces model as developed in reading, lectures and in-class discussion. Your answer should demonstrate learning from all three of these sources.
- Understanding of the nuances of how competitive forces operate in an industry value chain
- Selection of the most important effects and examples
This reflection is not a research project: you do not need to bring in additional or specific information about the merger from outside sources. The assignment is designed to present a change in the competitive conditions of an industry we have discussed in class, so that you can demonstrate your learning and knowledge of the five forces framework as developed in the readings, lectures, and in-class discussions.
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