Business Strategy and Leadership

Topics: Beer, Alcoholic beverage, Brewing Pages: 4 (901 words) Published: May 26, 2013
2.1 Rivalry among Established Competitors
As one of the major beverages Ltd in Australia, LWB is facing to different level of competitions due to the product attributes. There are three top competitors in Australia as follows: Foster's Group Limited,Lion Nathan Limited, and Coopers Brewery Limited(Company Analysis 2011).In related to international market, LWB also need to compare the local companies in those countries such as Tsingtao Brewery Ltd in China. It is importantto gain the competitiveadvantages to achieve their target in overseas market. The growth rate of earning per share in food, beverage &tobaccoindustry is10.12% in 2011(Table 2).TheFoster and Lion Limited occupy the large proportion of beer industry in Australia, however LWB just holds1% percentageand owns $228million in market cap in the whole beverage industry(Table 3).Another point should be mentioned is that switching costs of beer are low, so customers can easy to choose their propensity with different beerswhich leads to the price competition is encouraged for firms.Based on the points above, the level of competition in existing firms is relatively high.

2.2 Threat of New Entrants
The companies in beverage industry are almost large economies of scale, new entrants always hard to get into that industry directly.LWB has a long history of operating a brewery and packaging facility, also LWB’s beers have won a large number of significant awardsboth in domestic and international market under the good reputation in beer area (LWB 2010). According to the legal barriers section, the beer industry has the limitation about licensing regulations. So, it is not easy to enter beer industry legally. It can be concluded that the degree of competition in threat of new entrants is low.

2.3 Threat of Substitute Products
Competition among beers is with national, regional, and local brands, and imported brews. Competition also comes from other...
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