Boag's
Australia is considered to be a major beer drinking country, something that has traditionally provide a robust market for producers. Inter-state trade barriers have allowed for brewers in each state to flourish, something that benefitted James Boag, with its small domestic market in Tasmania. Boag's was able to use this strength to support its expansion endeavours, which ranged from the rest of Australia to as far away as the United States (Gale Group, 2004). The company faces some major challenges in the environment, including a social trend away from industrial beer, something that is forcing breweries both in Australia and around the world to seek out new opportunities. There are opportunities out there, however, a function of globalization and the information economy that increases the ability of companies to expand overseas and lowers the costs associated with marketing and market entry when they get there.
Social Environment
There are a number of trends in the Australian beer market that are determining the course of competition. The first is within the social environment, as Australians are reducing their beer consumption. Fenner (2010) argues that the tastes of Australian consumers -- particularly of those traditionally felt to be part of the beer market -- has eroded the size of the market for domestic beer. The working class roots of the beer market, which helped drive the sales of brands like Victoria Bitter (Gluyas & Speedy, 2011), has turned to lesser beverages like pre-mixed spirit drinks and cheap liquor (Fenner, 2010).
The general decline in the beer market represents a significant challenge for all brewers, Boag's included. The response of some brewing companies has been to diversify into wine, though such strategies have not always been a success (Gluyas & Speedy, 2011). But with beer sales at a 60-year low per capita (Thomson, 2010), Australian brewers need to find ways to boost the market overall and counter this social trend. A brewery like Boag's can sell to international markets, but those sales will never counter soft sales at home, especially if those soft sales extend to the Tasmanian beer market.
There are a number of different approaches that can counteract this decline,...
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