Milestone 2 Implementation

Abstract

Recently, Anheuser-Busch acquired multiple breweries across the United States to assist in the entry to the craft beer market. This process of acquiring breweries is expensive, but the goal is of any beverage maker is to sell their product at the highest price possible. If Anheuser-Busch was able to develop and sell their own craft beer, it would sell at a higher price than their existing beer lineup but be at a lower cost than purchasing an established business. The new beer to develop would be an American style India Pale Ale or American IPA. It could be marketed towards millennials and women. “Millennials are people, who are between the ages of 18-34, and women only account for 25% of the craft beer population (Herz, 2016).” Anheuser-Busch can use their existing market presence to help penetrate the new market with this new beer. After all the recent acquisitions, Anheuser-Busch has the ability, buying power and knowledge to push this endeavor forward. “According to Andy Goeler, CEO of craft for Anheuser-Busch, craft beer right now, it’s playing a very important role in the industry, and while around 80 percent of consumers still enjoy and drink domestic large lagers, the craft piece of the business is really growing (Rotunno, 2015).” If Anheuser-Busch is to survive in this niche market, the newest acquisitions and the new product in development needs to help sell more beer at a higher rate than their normal domestic beer.

Business Implementation

 There are several elements needed in putting a business plan together. A few items to highlight are the implementation of technological advancements to integrate, an implementation plan, a project review process, and the inclusion of intrapreneurship and entrepreneurship thinking.

Physical and Technological Resources

In researching the needs for Anheuser-Busch’s business plan a decision needs to be made where the beer will be brewed. The benefit of all the Anheuser-Busch breweries is they are scattered all over the United States and they have their own distribution system. This will allow for the beer to be stocked on shelves quicker, fresher and allow to be more profitable. Anheuser-Busch has 13 breweries from New Hampshire to California which helps accomplishes the quick distribution of the new beer to the local shops.

The equipment for the locations is being evaluated on a buy versus rent analysis to determine the most cost-effective use of funding. Because there are 13 locations, the new equipment should be pleased with service agreements which will help provide replacements and reduce downtime.

Implementation Schedule

The implementation schedule for Anheuser-Busch has based their recent actions of purchasing multiple craft breweries over the last 10 years. The strategy has been for Anheuser-Busch to increase their market share in the craft beer demographic. The initial process was expensive because of all the purchases; however, the development and implementation of a new craft beer product will help lessen the costs and have the same outcome in sales as their acquisitions.

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The work breakdown structure (WBS) details work needed to produce various product or deliverables. The WBS is designed for the scope of the project to make sure it is feasible. It also provides the ability to assign the work, establish a baseline, and measure accomplishments. It defines, collects and reports information to all the stakeholders, as well as defines the relationship between work, organization and costs associated. It can take a good amount of time to develop a WBS because of the uncertainties associated with the project and its scale.

Below is an example of the WBS to be used by Anheuser-Busch to create a new craft beer. The work breakdown structure (WBS) defines the work necessary to produce the product or deliverables. The WBS is designed to enable the definition of the scope of the project, provides the ability to assign the work, establish a baseline, and measure accomplishments objectively. It defines, collects and reports information to all the stakeholders, as well as defines the relationship between work, organization and costs associated. It can take a good amount of time to develop a WBS because there may be many uncertainties associated with the project and its scale.

Below is an example of the WBS to be used by Anheuser-Busch to create a new craft beer.

FIGURE 1

Anheuser-Busch’s new beer has a similar brew process as their flagship beers Budweiser and Bud Light, however, a project plan with milestones and required tasks was developed to keep the project on course. The project plan is continually monitored and evaluated if timelines need to be adjusted as any issues that may arise. The project will take approximately 18 months to complete with a vast amount of the time spent on material and equipment sourcing. This area is the most important because most of the raw materials are readily available as needed but hops are going to the most challenging because of the recipe.

Below is a table of the major key milestones to ensure the new beer will be available on time

TABLE 1:

Project Review Process

 Creating and observe the milestones will provide the correct guide to the project towards success. The first identification of the target market of the millennial age group has already been achieved. The market analysis performed using data from the website Beer Advocate and Brewers Association. “Targeting a specific group of customers reduces the capital needed for marketing and leads to a higher return on investment (Kaleikini, 2009).”

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 The next key milestone is coming up with the prototype for the beer. “Prototyping helps evaluate and test. Sometimes drafts of a design can be unrealistic in real-world applications, having a tangible prototype can help identify design areas that are worthwhile and those that need to be reevaluated (Upton, 2010).” Once a prototype has been designed, it will give Anheuser-Busch an outline of the financial implications to try run of the new beer.

The last milestone is the profitability of the beer. It is critical for Anheuser-Busch analysts to track theses milestones and KPIs. The first KPI to continually monitor is the break-even analysis of sales. The faster the beer hits the marker the likelier the beer will be a success. After the first run of beer sales, the analysts can verify where the beer sold the best and how to reallocate inventory to those markets for faster sales. However, if baseline sales are poor then marketing and a reevaluation need to occur because the first run of beer has been ineffective. Operating at loss is not ideal but if it is short term it is sustainable because profits will hopefully come back but if the loss is long-term, then Anheuser-Busch needs to modify their strategic plan for the marketing of the new beer to help drive sales.

Table 2 Break-Even Analysis

Intrapreneurship

 To make this new beer a success, Anheuser-Busch needs to take advantage of on their intrapreneurial opportunities from the previous brewery acquisitions. Anheuser-Busch will need to continue to learn and focus on the knowledge of the people. Intrapreneurship takes many to be involved in the implementation plan where all members involved offer ideas about how to market or participate in tasks that are directly ordered by the entrepreneur. The entrepreneur, as well as intrapreneurial, are both give goals to complete to ensure financial concerns and performance factors are met and on schedule. (Gustafson, 2016).

References:

Gustafson, F. R. (2016). The Importance of Business Implementation. Retrieved December 3, 2017, from http://smallbusiness.chron.com/importance-business-implementation-34571.html

Herz, J. (2016, August 16). TODAY’S CRAFT BEER LOVERS: MILLENNIALS, WOMEN, AND HISPANICS. Retrieved from Brewers Association:      https://www.brewersassociation.org/communicating-craft/understanding-todays-craft-beer-lovers-millennials-women-hispanics/

Kaleikini, M. (2009, November 30). Why is it important to define a target market for your business? Retrieved June 2, 2018, from                                                                                     https://www.entrepreneur.com/answer/222022

Rotunno, T. (2015, July 26). Inside Anheuser-Busch’s craft beer deals. Retrieved from CNBC: http://www.cnbc.com/2015/07/24/inside-anheuser-buschs-craft-beer-deals.html

Upton, S. (2010, December 02). Four Key Uses of Prototyping. Retrieved June 2, 2018, from https://www.moldmakingtechnology.com/articles/why-is-prototyping-important