Professional Documents
Culture Documents
1. The CAGR of beer market between 2014 and 2019 is .52% whereas the CAGR
for wine is 4.09% and for spirits is 6.18%. And the market share of beer has
decreased from 55.1% in 2014 to 49% in 2019.
2. Tbd
3. The CAGR of craft beer is 7.63% whereas the CAGR of wine and spirits are
4.09% and 6.18% respectively. Also the operating margin is 20% for the craft
beer which is high compared with other beverages like spirits, and other
types of beer. For Wine the margin is high but the competition is medium and
investments needed is high whereas for craft beer the competition is low and
investments needed is medium.Hence it appears as attractive segment
B
1. Where does beerco fit in the long term plans of bevco, competition in the
segment in which beerco operates, Would beerco be marketed under the
bevco brand after acquisition, organization fit, corporate culture, Market
conditions, consumer preferences, market size. BevCo should evaluate what
is the ,
Existing cash flow (sufficient to pay expenses and make a living)
Government regulations
Financial records and representations by seller
Remember to take care of the most important asset: people
2. Potential Revenue & Cost Synergies
Increased market power: increases profit margins and sales
Potential sources of cost synergies include:
- Headcount reduction (redundancies)
- Elimination of surplus facilities
- Reduced overheads (e.g. consolidate functions such as accounting, IT and marketing)
- Increased purchasing power (greater bargaining power with suppliers due to greater
combined size)
Revenue synergies
Revenue synergies refer to the ability to sell more products/services or raise pricesdue
to the deal.
Potential revenue synergies include:
- Marketing and selling complementary products
- Cross-selling into a new customer base
- Sharing distribution channels
- Access to new markets (e.g. through existing expertise of the takeover target)
- Reduced competition
3. 28.8%
C
2014
500
75
2015
700
105
2016
900
135
2017
1100
165
Own
production
Year
Cans
variable
cost
fixed cost
total cost
3.
2014
500
2015
700
2016
900
2017
1100
25
100
125
35
25
60
45
25
70
55
50
105