961 Beer was started in 2006 in Lebanon by Mazen Hajjar and Henrik.

Over the years the company faced various

challenges and devised ingenious solutions to them. There also face a few decisive questions for their future. The
case analysis is as follows:

Situation Analysis:
Political Turmoil: When the company had just been conceived, Lebanon got mired in a chaotic political situation
with the sudden eruption of a war with Israel. However, far from being put off by it, the company decided to go
ahead and register in those challenging times which allowed them to proclaim We registered under siege. Going
forward, there were other situations in 2007 and 2008 which lead the company to face various downturns in terms
of the numbers of visit to the bar. The company never faded away though.

Ignorance of the Industry: Mazen Hajjar did not know the basics of making beer; neither did he or the team he
assembled had any idea of how to assemble various beer making equipment. But through sheer perseverance they
were able to set up equipment both when purchased from Canada and Italy. This highlights a key element of the
inbred values of the company never give up.

Competition: The beer industry of Lebanon was dominated by Heineken subsidiary Almaza. The consumers were
generally accustomed to drinking light lager and craft beer was something new. Making them drink red ale was
going to be a challenge for them, which they managed quite well. The local bars and competitors felt disincentivized
to carry 961 beers as they had their own bars. Sometimes, Almaza paid bar owners not to carry 961 beers.

Marketing: Unable to compete head-on with the bigger competitor with unlimited treasure chest, the company
decided to focus on online advertisement and positive word-of-mouth publicity. They did not have any market
positioning as such- however the educated and high income beer consumers and those who liked to experiment
were the core consumers at the onset. The culture of beer consumers preferring local agricultural products in their
beers was taking over all over the world and this resulted in a unique opportunity for 961 to capitalize on and
increase its sales.

Future Strategy: In the future, they had to take a call between consolidating its market position or to expand its
market and appeal. As Exhibit 3 states, their sales of were growing and they had reached its capacity of 2,80,000
bottles annually. However, there was a blot on the landscape: they were selling cases for $12.50 per unit to
distributors while incurring $13.60 to manufacture that unit. This needs addressing.

Problem Definition:
What should 961 Beer do? Should they go ahead and consolidate or grow the customer base? If they choose to
grow it how would they maintain the quality?

Options:
The various options that 961 has are:
Consolidate the customer base and try to increase revenue either by increasing the sales per customer by offering
more varieties or increasing consumption, or by increasing the price per product sold to the customer
Grow the business in the various pockets of the country that are still untouched by the 961 phenomenon
Grow the business overseas and reap the benefit of the growing microbrewery craze among the beer consumers

Criteria:
The criteria for evaluation of options are as follows:
Profits possible from the various options
Future prospects of the options
Ease of implementation of the options
Impact on quality
Evaluation of Options:

Ease of
Profits Future Prospects Impact on Quality
Implementation
Not very bright as
It is very easy to
They are selling 2,80,000 there would be losses
implement and
bottles per year at a loss and the company may
requires the least
and increasing prices is not run out of money; at The quality will
amount of effort
Consolidate an option as competitors best they may look to not be impacted
from the
will not let that happen. break-even; they are in this case
company- almost
Therefore a loss is more looking at economies
maintaining the
plausible of scale for profit and
status quo
this will not help
The population of the
country in 2009 was over 4
million [1]. Per capita
consumption of alcohol If the political
was 2.4 liters out of which situation in the Having an
18% was beer [2] which country remains experience of As the increase in
means that the market size strong then such a putting together production is not
Grow in is 1.728 million liters and if growth for the equipment that marked the
country 961 beer can capture company is feasible. It would make it quality should not
around 50% of the market only needs to increase easier for them be a factor in this
that would mean 0.864 the price that it is to implement case
liters which taking 650ml charging per bottle to this strategy
bottles would mean turn a decent profit
5,60,000 bottles and
increased profits for the
company
It would be
difficult to
7% of the global beer If they are able to implement as
The increase in
market (123.8 billion liters) access the markets they would need
production would
belongs to ale, etc. and the and get consumers for to scale up a lot
Grow Overseas be substantial
company may try to their product the require a huge
and may affect
capture a small share in prospects are quite amount of
quality
this market good investment and
quite a lot more
of equipment

Recommendation:
They should go for growth within the country as it would not only see increase in profits for them but having
considered this it would also ensure that the quality of beer is not compromised with. The future prospects are
quite good and the implementation is easy. For the first option there is the prospect of having losses and the third
option is quite hard to implement and maintaining quality is also an issue. The third option may be feasible in the
future.

Action Plan:
Go for growth in country.
Contingency Plan:
They should try to growth outside the country and see how it works.

Conclusion:
Finally, the analysis may be concluded with the result that the implementation of growth of the company within
the country.

References:
[1] http://www.populationpyramid.net/lebanon/2009/
[2] http://www.who.int/substance_abuse/publications/global_alcohol_report/profiles/lbn.pdf