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Phone Interview - Adam Smith - April 6, 2010
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Doing a “SWOT” analysis of a company is a great way for marketers to understand their customers, other companies and the environment in which their company operate. It consists of looking at two sections of a company – its micro and macro environment. A micro environment consists of factors directly affecting the company. A Macro environment consists of forces in society that may have an effect on your micro environment (Kotler, Armstrong, & Cunningham, 2008, pp. 80-81).
The micro environment for Steam Whistle has several strengths that are helping them succeed and a few weaknesses that they need to monitor and overcome.
Being a nostalgic company with a traditional beer is a point of pride for Steam Whistle. Steam powered whistles were icons of the fifties and were blown at the end of a long work day. The idea behind using the steam whistle as the company’s brand was to create a feeling of rewarding one’s self at the end of the work day with a Steam Whistle beer. “[The fifties] was a time when the marketing of goods relied on a relationship of trust between manufacturers who produced quality goods and consumers who eagerly rewarded genuine results. Steam Whistle was founded on these forgotten principles” (Steam Whistle Brewing - Our Name). Steam Whistle uses vintage vehicles such as “Grumpy”- a 1957 Chevrolet pickup truck, to deliver beer and for running around to community events (Steam Whistle Brewing - Vehicles). For the customers, this will hopefully bring to mind the simple life of the fifties. Steam Whistle will deliver everything from bottles to a keg directly to customers in the greater Toronto and surrounding area. The delivery system was used greatly in the era that Steam Whistle is trying to recreate. Located right below the CN Tower, Steam Whistle brewery is in a vintage 1929 Roadhouse that was once used to service locomotives. This is where the pilsner is made. They offer tours of the plant that retell the locations history as well as the companies. All of these strengths help the customer to learn all about Steam Whistle. They also offer online, virtual tours.
Consumers are welcome to attend nationwide events that are sponsored by Steam Whistle. In their own factory they have two unique rooms available to the general public for weddings, fundraisers and events of this nature. Along with offering that to their customers, they promote local artists through their website and at their factory. They also have a promotion label called Unsigned which is designed to promote local indie music. This benefits the community, and any customers involved in the music industry especially because young art enthusiasts are part of their target market.
An advantage to consumers of Steam Whistle is that everyone from the founder’s of the company, right down to the administrative staff has their contact information posted online. Any questions or concerns customers have can be directed to the right person with little to no hassle.
A lot of Steam Whistles strengths from the micro environment come from its suppliers. Along with being an environmentally friendly company, they also do not skip out on health conscious, quality ingredients in their products. Their pilsner is GMO-free. It does not have any genetically modified organisms. Genetically modified organisms are created when a certain gene in the plant (in this case, yeast) is altered. Some of the concerns Steam Whistle would have with their green attitude is the unintended harm to other species by altering the plants, and all of the human health risks associated with modification. Allergies are one of the biggest growing concerns to human health. By altering the state of the plant and adding chemicals in for modification, it has been said that new allergies can be introduced. (Whitman, 2000, pp. 5-7). It is important to Steam Whistle to keep any GMO products out of their beer for the health and safety of the environment and their customers. The company needed to find a supplier based on their environmentally friendly standpoint. The company uses only four ingredients: pure spring water, malted barley, hops and yeast which are listed on their bottles because they believe that customers have the right to know what goes into their product. As stated on the Steam Whistles website, the Canadian government allows over 100 different ingredients in the creation of a beer. Steam Whistle only uses four and they focus on Europe’s renowned brewing standards when creating their pilsner.
Having marketing intermediaries can boost people’s awareness of a company and may also help to build stronger customer loyalty. Steam Whistle promotes their beer through local pubs and restaraunts throughout Ontario, Alberta and British Columbia. You can search where to find steam whistle beer right on their website. Although they do have intermediaries, steam whistle has yet to implement their beer into major food chains such as Boston Pizza or Moxies. This could potentially be a strength to expand into better known food chains.
Steam Whistle believes that their customer relationship is the most important thing to their company and continuing in the future. This is proven by the sales reps in all regions making sure that only the freshest pilsner is being served in all channels of sale by going to each establishment and if the product isn't to their fresh standard, they pull the product off the shelves, pay the retailer for the product that they pulled and replenish the retailer's stock (Adam Smith, Steam Whistle). Steam Whistle is so customer driven, that their belief is that nothing worth trading off good customer relationship for expansion or a rise in profit. This is a strength for the company because if you have a poor customer relationship, the organization suffers as a whole.
Steam Whistle has a different outlook of competitors in their market than most would think. They believe that other microbreweries, also called craft beer, are not competitors, or weaknesses to them, but that they're a strength to Steam Whistle because if one microbreweries win they all win. The reason all craft beer win is because in the craft beer market consumers usually have no problem tasting and trying other craft beer, without going into the major brand market. Steam Whistle does not perceive the major brands as competitors because the major brands have little or no customer service and only concentrate on corporate culture with no experience for the consumer.
One of Steam Whistle's strengths is the amount of awards that they have been able to collect in the company’s short twelve year lifespan. In 2009 alone, they won an award for being one of Canada’s 50 Best Managed Companies, The Environmental Award of Excellence in the Energy Conservation category at the City's Green Toronto Awards, and they won gold at the Ontario Brewing Awards for the best pilsner (Steam Whistle Brewing - Awards). This speaks volumes to customers as well as the competition.
Steam Whistle needs to be aware of changes in the environment around them. There are opportunities that they on which they can capitalize and threats that could hinder them. Each area of the macro environment has its own opportunities and/or threats.
There are two very significant demographic trends that affect Steam Whistle. The first trend is beer drinking among young Canadians (aged 18 to 34). According to Stats Canada, this demographic has been shrinking in size, but increasing its beer consumption.
According to Statistics Canada’s Canadian Community Health Survey, 41% of drinkers aged 20 to 24 in 2003 were considered heavy drinkers, that is they reported having had five or more drinks on one occasion, 12 or more times in the year prior to the survey. This was up from 23.8% in 1994, according to data from the National Population Health Survey. Among those aged 25 to 34, 26% were considered heavy drinkers, compared with 18% in 1994. Together, almost 32% of young adults aged 20 to 34 in 2003 were considered heavy drinkers, up from nearly 20% a decade earlier.(Rupnik, 2006)
The second is the location of beer drinkers. Albertans drink the most beer per capita in Canada. This is an opportunity that Steam Whistle has already started to pursue. In May 2003, Steam Whistle made their first expansion beyond Ontario - to alberta (Steam Whistle Brewing - Milestones).
A trend that Steam Whistle can benefit greatly from is being environmentally friendly. One can easily tell that Steamwhistle is aiming to create a safe and natural environment. When creating their bottles, 30% more glass is consumed in the manufacturing stage so that the bottle can potentially be washed, inspected, and reused up to 35 times. That is twice as many times as the benchmark that has been set in the industry with the standard brown bottle. On the green bottles, the label is painted on rather than a paper label being glued on. This saves the eco-system from harmful glue and cuts the paper needs down to nil (Steam Whistle Brewing - Green Initiatives). Along with the strong green initiative in the making of their bottles, all of the packaging is environmentally friendly too (Steam Whistle Brewing - Green Initiatives). The Ontario based company was the first to use biodegradable cups for any outdoor events. The cups they used were made from corn starch resin that will compost in 50 days. Any spent grain that the company has after production is recycled as well. It is given to farmers for feed for their animals. These are examples of how Steam Whistle has used opportunities in invironmentalism to their advantage. These points are easily understood by the everyday customer who has done little research. The green movement has grown immensely in recent years. ``Two studies found that nine out of ten Canadians feel either `a great deal of concern’ or ‘a fair amount of concern’ about the state of the environment, and that nine out of ten Canadians rate it as one of their top concerns.” (Boyd, 2003, p. 4). Steam Whistle has realized that part of their desired target market will consist of consumers looking for an environmentally friendly alternative.
Making environmentally friendly bottles and packaging are not the only green initiatives that Steam Whistle has come up with. The companies green initiative stretch from the heating of their own plant to the food left over from parties. To power the large plant they use electricity produced by Bullfrog Power. Electricity is generated by wind and low impact hydro generators, saving our environment by lessening the carbon dioxide in the air produced by using fossil fuels. To cool the plant, Steam Whistle relies on Enwave’s Deep Lake Water cooling. The cool water from Lake Ontario is used to keep the climate of the plant cool. They are making an environmentally friendly choice because the alternative air conditioners use harmful refrigerants. They’re also saving electrical energy by not using conventional air conditioners. Enwave’s company also has a steam heating division. Steam Whistle uses the steam plant to heat water for brewing, washing their bottles and keeping the plant warmer in the cool winter months. Steam Whistle also takes pride in the fact that all of their lighting is energy efficient and that they use B20 Fuel in all vehicles used by the pilsner company (contains soya fuel and recycled restaurant grease). The Steam Whistles Brewery uses the most energy efficient equipment available. The equipment they have chosen re-uses the steam heated water, and has the least amount of water output. (Steam Whistle Brewing - Green Initiatives).
The macro environment for Steam Whistle is not always a positive one. A threat that the company faces are that their bottles are not reusable like all of the other common brown bottles. Companies like Labatt, Kokanee and Molson-Coors all use the standard brown bottles. When Steam Whistle bottles end up in western Canadian bottle depots, the thick green bottles must be separated from all of the brown bottles that will eventually be shipped back to these breweries located nationwide. It is much easier to package up the brown bottles and send them to the closest brewery for rebottling. Steam Whistle must have their bottles separated and shipped all the way to the brewery in Ontario. Although their bottles can be used almost twice as much as the standard brown bottles, it is at a greater cost to ship them all the way across Canada.
[I have an email out to the shipping director for more information]
One threat that affects Steam Whistle is new anti-smoking laws. Recent laws in Ontario and Alberta have made it illegal to smoke in public places, including bars. When similar laws were passed in the United States, a significant reduction in beer consumption was observed by beer companies. "Results reveal that smoking bans reduce the demand for beer and spirits. . . . bans specific to restaurants and bars lead to larger reductions in beer and spirit consumption" (Gallet & Eastman,
There are many attributes that can be in the contingency in the SWOT analysis of Steam Whistle, some more important than others.
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