Abstract
Sweet Berry Distiller was established in 1990 after its shareholders decided to transform it from a wines and spirits outlet. The company is located in Temple State, Arizona, and supplies distilled drinks within and outside this region. This company has a capital base of about $780,000 and more than 3000 permanent employees. The company supplies distilled alcohol to other regions, including Mesa, Glendale, Scottsdale, Gilbert, Chandler, and Phoenix.
Alcohol and other similar drinks have been licensed by the local and national government, and this means that the company does not violate the laws that govern ethical business practices. A major strength of this company is that it has vast experience in the wines and spirits industry, and this gives it an added advantage over its compatriots. The already established wines and spirits market is a major strength that boosts the profits of the company. However, people are conscious about their health, and this makes them avoid alcoholic drinks.
Tougher legislation on the production, supply, and consumption of liquor threatens the future of this industry. However, the company has a bright future because of the numerous opportunities for growth offered by local markets. In addition, it has a robust, experienced, and dedicated staff that makes it stronger than its competitors.
Background
Sweet Berry Distiller started as a wines and spirits distributor with its primary outlet in Temple State, Arizona. The outlets were managed by a Harvard University graduate, Johnson Whites, who won the board’s approval to lead it for a renewable two-year term. He transformed and expanded the outlets from three small stalls to 12 shops. The company is owned by shareholders who were introduced to its management in 1987 when the company became public.
Derrick Major and Simon Duke, together with their partners, started this venture in 1985. They borrowed loans from banks and used most of their savings to expand their operations from a street restaurant to a wines and spirits outlet. It expanded its operations due to the high profits generated and became a chain store in 1986. The quick growth was attributed to the experienced staff, employee motivation, and high demand for its products. In addition, the location of the business in a busy town in Arizona was a strategic advantage that attracted customers. Sweet Berry Distiller was established in 1990 as an upgrade of Sweet Drops Wines and Spirits Distributor.
Duke passed away in 1992, and by this time, the business had an asset value of about $500,000. The company’s shares were already floating on the New York stock exchange market, and Major had no worries about its future. He decided to organize it and give more powers to the public to control its management. Johnson Whites were recruited as the company manager in a fiercely contested exercise in 1994.
The employees of Sweet Drops Wines and Spirits Distributor were absorbed into the new company and given different roles. However, cashiers, drivers, cleaners, secretaries, and other employees retained their offices. New employees were recruited to supplement the existing staff ad offer professional services to the company. The transition from a wines and spirits distributor into a distillery was not easy. However, Major ensured all company policies were followed and took advantage of the strong staff to achieve the objectives of Sweet Berry Distiller.
SWOT Analysis
Strengths
These are issues that make a company succeed in managing a large market despite the existence of competition and other factors (Dyson, 2004). Sweet Berry Distiller enjoys and controls a significant market in Arizona because of the experience of its employees. They were integrated into the new company after the old one changed its operations. These employees had vast experience in selling wines and spirits ad it was easy to integrate it with the new practices.
Secondly, the company continued to offer the services offered before it changed its operations. It had specialized in distributing wines and spirits in Arizona and the neighboring regions. Therefore, it did not change its line of operation, and this means that most customers were retained. Thirdly, the company had adequate capital acquired from the previous business. There were ready infrastructure and staff, and this means that it did not incur any additional expenses to acquire them.
The groundwork was already established, and the change of operations did not cost a lot of money. Lastly, the existing laws allowed investors to set distilleries without restrictions; however, the challenges involved in the supply of alcoholic drinks discouraged people from venturing into this business. Major and Duke did not fear investing in this industry because they knew they would generate profits and control the local market easily.
Weaknesses
These are issues that place organizations in positions that make them inefficient so that competitors get chances of dominating markets (Bernroider, 2002). Sweet Berry Distiller has a major weakness that causes some of its outlets not to function properly. Cases of staff arrogance and inefficiencies were reported, but the company did not bother to address them. This company does not pay attention to the complaints presented by its customers, especially those served by its outlets located in Mesa, Scottsdale, and Chandler.
Secondly, the change of operations from a wines and spirits outlet to a distiller paved the way for the employees of the former to be absorbed by the new company. Therefore, they carried the weaknesses presented in the former company to the new one. Employees do not change easily unless they are influenced to do so. Thirdly, its management system is centralized, and this means that most decisions are made by managers and the board of directors.
Each outlet is managed by a manager and two deputies, but none of them is involved in making decisions that affect their branches. Lastly, the company did not change its operational policies and continued to use old regulations. There is no employee motivation, and this explains why most of them have left to work for other companies.
Opportunities
These are chances that organizations should utilize to improve performance, motivate employees, and attract customers (Halla, 2007). The high demand for distilled alcoholic drinks has attracted people to invest in this industry. However, the local government has established strict policies that limit the number of successful applicants. Sweet Berry Distiller should capitalize on this opportunity and expand its market share. It should maximize on this opportunity before the local government allows additional players in this field. Secondly, most distillers moved from the production and supply of wines and spirits to energy drinks.
The economic recession of 2008 forced most small businesses to abandon this industry because its clients had limited finances to buy alcohol. It was not profitable to invest in distilleries because the products of this industry are not basic, and people could not prefer them to food, education, or shelter. Lastly, most of its customers do not sell wines and spirits only. They sell energy drinks and bottled water that fetch good prices in the local market. The company should diversify its production and explore the possibilities of supplying bottled water and energy drinks.
Threats
These are issues that affect the performance of a business and may reduce its popularity, profits, or market control (Houben and Vanhoof, 2009). Today’s generation is concerned about the quality of food and drinks it consumes; therefore, businesses face serious threats of they do not diversify their lines of production.. People are careful not to indulge in practices that risk their health and safety. They do not drink alcohol as often as they used to do it several years ago.
The profits generated by this company before it changed its operations show that most people used to drink during the 1980s. Therefore, many distillers exited the industry, and there are higher chances that others will be affected in the near future. Secondly, there are numerous campaigns to educate people about the dangers of alcoholism. There is no direct warning that they should stop drinking alcohol. However, the messages conveyed through these campaigns show that people should stop drinking alcohol. The future of this company is at stake if it does not start producing non-alcoholic drinks. Thirdly, Sweet Berry Distiller faces stiff completion from companies that have experience in this field.
Their employees are trained properly and understand the dynamics of this industry better than those of Sweet Berry Distillers. Lastly, its competitors offer attractive salaries and other incentives to motivate their employees and increase sales and profits. However, Sweet Berry Distiller does not pay attention to employee motivation due to the management structure that does not give room for dialog between managers and their subordinates.
Lessons from the SWOT Analysis
A SWOT analysis of a business gives an insight into the profitability of a business and how it can improve its performance (Singal and Gerde, 2015). The analysis presented in this essay shows that it is easy for businesses to expand and improve their performance if they do not move out of an industry. The reduced expenses incurred in the transition were an added advantage that enabled this company to win a larger market than its competitors. Secondly, the analysis shows that centralized management systems are inefficient in organizations that rely heavily on their employees. This company focuses its attention on empowering and giving the central manager the excess and absolute powers to control its activities and employees.
Lastly, it is evident that the economic crisis of 2008 affected most small investments, even though it was controlled properly. However, there is no guarantee that another economic crisis may not occur in the future.
The Future of Sweet Berry Distillers
This company faces a serious threat if people continue to pay attention to their alcohol consumption habits; however, it has a bright future if it diversifies its line of production. The growth from a wines and spirits distributor to a distillery shows the efforts made by its employees to transform this company. Therefore, it should establish ways of improving their welfare and ensuring they work in a healthy and satisfying environment.
Lastly, its strong customer loyalty is an added advantage that will make this company better than its competitors. Johnson Whites should involve branch managers and their subordinates in making decisions that affect this company to ensure they develop a sense of belonging and ownership of Sweet Berry Distiller.
References
Bernroider, E. (2002). Factors in SWOT Analysis Applied to Micro, Small-to-Medium, and Large Software Enterprises: An Austrian Study. European Management Journal, 20(5), 562-573.
Dyson, R. G. (2004). Strategic development and SWOT analysis at the University of Warwick. European Journal of Operational Research, 152(3), 631-640.
Halla, F. (2007). A SWOT analysis of strategic development planning: The case of Dares Salaam City in Tanzania. Habitat International, 31(1), 130-142.
Houben, G. and Vanhoof, K. (2009). A knowledge-based SWOT-analysis system as an Instrument for strategic planning in small and medium sized enterprises. Decision Support Systems, 26(2), 125-135.
Singal, M. and Gerde, V. W. (2015). Is Diversity Management Related to Financial Performance in Family Firms? Family Business Review, 41(8), 431-433.