1. Why has the United States brewing industry become more concentrated over the last two decades?

2. Analyze the competitive structure of the industry using Porter’s competitive forces model.

3. What are the implications of the evolving competitive structure in the brewing industry for the profitability and strategy of a smaller mass market firm in the industry?

4. a. Are there different strategic groups in the industry? What are they? 

b. Do you think the nature of competition varies among groups?

The United States beer industry is characterized by an increase in the concentration of the market. With U.S. beer production being provided by just three companies, the mass market segment of the industry revolves around competitive pricing, brand loyalties, distribution channels, and national advertising spending. The industry tends to be dominated by large established enterprises that have the scale required to bear the considerable costs and risks associated with developing new products and, moreover, can afford to spend large amounts of money to promote those products in the marketplace. There are opportunities for these firms in terms of new wines and spirits as well as threats from premium beer brewers.