For the chapter ten hiring test exercise assignment, I am going to ask you to write one or two business objectives that the family could use. When we write business objectives we want them to be measurable, specific, timeframe and contain action(verb).

The oldest Brewery in America

A sixth-generation family business founded in 1829, D.G. Yuengling and Son, lives up to its billing as Americas Oldest Brewery. German immigrant David Yuengling (pronounced Ying-ling,) Settled in Pottsville, Pennsylvania, and opened the Eagle Brewery. Two years later, the building was destroyed by fire. Yuengling decided to rebuild the brewery a few blocks away at the corner of Mahantongo and Fifth Street, where he could use the caves that run underneath Sharp Mountain as storerooms to aid the fermentation process. With temperatures at a constant 50 degrees, the caves were the ideal place to store beer, and in the early days, the companys employees would gather there to socialize and have a hearty stein of lager before starting their shifts. With many German immigrants, Pennsylvania in the 1800s became a hub of beer-brewing activity, and D.G. Yuengling was one of many breweries serving Schuylkill County with its horse-drawn carts.

The Company grew, and in 1873, Davids son, Frederick, became a partner in the business. The business was renamed D.G. Yuengling and Son. After his father retired, Frederick took over the operation and in 1895 added the brewerys first bottling line which remains in operation today. In 1899 Frederick died suddenly at the age of 51, leaving his son Frank, who was in his early twenties, to run the family business. Frank learned quickly and guided the company successfully, however, in 1919 he confronted the greatest challenge that D.G. Yuengling had ever faced: Prohibition. When the U.S. Government made the manufacture and sale of alcoholic beverages illegal, many breweries failed, but under Franks leadership, D.G. Yuengling managed to survive by adding a dairy to its operation. They sold ice cream, and near beer, a non-alcoholic concoction that the Yuengling family hoped would keep its brand name alive. Fourteen years later, Prohibition ended, and D.G. Yuengling began selling Winner Beer, A name that jabbed at the temperance movement. Frank eve sent a truckload of the beer to President Franklin Roosevelt at the White House!

Frank stayed at the helm of the brewery for 64 years before turning over the family business to his sons, Richard and Dorhman in 1963. Dorhman died in 1972, and Richard ran the company by himself, but did so without much vision for the future. He simply maintained the status quo and never expanded the brewerys operations or even upgraded the plant. Richards son began working in the brewery as a teenager in 1957, stacking crates and moving kegs. With is perspective as a worker as well as a family member, he saw plenty of problems in the operation of the brewery, and he was quite vocal about them to his father. Id try to implement changes at 18, and, of course, Id get overruled. Being outvoted did not stop him from voicing his ideas for improvement, which began to cause a rift between him and Richard. I wasnt getting along with my dad, He says, which prompted him to leave the family business for a time to run his own beer distributorship. He sold Yuengling beer, which meant that he made regular runs to the brewery to fill up his trucks with cases of beer. After Richard was diagnosed with Alzheimers disease in 1893, Peter took over as manager of the brewery.

Peters experience and the network of contacts he made as a wholesale distributor proved to be valuable when he assumed leadership of the family business. D.G. Yuengling had always considered its lager to be the working mans beer and priced its products in line with that image. Although always popular in Pennsylvania, where customers simply referred to Yuengling as the local beer, the companys products were virtually unknown and unrecognized outside the region. Because of the companys interesting history and unique local flavor, Yuenglings beer held a certain mystique among customers outside of its primary markets, and Peter began to notice this. Sales began to climb during the 1990s as the microbrewery trend reached a crescendo and customers enjoyed savoring the distinctive beers companies produced in small batches in the tradition of European breweries. To capitalize on the opportunity, Peter boosted production from 200,000 barrels to more than 300,000 barrels and began to move into new markets in the Northeast. Because the company had never embarked on a deliberate growth strategy in its entire history, this was a major strategic shift.

In 1993, Peter began to think more about Yuenglings future. He sat down with his four daughters and asked them point-blank if any of them would be interested in taking over the family business one day. Three daughters said that they were interested in taking over the family business one day. Three daughters said that they were interested in running the family business (the fourth is still considering it). They began working at the brewery right away. Jennifer, the oldest of the three, is plant coordinator, Debbie works in finance and accounting, and Sheryl helps managed the distribution. They are the first women ever to take on managerial roles in the brewery. We consider it a source of pride, says Sheryl, that we are women and were going to be taking this over. That day probably wont be coming in the near future, according to Peter, who acknowledges that none of his daughters is ready to assume leadership of the company. Currently, Jennifer seems to be the best qualified, having completed brewing school and also having earned a graduate degree in psychology. She also exhibited the same take-charge spirit that has enabled her father to make Yuengling the success it is today. Even though she is at work before dawn most days, she says that her father remains her best resource at the company. Hes dedicated his life to the brewing industry, and hes magical with it. The best way to learn is through interaction with him.

By 1996, the growth strategy was working. Demand climbed to 500,000 barrels a year, and the creaky old factory built in 1831 was struggling to churn out enough beer to satisfy customers tastes. Knowing that the existing plant could not keep up the frenetic pace for much longer, Peter convened a strategy session to weight the companys options. In a bold move, Peter, decided to build a brand new brewery at the cost of $50 million (and to keep the old one) in Pottstown that would increase Yuenglings brewery capacity by 1.2 million barrelsquite a change for a business whose strategy for most of its 167 years of existence seemed to be avoiding growth. Then the opportunity to purchase a brewery in Florida that had been owned by the Stroh brewery came up. Seeing the purchase s the gateway to the market in the Southeast, and as an opportunity to add capacity while the new plant was under construction, Yuengling paid just $13 million for the operation. Even after spending an additional $5 million to upgrade the brewery, Yuengling knew he had gotten a real bargain. The plant was up and running within three months.

Although Florida is the nations third largest consumer of beer, Yuengling struggled to break into the market. Because it had spent very little on marketing in its Northeastern market, counting instead on the buzz created by satisfied customers, Yuenglings name recognition in Florida was almost non existent. We became a small fish in a big pond, says one member of the companys informal board of advisors

Although a small company by industry standards (industry giant Anheuser-Busch produces 130 gallons of beer for every one gallon Yuengling produces), Yuengling has become the nations fifth largest brewer, generating more than $100 million in sales. The family business has 160 employees and three factories in two states. The companys size has created a multitude of managerial issues Yuengling must address. Im good at running a small business, he says, But were not a small business anymore. Peter keeps the companys organizational structure flat and informal, but management consultants have suggested that the company has grown to the point that it now needs a level of middle managers to operate efficiently. The tipping point, says consultant Eric Flamholtz, Usually comes either at the $100 million-revenue or 500 employee mark, and failure to address the infrastructure needs can sink a company. Peter Yuengling agrees: Youve got to get people in the proper place. Sometimes as an owner its hard to do it. I at least recognize it. Pushing for a more formalized structure, one advisory board member says, peter does recognize this, but Im not sure hes embraced it yet.

Family members want to maintain a balance between an organizational structure strong enough to support the company but not so large as to tie it down in a bureaucratic morass and destroy its unique culture. Its a fine line trying to maintain the lad-back flexible attitude and still not become corporate America, says Jennifer. We dont have a board of directors. We dont have managerial meetings every week. Theres basically one guy here who controls the whole operation. Thats something that, as we do expand, were going to have to sit down and discuss.

Yuengling recognizes the challenges that growth has brought the family business, but he remains optimistic about the future. We fought through prohibition, he says with a smile, so well fight through anything.

1. Write two planning objectives (RememberMeasurable, Specific, Timeframe and Action Verb) that Yuengling could use right away to approach two of his current concerns with the company.

2. What steps should Peter Yuengling and his family members take to develop a management plan?

3. What changes should the company make in its current organizational and management structure? Why?

4. How would you recommend the company market its beer in Florida and other Southeastern states?