Management:

Answer the questions based on the transcript for Fort Town Brewing Company:

>> And we have the grain, and its mixing with the water.

>> As soon as Fort Town brews one of its four specialty beers it's out the door.

>> We are in a fortunate position in that we're selling all the beer we can brew and we struggle to keep up with demand.

>> The CEO founded Fort Town Brewing Company two years ago, tapping into a nationwide boom in craft beers. The growing industry represents only 6 percent of the market, but as sales of large domestic beers decline, sales of craft beers are up 11 percent.

>> It's very similar to what happened in the wine business 15, 20 years ago. People stopped ordering just a generic glass of white wine and they started ordering Chardonnay. It cost a little bit more, but people found that it tastes better and they're willing to pay a little bit more.

>> There are 2,000 local breweries like Fort Town across the country. As they multiply, the opposite is happening with the big beer makers, which are consolidating on a march to global domination. How different would Budweiser look than this [brief laughter]; what's the difference?

>> That's a good question. You could probably fit this entire brew house into one of the tanks at Anheuser-Busch.

>> One tank? Really, they're that big? Even Budweiser is now owned by a Belgium company, Anheuser-Busch InBev. It controls nearly 50 percent of the U.S. beer market, with brands like Budweiser, Bud Light, Stella and Becks. Now Anheuser-Busch InBev is trying to get even bigger by merging with the Mexican company that brews America's most popular import- Corona - a deal worth $20 billion. But the Justice Department has sued to block the deal, arguing it would lead to higher prices and fewer products. Butcher says the deal would hurt his industry by putting the squeeze on small specialty brewers.

>> There's a limited amount of shelf space out there and the big suppliers have influence over what goes into the set. If one supplier gets too big, then they ultimately can have the opportunity to limit that choice in the market and that's bad for consumers and it's interesting that the Justice Department agrees with that view.

>> Fort Town is about to expand a second time. Their niche: quality over quantity.

>> This is among the highest quality strains of barley in the world.

>> They're sold in three states and the District of Columbia, including this D.C. restaurant that sells only craft beers, 555 of them. There's not a Bud or a Bud Light in sight.

Questions:

Consider the competitive force of risk of entry by potential competitors. Large brewers, such as Anheuser-Busch InBev, benefit from which of the following?

a.Customer switching costs

b.Economies of scale

c.Lack of substitute products

d.Government regulations

The notion of a strategic group can be used for diagnosing a firm's competition, positioning and profitability in the industry. What is the plan at Fort Town to stay ahead in their strategic group?

a.To lower their prices

b.To emphasize quality over quantity

c.To emphasize quantity over quality

d.To distribute their product to more retail chains