rofitability is also changing due to changing lifestyles, stricter laws, and a declining 18-34 age group.COMPETITION AND COMPETITIVE FORCESThe rivalry among existing competitors is strong. Demand for the product is slowing. In order for a company to increase market share, another company has to lose it. Switching costs are low for consumers. Because switching costs are low, Competition is very intense to gain new market share. The beer industry is a cut throat business with extreme competition. Because they are in a declining market, it order to stay alive it must be survival of the fittest. Potential of new entrants is moderate. Capital requirements can be a very inhibiting factor as to whether a company can start up. New entrants must also establish a very strong and sound distribution network that is all to often not that easily attainable. Many laws and regulations may also inhibit a new entrant from coming into the market.The threat of substitute products is moderate in the industry. Some people believe that wine coolers will continue to steal market share form the beer industry, while others believe that wine coolers are just a fad that will die down. Pre-mixed drinks can also be considered a substitute. Bacardi breezers and Jack Daniel's country cocktails are a example of this. In a bar, a person has a choice among many different drinks. Malt beverages(ZIMA) can also be considered a threat.The power of suppliers is moderate. Depending on which company is bigger will decide who has the leverage between the two. The suppliers have power due to the demand for agricultural products. Canneries have power in their ability to produce packaging for the breweries. If the brewery is big enough, they have more leverage as to where they get their supplies and as to how much they pay for them. The power of buyers is very strong. Switching costs are very low thus enabling a consumer to buy whatever brand he wants. Beer dr...
