Product Mix

You have been hired by a “nano-brewery” to assess its financial status and conduct market research to recommend how it could expand its products and establish its strategic goals. You will use the information about the company provided in this document as the basis for your evaluation and recommendations.
PROJECT INSTRUCTIONS
Using the company information found in this document, thoroughly evaluate the nano-brewery and present a 10-to 12- page report that addresses the following topics:
1. Using the included balance sheet, calculate the following financial ratios: current, net working capital, quick, and debt-to-equity. Then explain what each ratio tells you about the company and how it can inform your assessment of the company’s financial strength.
2. Conduct market research for a new product line and make a recommendation. This section should include an explanation of the research processes used to make the recommendation, making sure to use a variety of peer-reviewed, credible resources, and take into consideration the current product line.
3. Develop and explain strategic goals for finance, product, and expansion, providing an explanation for each. Use the “SMART” methodology as a guide for setting your goals.
4. Write a communication strategy for how the owners can explain the
strategic goals to their new employees. How should they present the information? What points should they emphasize and why? What should they consider about each individual employee when developing a communication plan?
You are given the following information for use in the project completion:
  •  Company Information
  •  Product Mix
  •  Balance Sheet
Keep in mind that this is a fictional company and not all details have been provided. Be sure to state any assumptions you use as part of your analysis if the details are not included in this overview.
Company Information

The nano-brewery is tiny—so small it cannot even be called a micro-brewery. The brewery is located in your local community or in a nearby community. Founded two years ago, the brewery was finally licensed to open for business a year ago after completing the required processes through the state liquor control board.

The brewery is a corporation owned by two stockholders, each with an equal share. One partner focuses on the brewery operations and the other  on sales and administration. The brewery just hired two employees (so new
that their salaries are not yet on the balance sheet). One employee was hired as the brewery assistant and the other will focus on brewery and external sales. The employees will be working part-time and each will earn $15,000 per year. As part of the new employees’ orientation, the owners want to provide information about the strategic direction of the company.
Currently, the brewery has three craft beer products as well as a small line  of apparel and logoed items (t-shirts, glasses, hats). The owners have been selling beer faster than they can make it. They are maximizing revenue with their current distribution. Their primary sales are bottle and growler sales out of the brewery for which they have the highest margin and the
highest labor intensity. They currently have five keg accounts in local restaurants and bars, which provide a much smaller profit margin (about
half ), but require less labor to sell.
The brewery is open for sales Friday, Saturday, and Sunday and currently brews about three times a month in its two tanks. Each brew cycle in a tank produces between 14-16 kegs of beer and takes 21 days to complete (the shortest possible brew cycle for craft beer). The tanks are operating at maximum production capacity with less than 24 hours between emptying the keg and beginning the next brew.
Given the success they are currently experiencing, the owners are considering adding another type of beer or other product to their mix.  However, they aren’t sure of the financial strength of their company and would like your assessment.
Product Mix
The brewery has the following beer products. The brewery rotates its production among these beer flavors, with two available at any one time:
  •  Pale Ale (Most Popular)
  •  India Pale Ale (IPA)
  •  Wheat beer
The beer is sold in the following quantities:
  •  Full Keg-$185
  •  Pony Keg-$85
  •  ½ Gallon Growler-$17
  •  650ML Bottle-$10
The brewery has a few logoed items for sale as well:
  •  Men’s/Women’s T-shirts-$20
  •  Pint Glass (variety of styles)-$5
  •  Knit Cap-$5
Balance sheet
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