Scaglia Swot Analysis
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Scaglia SWOT – Analysis:INTERNALStrengths:Scaglia has 30 years of experience within the distribution business model.The company has a strong relationship with its customers.It posses appropriated distribution facilities (in compliance with all norms).Its distribution market is very demanding in the supermarket sector.Its vertical integration allows a super-fast distribution cycle.Scaglia has a loyal and qualified stuff.The business is a leader on the beverage distribution market in the Ajaccio area.It has developed a strong network relationship with suppliers such as large-scale beer suppliers (Heineken).Weaknesses:The company does not have any experience in the manufacturing business model.It is a small family business and therefore might lack on the right competences and resources.The business does not have appropriated facilities and equipment to create its own Local Identity Beer (LIB).Its distribution market is decreasing in the RHC (restaurants, hotels and catering services) industry.Its brand visibility could be weak, as beaches are long.Cost of production.Funds are limited.EXTERNALOpportunities:Social trends: there is a strong tendency towards local products (both in the supermarkets and within the RHC sector). There is an increase towards higher added value beers.Sales are strong in the summer season, which has greatly increased (April to October), resulting in a longer period of high sales.Expanding into different markets, such as continental France.Threats:Highly seasonal market; Corsica’s population goes from 250,000 people to over 2 million tourists during the summer time. However there is a low season from November to March, resulting in the company not operating to its full capacity all year around. This could lead to staff and stock-control issues.Competition is strong, especially with local producer (such as for example Pietra, Colomba, Kriska), independent breweries in Europe and multinationals, which very often have created a strong positioning within their customers mind and offer an innovative promotional mix.Economic crisis.Rising costs.Segmentation criteria / Target market:I would recommend that Scaglia  creates a LIB product, which fulfills the needs of both tourists and locals in Corsica. By entering these two segments, the business would ensure a year round production. In other words, tourists would boost sales in high-season, whereas locals, could push sales during the winter, which remains off-season. Characteristics of target market:Tourists (over 2 million during the summer time) and locals (250,000 people):
TouristsLocalsFrench tourists (=occasional consumers in summer time).Tourists who highly value local identity products.Beer lovers (in France more than 50% of the population drinks beer).Adults: men and women, however higher percentage of consumers is men.Those who buy beer in supermarkets and consume beers in hotels, restaurants and bars, especially beach bar.Middle class to upper socio-occupational group with a higher-education degree.Those with an annual income above €36,00050% of consumers are aged between 35-64.59% are married.Majority are natives (= regular consumers throughout the year).Natives who appreciate local identity products.Beer lovers.Adults: men and women, however higher percentage of consumers is men.Those who buy beers in supermarkets and consume beers in restaurants and bars.Middle class to upper socio-occupational group with a higher-education degree.Those with an annual income above €36,000.50% of consumers are aged between 35-64.59% are married.Positioning:I would recommend Scaglia to position its brand as an authentic, local business, which offers a unique essence of Corsica: “Experience the unique tastes of Corsica” (several options to choose from, to satisfy different consumers’ needs – please see product description for further information). Additionally, the company should position itself as a family business model, which is involved in every step of the manufactory; from creating the product to distributing it. Porter’s strategy:I would recommend the business to choose the Focus strategy – Differentiation, defined by Porter as an approach to concentrate on particular niche markets by understanding the dynamics of that market und unique needs of customers within it. The key to success is to add value to the product or service as to increase differentiation, therefore demonstrating a better understanding of your customers’ needs. This strategy is usually recommended for small businesses, which are not able to serve a broader market, because if they do, they risk competing against better-resourced corporations.Product:I would recommend that Scaglia creates a signature local identity beer with a degree of alcohol between 4Âş and 5Âş, which is classified as a luxury beer. This segment overall enjoys a higher average consumption rates (1 or more beer per day, especially during the summer time), as it has a lower alcohol level than for example special beers (5Âş of alcohol or more) and is therefore easier to drink. This type of beer is undeniably on the rise and should therefore be available all year around. Additionally, Scaglia could offer limited editions and seasonal products, in order to fulfill more customers’ needs and wants. This strategy would create several options so that beer drinkers would have more than one choice. In other words, this would mean that tourists and loyal regular customers would always have the opportunity to consume the traditional signature beer, but at the same having a further option to experience a new product (a different taste of Corsica). This strategy should offer different characteristics (such as different color, brewing techniques) and capture the essence of seasonal Corsican flavors, such as offering for example a refreshing blend of citrus in the summer time and a slightly richer flavor chestnut blend in the winter time). The shape of the signature beer should be a small glass bottle, as the majority of LBI consumers prefer bottles to canned beer (only, 10,2%). Traditionally, consumers associate bottled beer with higher added value. The color of the beer should be dark brown; in order to protect the beer from UV rays as to guarantee its quality. Still, the company could think of a unique shape, in order to attract consumers’ attention and differentiate itself from the competitors, as this does not have serious consequences. However, for a seasonal or limited product the company could consider a canned beer, as recent studies have proved that canning is more convenient and practical (less expensive; easier to produce; facilitates transportation; more environmentally-friendly, etc.) but also better for a beer’s quality, as cans prevent heat, light and air from getting in. However, if the company should go for a canned limited or seasonal beer, it is imperative beforehand to train everyone in the distribution channel (especially people who are directly upselling the products to the costumers, such as sales assistants in shops or food and beverage servers in RHC sector), the reason being, the majority of people have a different perception of a canned beer and don’t know the advantages of it, but only associate only negative characteristics to it.