Case Study Analysis

Deep Roots
Distillery
 Kwabena Kumah Mohana Vidhya
ID No: 0739977 ID No: 0768377

Group ‘’ 3’’ Ronak Jain

ID No: 0776755
Tanziba Tahsin
ID No: 0776654

Abhishek Bhatia Morteza Maghsoudi

ID No: 0776606 ID No: 0756736
Executive Summary
Key Problems Key Recommendations Key Outcome

• Improving Marketing & Brand • The recommendations will help to

• Capital and resource constraints
recognition – Local build strong brand perception for
are hindering DRD to compete in
promotions / Print/ tourist their differentiating business
the growing alcoholic beverages
experiences & strategy and enhances market
sector
tasting/online/Website, penetration attracting customers
Recommendations locally & globally to become a
/testimonials viable business opportunity to
• How should they plan to expand
mitigate capital and resource
their business and manage their
• Building on product portfolio constraint
value chain activities to achieve
their current and long term to meet consumer trends
financial plans? and leverage the PEI climate
& local sourcing
Problem
Statement
•Deep Root Distillery (DRD) is a small start-up family-run business located on Prince
Edward Island (PEI), a popular tourist destination. Incorporated as a “Craft distillery”
in Nov 2013, leveraged the demand for “specialty alcoholic beverages”

•DRD’s capital and resource constraints are hindering its ability to compete in the
alcohol beverage sector.

•Will the current strategy help DRD achieve its goals ?

•How to allocate and align the companies value chain activities ?

•How to generate an annual net income to achieve a viable business opportunity

in the long term ?
 SWOT Analysis
•Lower market share
•Growing brand recognition & loyalty
•Tight budget / financials as growing business
•Favourable PEI climate, local sourcing
•Lack of ability to meet their employee’s salary
•Craft distiller, known for small batches
•High cost of production
•Organic certification W
S •Less adaption of unique marketing ideas
•Product uniqueness in flavor, versatility of usage
•Product misconception

•Tours, experience & tasting

•Strong Competitors
•Expanding industry & interest for specialty beverages
•Diversity in the market
O T
•Developing website - online sales (they have already
•Long bureaucratic government licensing
received requests for mail order options)
High health tax (25%)
• Growing interest for Organic products
•Environmental threats controlling company’s
organic produce
•Larger Tourist population
•Seasonality /Tourists dependence
•Leverage their farms for orchard & Maple (vertical
integration)

•Positive recommendations
 Business Strategy &
Customer Focus

Differentiation Most attractive

Strategy customer group

§ Well known craft distillery / small batches Tourists

biggest opportunity / value creating through
§ Expertise in mainstream and niche products experiences / better price for differentiated
products
§ Mini’s to take advantage in tourist trade

§ Organic Certification Locals & Restaurants

repeat purchase group
 Porter’s Five Force Analysis

Threat of new Bargaining Bargaining Intense rivalry Threat of

entrants power of power of buyers substitutes
suppliers

2 4 4 1
•Strong competitors with 2 •Availability of •Intense No availability of
diverse products & prices competitive brands & competition &
substitutes
pricing Diversity
•Availability of their
•Product differentiation
own raw materials
(craft/ organic/ quality) •Switching cost is low •Competitor
Brand popularity
•Easy availability of
•Capital Requirements •Limited product range
alternate sources &
suppliers
•Government policies like •Buyers access to
license, tax information

•Supply chain & distribution

•Own unique R&D

Scale of 1 to 5, 1 = extremely low, 5 = extremely high
 VRIN Analysis
Capabilities Valuable Rare Inimitable Non- Competitive Performance implications
substitutable consequences

Product- Uniqueness Yes Yes No No Temporary Above average returns –

(Craft/ Organic) innovate with consumer
preference/trends
Brand recognition & Yes Yes No No Temporary Above average returns -
loyal consumers marketing activities to maintain
R&D (family team, Yes No No No Competitive Average returns
distillery technology/ parity
fine products)
Supply chain – own Yes No No No Competitive Average returns – can leverage
farm/ local supply parity vertical integration for product
access uniqueness
Distribution – product Yes No No No Competitive Average returns – Need to build
presence in DRD Stores/ parity on visibility to standout of
Famers markets/ PEILCC competition
outlet
Marketing (Website & Yes Yes No No Temporary Above average returns - Can
online sale) leverage to improve financial
constraints
 Alternatives
OS
•To increase revenue - leverage on organic
product trends / specialty beverages / increase
reach
OW
•Leveraging tourists population through Tours, •Building marketing promotions: TS
TW
Experience & Tasting / One week Home coming - through Print (G! Magazine, a free
promoting small (Craft) product line / Unique monthly publication); Tourism PEI visitors
Flavor tasting / Versatility of product usage guide(costs around 512$) & also online Focusing on Product
versions uniqueness(Craft / Flavor/
•Growing brand recognition & loyalty - further • Charlottetown Farmer’s market – versatility) to meet the •Seasonality/ tourists
improved by Online sales / Website information / signage boards / DRD signage boards dependence adds to lower
diversity market trend
Word of mouth – recommendations , customer market share / budget
testimonials •To increase market share - constraints
Collaboration with global player for
•Favourable PEI climate, local sourcing can cater penetration in global market / leverage •Long bureaucratic
to leverage opportunities on consumer trend Food Island Partnership (national & government licensing and
towards speciality products / organic products International trade opportunities) High cost of production.
Evaluation Criteria

Financial Feasibility
To achieve a substantial Leveraging product uniqueness
amount of income during their Company Vision to grow in competitive alcohol
next year of operations and to sector and to mitigate their
To become viable business
become viable in the long run capital & resource constraints
opportunity for the young
to pay salary.
family by growing locally &
globally.
 Evaluation of alternatives
To achieve To become viable Leveraging product
Evaluation Criteria / substantial income business opportunity by uniqueness to grow in
Total Score
Alternatives & to become viable growing locally & competitive alcohol
in the long run globally sector

Collaboration with global

player for penetration in global
market- leverage Food Island 3 4 3 10
Partnership (national & International
trade opportunities)

Improving Marketing & Brand

recognition – Local promotions /
Print/ tourist experiences & 5 4 4 13
tasting/online/Website,
Recommendations /testimonials

Building on product portfolio to

meet consumer trends and
4 3 5 12
leverage the PEI climate & local
sourcing
Recommendations
Build Strong Brand Perception Enhance Market Penetration Provide Tours and Tastings

stand out with a strong brand identification Expanding the distribution channels could Give tours and tastings to boost brand
they can include a unique logo, help DRD reach more people. These awareness. Visitors could sample items
packaging, and branding that conveys the might involve collaborations with local and learn about the company's history
company's values and mission. taverns and restaurants, online sales, and
shipment to out-of-town customers. and production process.

Attend Local Events and Festivals Innovate more

Deep Root Distillery may interact with the Deep Root Distillery should constantly try new goods and
community and display its products by production methods to keep ahead of the competition.
attending local events and festivals. Food New flavours, ingredients, and production methods may
and drink festivals, farmer's markets, and be explored.
community events are examples.
Thanks !