Yuengling’s beer sales were up 225% in the last six years, but that the company’s old Eagle Brewery facility, which could only produce 500,000 barrels of beer per year, could not keep up with growing demand. After temporarily rerouting beer from Maine, Massachusetts, and Rhode Island to its home state and largest market, Pennsylvania, the company considered five options for expanding beer production: (1) adding new storage and finish tanks to Eagle Brewery, (2) outsourcing production to another company, (3) buying an existing brewery from another company, (4) building a new factory, or (5) “doing nothing.”

Question

Yuengling’s beer sales were up 225% in the last six years, but that the company’s old Eagle Brewery facility, which could only produce 500,000 barrels of beer per year, could not keep up with growing demand. After temporarily rerouting beer from Maine, Massachusetts, and Rhode Island to its home state and largest market, Pennsylvania, the company considered five options for expanding beer production: (1) adding new storage and finish tanks to Eagle Brewery, (2) outsourcing production to another company, (3) buying an existing brewery from another company, (4) building a new factory, or (5) “doing nothing.”

Answer 1

Now we have the background. What is the question?

Answer 2

To determine which option Yuengling should choose to expand its beer production, several factors need to be considered. Here's an explanation of each option and how one might approach making a decision:

1. Adding new storage and finish tanks to Eagle Brewery:
- This option involves expanding the existing facility's capacity by installing additional storage and finish tanks.
- To evaluate this option, Yuengling should consider the cost, time required for construction, and the potential increase in production capacity.
- Cost-benefit analysis should be conducted to determine if the investment will lead to sufficient returns.

2. Outsourcing production to another company:
- This option involves partnering with another brewery or brewing company to produce Yuengling beer on their behalf.
- To determine the viability of outsourcing, Yuengling needs to consider the quality control, cost of outsourcing, potential concerns about maintaining its brand identity, and the reliability and capacity of the chosen partner.

3. Buying an existing brewery from another company:
- This option involves acquiring an established brewery facility from another company.
- Factors to consider include the cost of acquisition, the condition and capacity of the existing facility, the location's suitability, and the potential benefits in terms of immediate production increase.

4. Building a new factory:
- This option involves constructing a completely new brewery facility.
- Considerations include the cost, availability of suitable locations, time required for construction, potential regulatory hurdles, and long-term production capacity.

5. "Doing nothing":
- This option means maintaining the status quo and not undertaking any expansion efforts.
- A thorough analysis of the potential consequences of inaction is required, such as the impact on market share, competitiveness, and customer satisfaction.

To make a decision among these options, Yuengling should assess the following:
- Current and projected demand for its products
- Financial resources available for expansion
- Timeframe for implementation
- Potential impact on product quality and brand image
- Market and competitive analysis
- Regulatory requirements and restrictions

A comprehensive evaluation, including cost-benefit analysis, market research, and consultation with experts, may help Yuengling determine the most suitable option for expanding its beer production.