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Medium Market Entry

Apple of My Eye

#Consumer Goods
ProHub Comment

This is a math-heavy market entry case requiring candidates to evaluate a product expansion decision using revenue calculations and break-even analysis. The case tests operational thinking (production capacity constraints), financial modeling (revenue impact analysis), and strategic considerations (market demand, cannibalization, competitive positioning).

Estimated Time 26 minutes
Difficulty Medium
Source NYU
20 / 100
Bob is a master brewer and has been brewing beer for the past decade. Upon graduating from Stern, he opened a brewery on the Upper West Side called Something Witty that features Belgian Witbier styled brews. While he found early success, he has noticed an increase in customers asking for gluten-free alternatives, such as cider. Bob has hired us to help him analyze his options.

Clarifying Information

  1. Bob’s goal is to continue to be profitable regardless of what expansion opportunity he explores
  2. Currently, Bob only sells bottled beer direct to consumers.
Mock Interview
Interviewer

Bob is a master brewer and has been brewing beer for the past decade. Upon graduating from Stern, he opened a brewery on the Upper West Side called Something Witty that features Belgian Witbier styled brews. While he found early success, he has noticed an increase in customers asking for gluten-free alternatives, such as cider. Bob has hired us to help him analyze his options.

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
Structure Analysis Communication Business Sense Quantitative
Practicing...
Score coming soon
Practice this case with AI Mock Interview

Bob’s brewery faces customer demand for gluten-free cider products. The case requires evaluating whether to renovate existing facilities to add cider production, analyzing the revenue impact ($302,400 annual increase), and determining if production capacity (86,400 bottles/year) can capture the required 0.5% of NYC’s cider market (15.5M bottles).

Key Insights:

  1. Revenue modeling must account for production trade-offs: beer output decreases 6 cases/day (20% reduction) while cider adds 12 cases/day at higher margin ($6.00 vs $5.00)
  2. Break-even analysis revealed candidate can produce exactly enough cider to meet 0.5% market capture requirement, but market demand validation remains critical risk
  3. Candidates should recognize alternative expansion paths beyond facility renovation (new factory, outsource purchasing, partnerships) during initial framework development