Swot_Analysis

SWOT ANALYSIS: MCKNIGHT’S PUB 1 SWOT Analysis: McKnight’s Pub Denise Cook BUS/210: Foundations of Business James Rosa 10 February 2013 SWOT ANALYSIS: MCKNIGHT’S PUB 2 The business plan that was chosen to conduct a SWOT analysis of is McKnight’s Pub. McKnight’s Pub is an Irish bar, which is located in the heart of downtown Portland, Oregon, that provides a wide variety of spirits, from domestic and imported beers to hard alcohol with concentration on imports from Ireland. In addition, the pub offers a limited menu of light food and snacks and specialty items for holidays. McKnight’s Pub’s philosophy was to create an old world pub style atmosphere that attracted it high-end clientele and offered excellent customer service. The strengths of the company is that it has been in business for one hundred years and it is strategically located in one of the most outstanding downtown places in Portland in order to attract the middle-class and upper middle-class working public during lunch and after quitting time. The building itself is one of the oldest still standing in Portland and has an old world style to it. Another strength of the pub is that it purchases large quantities of alcohol from local and regional distributors such as Kitsap Distributors and Darian Beverages and most of the food comes from Portland Produce. McKnight’s Pub receives discounts when certain volumes are purchased and the pub seeks to maintain good relations with its distributors in order to insure high-quality products are delivered on time. The threats of this company are the drop in clientele due to the rise of microbreweries in the Portland area. Some of the closest threats to McKnight’s Pub in terms of location and quality are Columbia River Alehouse and Brewery, which is the largest threat because it has created an excellent reputation for its microbrews by retaining the services of Michael Evan, a former brewmaster for Henry Weinhards. Columbia River specializes in beers with lots of hops, such as hefeweisens and the establishment just had a very favorable article written about its cuisine in the Oregonian. Also, its separate bar has an established clientele that attracts the young college crowd. Another threat to McKnight’s Pub is Fitzgerald’s Sportsbar, which is located only one block from McKnight’s Pub and it attracts a niche market of sports fans especially as it has widescreen TV’s and hosts parties during Portland Trailblazers games. During other times, it attracts some of the SWOT ANALYSIS: MCKNIGHT’S PUB 3 customers that McKnight’s is targeting such as the late night crowd. The final threat to McKnight’s Pub is Argosy Brewery, which is a local brewery more oriented toward production and distribution of its premier lagers and stouts in the pacific northwest region. Its tasting room has recently been expanded into a full-time pub and has gotten great reviews and its location, which is close to the waterfront, draws a large crowd. As far as for the opportunities part of the analysis, McKnight’s strategy is to leverage its existing advantages of location, attractive 8 p.m., established clientele, and reputation coupled with its new brewery to create a value added product/service experience to its existing customers and to enhance appeal to attract the beer appeal to McKnight’s. In short, the company seeks to create a value-added approach to its drinking establishment and bring in new customers to achieve both a higher margin than previously experienced and increase overall profitability through new customers. Another good opportunity for McKnight’s Pub is that they plan on advertising its new pub through newspaper and magazine articles, focusing primarily on entertainment and lifestyles publications. They are also planning on running ads in local journals and put up four billboard advertisements. McKnight also viewed past experiences from other taverns and brew pubs with the use of radio advertisement and McKnight’s management plans on running ads with three of the local radio stations most listened to by young professionals aged 25-40. McKnight’s Pub retained the services of an advertising consulting firm in order to ensure the maximum efficiency of advertising. The only weakness in which I found in the business plan was that McKnight’s markup prices from that of wholesale generally runs between 15-20% depending on the drink or meal. McKnight’s Pub also leases their jukeboxes, pool tables, and other amusements by the leasing company that is under an existing contract and they service all of the leased equipment as well. I think with the new expansion, McKnight’s Pub will probably have to hire more personnel in order to be able to provide better customer service because currently McKnight’s Pub has five employees including Mr. Davis and four bartenders and table attendants. Starting in March, Mr. Mark Hudson will be hired as Brewmaster SWOT ANALYSIS: MCKNIGHT’S PUB 4 and Miss Tracy Sherman, one of the table attendants, will be trained by him as an assistant and there are no further plans for personnel changes. In summary, as the question posed would I invest in the pub, I would have to say that I probably would not invest in the pub because McKnight’s Pub exists in a highly competitive industry whose environment creates low margins due to the high amounts of pressure placed upon participants from customers, suppliers, other rivals, potential entrants, and participants products. This has created a fragmented industry in which no one participant has significant market share. Customers have a great deal of power and influence in this industry since there are virtually no switching costs. Even with the rise of microbreweries, many customers still find that most pubs have the products that they seek making the pub visit itself undifferentiated. References: Jones, G.R. (2007). Introduction to business: How companies create value for people. New York, NY: McGraw-Hill/Irwin. Iris Pub Bar Business Plan: McKnight’s Pub. 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