To analyse the external environment, we used PESTLE and Porter's five forces.

Firstly, we
looked at PESTLE. Politics, we have found out the two main points. one is drink driving
regulations and the other one is night levy. Every pub, bars and clubs need to apply for night
levy. According to uk government, the night levy is that the authorities could charge the
people who have levy to sell alcohol in late night. Thus, pubs of brew dog will increase their
cost which will be one of threats. Next, we also pointed out the two economic issues which
are sterling price and cost of inputs and production. The price of fuel gas increased by 20
pence in last 3 years, and the energy price increased by 3.8 in oct, which was the second
time in 2018. Furthermore, lifestyle changed has a big impact on brewdog. Nowadays,
people more concerned about health. The percentage of people drinking alcohol one day
per week has decreased to 5% from 2005~2017. Moreover, social media is a chance for
brewdog to increase brand awareness and growth their business. Brewdog use Twitter to
promote their products and campaigns. This gives them a competitive advantage as they
can reach out to millions of people. The last two points are legal and environment. Tax will
be the main point for legal. An increase in alcohol tax can increase the price of the good
which can decrease the desire for customers to purchase beer. The government is
emphasising that organisations need to be more environmentally friendly. As a result of this
brew dog should try to become more sustainable. Cans are eco-friendlier in comparison to
glass bottles. They weigh less, and they are easier to transport. However, for traditional
brewing techniques bottles are perceived as tradition and consumers tend to prefer bottles
over cans.

Porter’s five force

Rivalry amongst competitors is extremely high and there is intense competition. There are
many competitors in the market for craft beers, mainstream beers and soft drinks. The
government have emphasised how too much alcohol consumption leads to poor health. This
has led to consumers opting for lower alcohol alternatives and soft drinks. Next, bargaining
power of suppliers is moderate to high. To produce beer, they will need supplies; glasses,
cans, fuel, energy, ingredients to produce the beer. There are many suppliers for glass and
cans that brew dog can choose which provide the best price and quality. However, there
isn’t much options for fuel and energy companies. Thus, these companies have power to
bargain. What’s more, buyers have high bargaining power due to there are many
competitors in the market for craft beers, mainstream beers and soft drinks. There are many
different brands of craft beer, such as harbour, wildcard, and so on. There is almost no
switching cost when customers change the brand of beer. Therefore, when the beer price of
brew dog increases it can cause consumers to purchase beer from other brands which
charge a lower price. Threat of entry is low to moderate because start-ups require capital to
enter the beer industry. It is hard to enter the craft beer industry due to the increase of
competition and how dominant existing brands have become. At the same time, the
government have increased the tax and regulations which reduces profits and increases
their costs. The threat of substitutes. Is high. There are many different brands of craft beer
and mainstream beers consumers can choose. All of these are substitutes. Soft drinks also
are substitutes of brew dogs, due to people cutting back on alcohol consumption.
Based on the external analysis, we have found out that consumers trend and lifestyle
is changing. People have become more concerned and aware of their health.
Consequently, the consumption of alcohol has declined. Additionally, people have
opted to to consume low alcohol beverages or soft drinks. This could be an
opportunity for brew dog to produce the low alcohol alternatives or a range of soft
drinks.
They can provide more choices for customers and increase their consumer base.
The issue with entering an existing market will be the complications to compete
against leading and dominant competitors. Some key questions include how can
brew dog build a brand image and another market and how will they fit into another
market.
The other point is the trend of pubs becoming more family friendly. As brew dog has
their own pubs, this will be the other opportunity for brew dog. They can transfer their
pubs to become family friendly pubs. For example, they can provide an
entertainment space for children.