Deep Roots Distillery Harvard Case Solution & Analysis

Deep Roots Distillery Case Study Solution


Deep Roots Distillery (DRD) has been operating for 22 months in a little village warren grove of Prince Edward Island province. DRD is a family owned business of Beamish Orchard, which has its own farm of the fruit with over 500 apple trees .DRD is a small producer of the craft distillery in the province .The newly incorporated company, DRD ,faces intense competition in the market due to the company not being mature enough .The company achieved break-even in 2015.Moreover, the company aims to compete in the market with the existing players. How ever due to its small size, and unfamiliarity with the market, due to which it may face difficulties .Similarly, the company has to construct a supply chain management, in which it needs to focus on how it would source its ingredients.

Those are used to process the liquor and to produce the beverages. Supply chain management also focuses on how the company would source all backward materials, as well as how it would source its supplies to the market. Moreover, it also emphasizes on how the company would operate in the market because being a small player, the question arises as to how should it face the market, through opening its own pubs, clubs to sell the products .In addition to this, the said management focuses on the issue as to how should the company operate in the market by applying the resources .All of the above questions will be answered in this study .Having restricted resources, the company is in doubt as to whether it should start out sourcing its operations by contracting the distributors, and suppliers in the market.

Porter’s Five Forces

Threat of new entrant

The industry has a moderate threat of the new entrants because there are many other competitors in the market having different types and flavored products with attractive prices. Thus, the new entrants would face challenges in order to survive in the market .However ,since the market is a growing market, and due to rising demand of the flavored liqueurs, there is space for the other new entrants in the market. Nevertheless, Prince Edward market is very popular for most of its products, and it might be a driving force of the new entrants to enter the market and fulfill the gap.

Buyer Power

There is a low power of buyers as they have a variety of choices to select the product from the market. Therefore, the customers could be driven by their own preferences and due to the price, however ,they cannot manipulate the market for their own to get lower prices .Hence, this cannot take place in this market because, there is intense competition in the market, and consumers are already purchasing products at competitive prices .Furthermore, the increasing consumers’ demand and rising tourism in the city would not enable the consumers to pressurize the company on its prices.

Power of Supplier

There is a low power of supplier in the market. The market of Prince Edward Island is mature enough that the supplier could not pressurize to increase the service charges, and by delivering lower quality of the services .In  addition ,there is also huge competition in the market, thus the supplier cannot play monopoly over the company. Looking at the market, it would be in favor of the supplier to keep strong and good relationships with the companies.

Threat of Substitutes

The threat of substitutes is high in the market because the consumers’ preferences are driven by either the quality of the product or the price, even sometimes for the adventure to change the taste the product first time. The reason is because there are many tourists that visit the province. Similarly, the market has a variety of products, which might attract the consumers.

Competitive Revelry

The market has strong companies operating that are mature, and have a strong market position .However, there is strong competition in the market, hence, the products’ quality, and a variety of products, as well as the prices,  could have positive outcomes for the company and could help to compete in the market.


The DRD has a good position in producing high-quality liqueurs and spirits, and its hands-on operations that have enabled the company to produce high-quality liqueurs, and spirits as compared to the other market players. The product line of the company has outperformed the competitors in the market. Whereas it has succeeded in creating a loyal customer base, and retention of the customers well .On the other hand, DRD is certified as Atlantic Organic, which indicates that it is a member of PEI Vintners/Distilled beverages Association, which would have a positive impact on the company in the market .Similarly, its product line is well-known to the restaurants, and pubs .In addition to this, the company has a weak point that it is a small organization operating in the market as compared to other old market players.

Deep Roots Distillery Harvard Case Solution & Analysis



How ever,in response, DRD has good strengths to tackle these weaknesses, where it stands strong against the competitors with its competitive products, as a substitute for their products on the competitive prices .Similarly, the company has external threats of the competitors, as well as increasing the threat of the substitute as well against which, DRD also has external opportunities to address the threats that might be dangerous for the company. For example, it could take advantage of the rising demand in the market and expand the operations to tackle the threat of competition. Consequently, this move would be supported by the company’s competitive products, which would also tackle the threat of substitutes as well...............

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