McPhee Distiller Harvard Case Solution & Analysis

Background
Kingsley spent her whole life in whiskey industry. She was born and workedon the Island of Islay which is considered as theheart of Scotch Whiskey.At the age of 35 she became master distiller at the Piercy Distiller Company. During the tenure in Piercy Distiller, Kingsley receives many awards and accolades. Kingsley has many creative ideas which she wants to convert into a business but due to thestrict portfolio of Piercy she was unable to do so.
In 2013, Kingsley tookretirement from Piercy and shifted in Vancouver Island British Columbia, Canada.There she established her own whiskey business in 2014 by the name of her grandfather McPhee. As thedemandfor Scotch whiskey grewsteadily the market of American Bourbon Whiskey showed a high growth, therefore, Kingsley started to sell American Bourbon Whiskey in Scotch whiskey style in British Columbia.
She intends to differentiate McPhee Distiller through limiting the production and maintaining the quality of the whiskeys along with this, she also intends to sell whiskeys in barrel instead of bottles.Furthermore, she used equity source of finance for McPhee Distiller.
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The results of the company are not appealing.After the second year of trade company reports a huge amount of loss which disturbs Kingsley. After the second year, she is considering whether her business model is profitable or she made anerror by selling whiskey in barrels.Along with this, she is also considering either she can improve her operations or should leave the industry.
Business model
A business model defines that how an organization delivers, creates and captures values.The process is mainly consideredas apart of business strategy.Business model mainly defines the core aspects of the organization asits purpose, targeted customers, strategies, infrastructure, sourcing, offering and trading practices. (Michael Morris, 2005)
Currently,Kingsley operates in whiskey industry.It used to sell American Bourbon Whiskey and conducted its operations in Vancouver Island, British Columbia. In last few years, the whiskey industrywas going through a boom phasedue to which the demand of Scottish and Irish whiskey had increased dramatically as there werelimited supply of these whiskeys, therefore, the customersstarted to use American Bourbon Whiskey to fulfilltheir demands due to whichthe demand of American Bourbon Whiskey has been increasing rapidly from 2007 to 2013.It increased from 500000 barrels to 1.2million barrels. AsAmerican Bourbon Whiskey is in aboomperiod, therefore,we can conclude that the suppliers chosen by McPhee Distiller areappropriate.However, themajority of Bourbon is produced in the markets of Kentucky and Tennessee, therefore, the placeschosen by Kingsley does not seem appropriate.
Furthermore, Kingsley used to sell American whiskey in barrels. Although by doing this McPhee saved some cost whichwas consumed in thelast stage of making whiskey butit is an industry norm to sell whiskey in bottles therefore, new method will take time to gain market share. Along with this, we also analyze that McPhee Distillers sold 275 barrels in both years but from this trade, approximately 45% in thefirst year and 64%in thesecond year was sold to Piercy Distiller which indicates that the market shares of the company decreases in these two years.Therefore, we can say that the method (barrels) choose by the company is not anappropriate one...............

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