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In addition, the beer industry during the 1990’s was considered stagnant showing very little growth. This adds to the intensity of competition as the remaining competitors scuffle over the potential customers.
The bargaining power of the customers is very high. There are many different substitutes and options for customers to go with, which puts the pressure on companies to have high quality products and customer service to retain these customers. The buyer has very low switching costs where as the company does not have such a luxury. The microbrewery by definition is a smaller firm. Allowing customers to switch to another supplier can have disastrous effects and ultimately could put the company out of business...
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