Beyond Meat: On the Route to Profitability?
(6 pages of text)
Case (Pub Mat)
Beyond Meat Inc. (Beyond Meat), a manufacturer of plant-based protein products founded in 2009 and based in Los Angeles, California, had become a success, despite supply chain and manufacturing issues. However, as competition flooded the market, the firm’s founder and chief executive officer (CEO) faced a number of challenges: Beyond Meat was investing more and more in differentiation and innovation, and even refining the recipe of its bestselling Beyond Burger—something the CEO himself considered risky. Beyond Meat filed for an initial public offering in May 2019, and by the end of July 2019, the company’s share price had increased by over 800 per cent, but analysts considered Beyond Meat stocks to be overvalued given that the company’s increasing revenues and high-priced products had not prevented increasing losses. Still, Beyond Meat was expected to disrupt the animal-based protein industry. What should the CEO do to justify the valuation of Beyond Meat? How should he handle competitive forces? Did his venture hold any potential to disrupt the animal protein industry?
This case is intended for undergraduate- and graduate-level courses on business strategy, strategic marketing, or innovation. It deals with the scope of disruptive innovation of the traditional, animal-based protein industry by plant-based protein products, with industry-specific competitive forces, and with value-chain analysis as a route to profitability. After working through the case and assignment questions, students will be able to do the following:
- Explain Porter’s Five Forces framework, and employ it to identify actions that could make an industry more attractive for a firm.
- Apply value-chain analysis to evaluate sources of revenues and costs to enhance the profitability of a firm.
- Critically analyze whether plant-based protein products disrupt the animal-based protein industry or result in the creation of a strategic group within the industry.
- Evaluate whether a firm is overvalued.
United States, Medium, 2019
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