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Harvard Business School
9-381-092
Rev. December 20, 1984
DO
Hudepohl Brewing Company
Bob Pohl, age 32, was appointed general manager of the Hudepohl Brewing Company
following the unexpected death of the company’s president in March 1980. Since 1975, Pohl had
managed Hudepohl’s marketing response to rapidly changing conditions in the brewing industry.
The death of the president, a relative, left Pohl as the only member of the founder’s family active in
the day-to-day activities of the business.
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Pohl was optimistic about the company’s future despite Hudepohl’s recent disappointing
performance. Since 1978 the brewery had been operating at less than 40% of its one-million-barrel1
capacity, and in 1978 the company had experienced the largest operating loss in its history—$538,000.
After adjusting for gains on Hudepohl’s securities portfolio and a tax loss carryback, net income for
that fiscal year was $95,161, down from $268,611 in 1977.
After only three months as general manager, however, Pohl was predicting improved
earnings in the near future. A 7% gain in sales during the first four months of 1980 seemed to confirm
his expectations. Pohl felt that by 1983 Hudepohl would achieve a 10% growth in sales.
Background on the Company
Based in Cincinnati, Ohio, Hudepohl was the twentieth largest brewery in the United States.
(Financial information is presented in Exhibits 1, 2, and 3.)
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Ownership and Organization
Hudepohl’s board of directors consisted of seven members, all descendants of founder Louis
Hudepohl. Chairman John Hesselbrock, age 73 and the uncle of Bob Pohl, held almost total control
over the board but did not take an active role in daily management decisions. The board, which made
the final decision on major expenditures, was generally conservative. Pohl felt that this had been
appropriate in the past, when other breweries were also conservative, but that a far more aggressive
approach was necessary in every area now.
1 The term barrel...