Diageo Case Study

Diageo was created when Grand Metropolitan, plc and Guiness, plc merged in 1997. While the Diageo name is not well known to consumers, its brands are among the most famous including Guinness, Smirnoff, Johnnie Walker and Cuervo. The company recently decided to focus on a strategy to grow through its spirits, wine and beer businesses and divest of its Pillsbury and Burger King subsidiaries. This case study will focus on the proposed capital structure decisions of Diageo.

It is believed the amount of wines imported into Nigeria annually is in hundreds of millions of dollars, however, effort to gather the exact statistic has not been possible because wine import is grouped along with food and beverages. Liquor houses and bars are open year round. From an economic standpoint demand for wine and other western alcoholic beverages continue to rise as the standard of living improves.

“In my opinion, the Case would be improved by including the following summary” An American agriculture of the nineteenth century Cyrus McCormick, invented a company that produced farming equipment called McCormick Harvesting Machine Company. In 1902 his son Cyrus McCormick II merged the company with three competitors renaming it the International Harvester Company. By the late 1980’s the company had moved from producing farming equipment to manufacturing automotive products, trucks, and school buses. In the late 1980’s International Harvester company was renamed Navistar International Corporation. Over the years NIC changed and one of the most dramatic changes was the relationship with its longtime auditor Deloitte. (Knapp, 2015)

SABMiller and Diageo are two largest beer producer in Africa. ”SABMiller, if combined with its partnership with France's Castel Group, sells roughly 60% Africa’s beer by volume. Diageo’s also expands its operation successfully that Senator Keg, its supercheap beer, is also now number two most popular beers in Kenya. As these giant brewers monopolized Africa’s beer market, it can be said that the market has an oligopoly market structure, and both pursue identic operations, so the market can be labeled as competitive. The interdependence that is happening between both brewers makes the competition happens. As SABMiller produces Impala that is half price from its previous beer Manica, Diageo produces Senator Keg to balance it. Diageo

This product is imported from France and is being sold for recreational purposes such as; socializing drinking, enjoyable times, and elegance class. It is said that nothing draws us together more than alcohol. Sitting down and having a drink with fellow peers usually leads to cheerfulness, laughter, and an all-around good time. The people in the visual allow one to remember the stress reliever that alcohol helps sustain. When individuals look at this depiction they receive a constant image of a worthy time running through their mind, so that when they go to the store and see the ultra-premium vodka they remember the advertisement and think about purchasing the merchandise. That then allows the buyer to put themselves in a similar setting, in which they relive the advertisement in their head. The people in the visual are socializing among each other which brings upon another reason to the selling of the product. It is show that this product is appropriate to have during social events as the group is seen with their drinks held high with positive facial expressions shown. The idea of this advertisement is to show that every brand represents something different, especially in the liquor industry. Since Sean “Diddy” combs is an equal share venture, he applies the alcoholic beverage to his lifestyle, which is rich and

In 1998, entrepreneur and MBA Guillaume Cuvelier was preparing for the launch of his new distilled spirit, Svedka Vodka. Cuvelier has decided to start a vodka company after working many years in the spirits industry. Vodka makes up a large share of the spirits American’s drink at 24% of all alcohol consumed (Zuckerman). Vodka consumption is also rising across the US. Svedka is going to be a newcomer in the vodka marketplace going up against many big opponents in products such as Smirnoff, Grey Goose, Stolichnya and Absolut. Cuvelier’s Svedka has gotten rave reviews from many critics for its quality, so a successful marketing campaign will not depend much

Maritz, Jaco (2010), “Report: Doing Business in Africa, the Coca-Cola way” http://www.howwemadeitinafrica.com/doing-business-in-africa-the-coca-cola-way/2433/. Date accessed May 17, 2013.

Inflation. After the inflation, the currency will devaluation. So that some lower income residents of the declining standard of living and the majority of difficult to raise the standard of living. It made people enjoy the pub industry’s service impossible.

These two-company’s economic characteristic include their market size and growth rate from the early 2000’s to 2010. Coke and Pepsi have struggled for years in the carbonated and non-alcoholic sector. According to Barbara Murray (2006c) "But as the pop fight has topped out, the industry 's giants have begun relying on new product flavors and looking to noncarbonated beverages for growth.” (Murry, 2006). For instance, Coke boasts in the advertisement as the king of the soft drink; as a consumer of both products, I agree. About 15 years ago, I was selected to participate in a critiquing of Coke and Pepsi products. Additionally, my travel to Africa in 2007 and 2010 provided the same raving review for the Coke Cola products. Apparently, Coke and Pepsi have been rivals for ages locally, regionally, nationally, multinational, and globally, therefore, one expects them to have an on-going rivalry when marketing the high-energy beverages.

Coca Cola’s international achievement can be attributed to numerous of things, but in order to think globally one must first think locally. This is the main message that Coca Cola Company place huge emphasis on whenever they are entering a country. (Miller) Coca Cola has formatted its approach strategically using a tactical method, this is done to provide the appropriate marketing activities and beverage to its customers. As part of Coca Cola vision to taste the same around the world, they have chosen to standardize its product and manufacturing process. In Trinidad and Tobago the local name for Coca Cola is “Coke”. From the perspective of consumers the key conceptual categories are not the flavours and colas that marketer hold in high regard, but what we refer to locally as the ‘black’ sweet drink. (Miller) Trinbagonian’s are particularly fond of sugar and sweet products this is linked to the days of the sugar cane field. Coke came into Trinidad in 1939, while under the British Government. (Miller)

Diageo, one of the world’s leading consumer goods companies, was formed from the merger of GrandMet and Guinness. In 2000, the company announced its intention to sell its packaged food subsidiary, Pillsbury, and 20% of its Burger King subsidiary. Because of the restructuring opportunity, the company wanted to rethink its financing mix.

Barclays is known a consistent performer delivering steady profitability results, 20% increase in profit before

In conclusion, Diageo had successfully adapted to African buyer behavior, but at the other hand they aggressive approach has eminent risk cannibalize their Guinness (beer) products. Although Diageo, Pernod Ricard and other international spirits companies operating in Africa all run responsible-drinking programs and say their products should be consumed in moderation. We all know the risks are high in Alcohol abuse and its negative

This case describes the global development of wine industry, and how new world wine players occupied the global market share from old world wine producer gradually. It is very interesting that author selected the Britain as the sample stage for the battle between the new world wine campaign and the traditional campaign.

The Vodafone case study has given us a good overall view of the company and shown the companies good and bad points, whilst showing the mobile phone business as a whole and explaining the ups and downs of the industry.