Diageo Case Study

When looking at the economic aspects affecting the industry and Diageo the main concern is the market saturation reached in many of the developed economies worldwide. With demand remaining constant and competition increasing it is important for firms to identify new markets to invest in, with particular focus placed on Emerging markets. Another important development is the growth patterns in the alcoholic beverage market with the demand for beer increasing by 2.7% with particularly strong growth in the premium brands market. In contrast there has been a decline in demand for wine and spirits which are the industries that Diageo has a large market share. There has also been a recent reduction in operating profit of Diageo in Europe, which can largely be explained by the higher taxes imposed by governments who are striving to reduce alcohol consumption.

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.

Diageo’s code for business value creation does involve their tangible assets, however other organizations can easily buy them, so these are rarely the source of competitive advantage. The greatest tangible source that is not easily obtainable by other companies is their own resource to produce raw and unique materials to their own products. Diageo has competitors purchase materials from their owned and operated distilleries and land to make their own product. Intangible assets are difficult to measure and can’t be touched or seen. These assets drive innovation and contribute to Diageo’s success and competitive edge in the market place. Above, examining Diageo’s unique mix of resources explores how Diageo develops certain resources necessary to support corporate strategy. As we have reviewed, Diageo has a purpose, vision, mission and objective, and has strategically implemented internal assets and has the capability and resources to deliver their strategy.

Diageo offers scotch whiskey, other whisk(e)y, vodka, rum, liqueur, tequila, gin, local spirits and beer and brandy; Diageo has the market leading whisky (Johnnie Walker), Vodka (Smirnoff 1818) and rum (Captain Morgan) brands and four out of the top ten RTD brands (Smirnoff

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

The last main competitor is the company Fortune Brands, which is well diversified company specializing in consumer goods. Fortune sells a diverse selection of products ranging from hardware to golf, but it also has a line of spirits that represents 31% of the company’s total sales. Its most notable spirit brands include Jim Beam and Maker 's Mark bourbons. The company has seen many recent changes as it acquired Allied Domecq in 2005, as well as partnered with Starbucks to produce coffee liqueurs. Despite their efforts to diversify and develop new and innovative product such as the Starbucks liquors, Fortune’s growth has not shared in the same success as Brown-Forman and other competitors.

Problem identification: The global beer industry was experiencing increasing competition due to the new and potential mergers and acquisitions of

generated by the North American geography of the Diageo’s markets company had ca. 67% of the dollar-denominated debt. Coupled with the relatively large portion of the short-term debt within its capital structure this exposed Diageo to the risk of the strengthening US Dollar and correlated growth of interest rates. Overall, we can conclude that the capital structure policy (in terms of gearing and interest covering) was in line with the policies adopted by the Diageo’s reference group and helped to maintain the borrower’s Investment Grade status, but the composition of the debt maturities and currencies wasn't really prudent By divesting its non-core businesses Diageo could focus on its core activity deploying its assets in related industries (Alcohol and Beer) with the synergetic effect of using the same distribution channels. Amount of proceeds from the proposed divestitures

The Coca-Cola Bottling Company holds true to their values and strategy, thus creating more value within their brand. Business level strategy implements new products that embodies a fun and sociable atmosphere amongst family members and friends. This ambitious quality in a company is what pushes them past the threshold of complacency to move their product. One way they were able manage their brand globally was by using intense advertisements. Adding to their already famous and highly desired beverage, a business level strategy was instituted to add flavors to their cola product. By adding Cherry Coke and Vanilla Coke to their products, they satisfied the taste buds of millions upon millions of consumers here and abroad. Having the corporate level strategy makes the corporation thrive in the global market. It is also viewed as staying relevant or competitive, by developing more products that would best serve everyone who enjoys their product.

Beers first course of action at O&M was to pick a small group of change thirsty individuals, regardless of their current positions, to help her orchestrate the needed change. She only wanted the “people that got it” to help her clarify the vision O&M needed to recapture lost and win new accounts. She knew that this vision must be brand focused, but which direction was still unknown. Beers called for a secret meeting of these “thirsty for change” individuals in which they agreed upon Brand Stewardship as the focus for O&M’s vision. Even though there was a consensus as to this direction, many were still unsure of how it was to be implemented. Even after reading this case, Brand Stewardship is still an ambiguous term and perhaps on purpose. Beers’ leadership in the past came from her ability to

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.

Making wine is nothing else but a touch of passion, love and few drops of magic. From the first view, wine industry seems very artistic and secret at the same time. There is no doubt that hearing that Robert Mondavi Corporation is going to layoff 4% of its workforce ring the bell to the investors, at the same type the stock price dropping down dramatically makes an impression that the company is going through difficult period as the senior management is upon completing the reconfiguring future strategy. The big decision is whether to get back to original vision, and focus on the domestic market, which bring a 90% of revenues or continue diversification and keep on pursuing the vision of

|For example in 2004 Interbrew and AmBev merged to form the worlds largest brewing company in terms of volume ( ).Since then Miller |

Coca-Cola is the result of a patent medicine formulated in a small southern pharmacy over a hundred years ago. It has grown into a multibillion dollar international company. It also owns one of the most valuable brands in the world. Their Coca-Cola banner has won the world’s top brand 13 times on brand c-consulting firm Interbrand’s annual list (Fraser, 2012). In addition to its main product, Coke, the company owns over 3500 beverages. One of its core competencies is brand building. They have built their brand to have respectability and dependability. Their brand and logo are recognized all around the globe. It has actually become a new known on almost all households worldwide (RNWILKIN, 2009).

This report will consist of strategic management strategies and concepts used by Heineken in developing a successful global brand. It will include a complete analysis of the company and its vision mission and goals in which it is trying to achieve and the steps taken to achieve them. An analysis of the external environment will be conducted with the use of 2 models to observe the external threats and opportunities which Heineken is faced with and the strategic strategies which are used to overcome or take advantage of these situations. An internal analysis of their company resources, organisational structure and culture will also be assessed to determine their competitive advantage over competitors along with a