Grand Metropolitan SWOT Analysis and Strategic Options Essay

2081 Words Mar 15th, 2014 9 Pages
Executive Summary

Grand Metropolitan is a multi-industry company that originally operated in hospitality industry but later expanded into food and beverage. The firm later focuses on the latter industry. Due to the economic growth in developing countries, Grand Metropolitan has the opportunity to expand their target markets abroad. However, political and social factors pose some threats to the company to reach their potential revenue. The company’s strengths include the firm infrastructure, procurements, human resource management, and technological developments being valuable and costly to imitate. The firm’s weaknesses, however, are their support activities not being rare in the industry
…show more content…
Healthier substitutes will have an advantage due to health consciousness and religion. Bargaining power of buyers is strong since competition is high in this industry. The pickiness of these consumers lowers suppliers’ bargaining power.

Technologically, factors that drive the food and beverage industry are the Internet and affordable Chinese machineries. New entrants will have the advantage by buying cheaper Chinese machineries, which lowers their initial expenses. Substitutes will also have the advantage of promoting their products online. With the Internet, consumers can access information regarding the companies in the industry. A company’s good reputation can lower consumer and supplier’s bargaining power and vice versa.

2.2. Opportunities and Threats

The economic growth in developing countries give Grand Metropolitan an opportunity to expand their market globally since Grand Metropolitan’s companies already established a fine image to the. The companies’ image also gives them the leverage to increase demand for their products.

Despite the potential upsides they procure, Grand Metropolitan also faces a number of threats in the industry. Since the barrier entry is low in the food and beverage industry, many newcomers will enter the industry thus bringing more competition to Grand Metropolitan. Minimum