Diageo Case Study Essay

Words: 2402
Pages: 10
Open Document
Executive Summary

This is a strategic options case regarding Diageo, PLC. Diageo is a conglomerate focusing on premium alcoholic beverages. The firm originated in 1997 with the merger of Guinness and GrandMet. The company began with the mission to be the strongest premium alcoholic beverage producer worldwide. To that end, they have acquired a majority of premium brands in the spirits industry and a large portfolio of premium wines, while at the same time divesting itself of those companies not in line with its new goals. The major satellites in the food industry were Burger King and Pillsbury, which Diageo managed to sell in 2002 and 2001 respectively. Today they are the controlling producer of spirits in the US and UK, and …show more content…
III. Key Factors for Successfully Competing in the Firm's Industry
a. High quality vineyards and distilleries are required to create the best wines and spirits.
b. Strong supply chain management is needed to connect the producers, the wholesalers and local retail businesses. It is also important in order to take advantage of economies of scale present in consolidating most of the premium spirit brands.
c. A solid marketing division is needed to get the best use out of all the acquired brands of spirits, as well as to establish a name in the premium wines sector.
d. With so many producers, differentiation is an absolute necessity.
IV. Corporate Strategy of the Firm
Diageo is employing a Multi-Domestic Growth strategy focusing on premium wines and spirits.
a. Nature of diversification: Related constrained diversification. Diageo has acquired a number of wine and distilled brands, including 9 of the top 20 premium distilled brands4.
b. Scope of market operations: Diageo is focused on the premium spirit and wine markets.
c. Acquisitions: Recent acquisitions include much of Seagram's portfolio of rum and wine assets.
d. Divestures: Diageo sold Pillsbury to General Mills in 20014, and more recently sold Burger King as well3. It is now almost completely out of the food and restaurant business.
V. Business Strategy of the Firm
a. Focused differentiation
VI. Functional strategies
a. Focus
Show More

Related Documents: Diageo Case Study Essay

Are You Cashing in on Search Marketing? Essay

Diageo’s CSR policy and Foetal Alcohol Syndrome Diageo PLC is a transnational alcoholic drinks company trading in approximately 180 markets worldwide. To meet demands, Diageo has offices in 80 countries and has over 20,000 employees (Diageo, 2012). The company produces leading brands of spirits, wine and beer and last year (financial year ended June 2010) recorded revenues of £12,958 million, an increase of 5.5% to the previous year (Data Monitor, 2011). This shows the company is a clear leader…

Words 2842 - Pages 12

Essay on Econ 201

African consumer consumes beer about three time’s global average, and low taxation, these clearly attracts beer producer around the world such as North American and European companies. Surely the barrier to entry is not easy to overcome as SABMiller and Diageo have successfully made the market hard to compete and make other parties hesitate to come in. The beer demand in Africa is almost a perfect elastic demand.…

Words 2548 - Pages 11

Guinness Essay

analyzing main marketing activities of Guinness- Diageo. An examination of the organization's orientation was analysed, strengths, weaknesses, opportunities and threats peculiar to Guinness Diageo was reviewed in comparison with academic literatures. The competitive advantage Guinness Diageo has over its competitors was reviewed and the impact, positive and negative, of the organization's marketing mix was subsequently evaluated. BACKGROUND OF DIAGEO Diageo is the world's leading premium drinks business…

Words 4026 - Pages 17

Essay about A Global Alcohol Industry

value of distilled spirits relative to beer on the global market. The leading company in terms of net revenue/turnover in 2005 was Diageo plc, followed by Heineken NV, InBev, SABMiller and Anheuser-Busch, Inc. [6]. Globalization in the alcoholic beverage industry tends to lead to greater concentration of ownership and greater dependence on marketing. As a recent study of multinational survival in the global alcohol industry concluded, ‘. . . in non-science-based industries such as alcoholic beverages…

Words 5093 - Pages 21

Essay on International Trade and Countries

Chapter 1: Globalization and International Linkages Learning Objectives and Chapter Summary 1. ASSESS the implications of globalization for countries, industries, firms, and communities. Globalization—the process of increased integration among countries—continues at an accelerated pace. More and more companies—including those from developing countries—are going global, creating opportunities and challenges for the global economy and international management. Globalization has become controversial…

Words 6577 - Pages 27