Global Company :
Global Company
Global Priority Brands :
Global Priority Brands
Critical Success Factors :
Critical Success Factors
Industry Overview :
Industry Overview Threat of New Entrants: MINIMAL
Significant capital investment requirements
Tight regulations
Existing competition can leverage their economies of scale
Rivalry Among Existing Competitors: FIERCE
Concentration is high, with four companies making up nearly 80% of the domestic market share
Competition is still intense among the major players, and is based on price and branding
Bargaining Power of Buyers: HIGH
Minimal/zero switching costs
Threat of Substitutes: MEDIUM
Beer and wine are the primary substitutes, with marketing, taste and price are all factors in determining choices
Premiumization :
Premiumization
Changing Demographics :
Changing Demographics
Globalization and Shifting Powers :
Globalization and Shifting Powers
Recommended Actions :
Recommended Actions Market specific products to new drinkers
Use social media to promote brands that appeal to young drinkers
Track, influence and respond to online conversations about each brand
Re-invest in ready-to-drink products
Invest in young (legal-age), “in” celebrities as spokespeople
Promote and expand super-premium segments
Invest in ultra- and super- premium brands
Counter recession-driven trading down by creating more “levels” to encourage consumers to return to a luxury item
Invest in leading brands in major growing countries
Create a local priority brand in the Chinese white spirits segment
Explore other possible acquisitions in China and India
Market to the new upper- and middle-class among emerging world powers
Increase investment in the promotion of global priority brands (as well as select local priority brands) to consumers in developing markets, such as India and China.
Summary :
Summary
References :
References BrandZ. (2010). BrandZ Top 100 Global Brands. Millward Brown. p. 122-125. Retrieved May 28, 2010 from http://brandz.ogilvyeditions.com/top100/
Cetron and Davies (May 2010) Trends Shaping Tomorrow's World. The Futurist. p. 47-48
CNBC Video. (February 11, 2010). Diageo CEO on Earnings. Retrieved May 11, 2010 from http://www.cnbc.com/id/15840232?video=1410717256
Coleman, Frank (February 2, 2009). Industry Recession Resistant; Not Recession Proof but Premiumization Trend Continues. AgriWorld SA. Retrieved May 28, 2010 from : http://www.agriworldsa.com/article-archive/legislation/us-liquor-industry-enhaces-advertising-marketing-guidelines
Diageo plc (2010). Annual Report. Retrieved May 27, 2010 from: http://annualreport2009.diageoreports.com/
Faith Popcorn (2010). TrendBank. Retrieved May 27, 2010 from: http://www.faithpopcorn.com/
Geller, Martine. (February 17, 2010). Diageo CEO says bling is out, premiumization alive. Reuters. Retrieved May 27, 2010 from: http://www.reuters.com/article/idUSTRE61G5U220100217
Hoovers (2010). Diageo plc Fact Sheet. Retrieved May 23, 2010, from: http://premium.hoovers.com/subscribe/co/factsheet.xhtml?ID=hhrxrtrfrtsthf
IBISWorld Industry Report. (February 2010). Liquor and Spirits Production in the US: 312140. Retrieved May 27, 2010 from: http://www.ibisworld.com.ezproxy2.library.drexel.edu/industryus/default.aspx?indid=290
Maas, John. (November 20, 2008). Capitalize on Affordable Luxuries. BNet. Retrieved May 28, 2010 from: http://www.bnet.com/2403-13241_23-251349.html
Marsteller, Dan (April 20, 2010). Diageo Sees Uptick In Premium-and-Above Spirits. M. Shanken Trade News. Retrieved May 27, 2010 from: http://www.tradenewsonline.com/content/show/id/7349
Porter, Michael E. (January 2010) The Five Competitive Forces That Shape Strategy. Harvard Business Review. p 79-93.
Trendspotting.com. (May/June 2010). Statusphere. Trend Briefings. Retrieved May 28, 2010 from http://trendwatching.com/trends/