...US$19 billion merger of Guinness and Grand Met to form Diageo, the world’s largest drinks company. Guinness was the group’s top- selling beverage after Smirnoff vodka, and the group’s third most profitable brand, with an estimated global value of US$ 1.2 billion. More than 10 million glasses of the world’s most popular stout were sold every day, predominantly in Guinness’ top markets: respectively, the UK, Ireland, Nigeria, the USA and Cameroon. However, the famous dark stout with the white, creamy head was causing some strategic concerns for Diageo. In 1999, for the first time in the 241-year history of Guinness, sales fell. In early 2002 Diageo CEO Paul Walsh announced to the group’s concerned shareholders that global volume growth of Guinness was down 4 per cent in the last six month of 2001 and, more alarmingly, sales were also down 4 per cent in its home markets, Ireland. How should Diageo address falling sales in the centuries- old brand shrouded in Irish mystique and tradition? The changing face of the Irish beer market The Irish were very fond of beer and even fonder of Guinness. With close to 200 liters per capita drunk each year- the equivalent of one pint per person per day- Ireland ranked top in worldwide per capita beer consumption, ahead of the Czech Republic and Germany. Beer accounted for two-thirds of all alcohol bought in Ireland in 2001. Stout led the way in volume sales and accounted for 40 per cent of all beer value sales. Guinness, first brewed in 1759 in...
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...Guinness 1.0 Company History Guinness is part of the global Diageo business. Diageo was formed in 1997 through the merger of GrandMet and Guinness. Their main business is the premium drink market. Seagrams was added to the portfolio in 2000. Diageo possess the broadest and most recognized collection of premium drinks brands. Their brands include Guinness, Smirnoff, Baileys, Johnnie Walker and Gordon’s. Diageo provide a lot of information about its vision, marketing and brands on www.diageo.com which should be a key source for your research. Guinness is one of Diageo’s priority brands. It is the number 1 stout in the world, brewed to suit local tastes in 50 countries and sold in more than 150. For more information on the brand you can download the attachment. The Guinness website www.guinness.com provides more information on the history of the brand, examples of TV, poster and press advertising over the years and much more. It is also the hub of all the current online marketing to the existing Relationship Marketing consumers. 2.0 The Marketplace Guinness is GB’s fifth largest beer - 1 million pints sold every day in the UK. Guinness considers itself to be within the broader “beer” category, not restricting itself to the specific “stout” category within which it holds an effective monopoly. Its main competitors by volume are the likes of Fosters, Carling, Carlsberg, Stella Artois and John Smiths. The most widely distributed beer brand in this...
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...US$19 billion merger of Guinness and Grand Met to form Diageo, the world’s largest drinks company. Guinness was the group’s top- selling beverage after Smirnoff vodka, and the group’s third most profitable brand, with an estimated global value of US$ 1.2 billion. More than 10 million glasses of the world’s most popular stout were sold every day, predominantly in Guinness’ top markets: respectively, the UK, Ireland, Nigeria, the USA and Cameroon. However, the famous dark stout with the white, creamy head was causing some strategic concerns for Diageo. In 1999, for the first time in the 241-year history of Guinness, sales fell. In early 2002 Diageo CEO Paul Walsh announced to the group’s concerned shareholders that global volume growth of Guinness was down 4 per cent in the last six month of 2001 and, more alarmingly, sales were also down 4 per cent in its home markets, Ireland. How should Diageo address falling sales in the centuries- old brand shrouded in Irish mystique and tradition? The changing face of the Irish beer market The Irish were very fond of beer and even fonder of Guinness. With close to 200 liters per capita drunk each year- the equivalent of one pint per person per day- Ireland ranked top in worldwide per capita beer consumption, ahead of the Czech Republic and Germany. Beer accounted for two-thirds of all alcohol bought in Ireland in 2001. Stout led the way in volume sales and accounted for 40 per cent of all beer value sales. Guinness, first brewed in 1759 in...
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...Title Page Executive Summary Contents 1.0 Introduction Diageo plc is a multinational manufacturer and distributor of alcohol products. They are the owner of many well-known brands such as Johnnie Walker, Crown Royal, Smirnoff and Guiness. Currently, Diageo is operating in approximately 180 countries in the world. (marketline 2015) This report will aim to explain and analyze the influences of external factors and their importance to the business of Diageo and provide some critical suggestions to the organization to improve its performance. 2.0 Task 1 - A brief overview of the main external factors Diageo plc divides their international market into 5 main different segments base on geography: North America, Western Europe, Africa, Eastern Europe and Turkey, Asia Pacific, Latin America and Caribbean. In financial year (FY) 2014, the company has a significant loss to compare with FY2013: 9.2% in overall revenues, 19.9% in operating profit and 14.5% in net profit (marketline 2015). According to Ivan Menezes, chief executive of Diageo, the flop in revenues was the consequence of challenges from macroeconomics and market. (Eads 2014) The FY2014 annual report shows that there were significant declines of recorded sales in all 5 segments of the business. It is undeniable evidence that external factors create many difficulties for the business. Therefore, this report aims to explain the impact and importance of some main external factors such as economic factor, politics...
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...watched the Guinness Wheelchair Basketball commercial, I immediately played it over again. I couldn’t believe what I just saw. It is no overstatement that this commercial resonated with me unlike any I have ever seen before. It’s not because I love Guinness. It’s not even because it breaks the stereotype for a beer commercial with its uplifting nature. As someone who has a muscle disease and may soon be in a wheelchair myself, it hit home. What do I mean? It is very easy for a brand to mess this type of ad up. When you decide to include someone in a wheelchair, there is always the possibility that you might accidentally create an ad that is exploitative or condescending to the person with the disability. You run the risk that someone might take it the wrong way, or question your motives. Unfortunately, because of this, the advertising world tends to play it safe and feature only able-bodied individuals in commercials. So any deviation from that norm, and it is newsworthy. That is what makes this Guinness ad all the more remarkable. It is newsworthy, yes. Yet, instead of sparking controversy or being universally panned by critics for tying their product to social inclusion, Guinness has been praised. Their premise is simple: Guinness is the beer for those who go to great lengths to help their friends, and who believe that “the choices we make reveal the true nature of our character.” Any brand can theoretically make that claim with their product. But when Guinness makes the...
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...Case Study 3 “Diageo, Plc.” Introduction บริษัท Diageo ถูกก่อตั้งขึ้นในปี 1997 จากการควบรวมกิจการระหว่างบริษัท Grand Metropolitan plc. กับบริษัท Guinness จนกลายเป็นบริษัทอาหารและเครื่องดื่มที่ใหญ่เป็นอันดับ 7 ของโลก หลังจากการควบรวมกันเป็นบริษัท Diageo ต้องการจะเน้นไปที่เครื่องดื่มแอลกอฮอล์เพียงอย่างเดียว จึงตัดสินใจที่จะขายธุรกิจอาหารไป ได้แก่ Pillsbury โดยขายให้กับ General Mills และต้องการจะออกจากธุรกิจ fast food โดยการออกขายหุ้น IPO ของ Burger King นอกจากนี้ บริษัท Diageo ยังเข้าซื้อกิจการประเภทแอลกอฮอล์ ได้แก่ Seagrams ทำให้บริษัทขยายใหญ่ขึ้นและมีความแข็งแกร่งทางด้านธุรกิจแอลกอฮอล์ ก่อนที่จะมีการควบรวมกิจการนั้น Guinness กับ Grand Metropolitan มี rating อยู่ที่ AA และ A ตามลำดับ แต่พอหลังการควบรวมกิจการเป็นบริษัท Diageo ทำให้มีถูกลด rating เหลือเพียง BBB โดยRating Agencies ได้แก่ Standard and Poor’s และ Moody’s เนื่องจากเกิดความไม่แน่นอนของนโยบายทางการเงินของบริษัท บริษัท Diageo จึงต้องควบคุม Capital Structure ให้มีประสิทธิภาพ โดยการรักษาระดับของ interest cover ratio ไว้ 5-8 เท่า และคงระดับของ EBITDA/Total Debt ให้อยู่ที่ 30% - 35%ถ้าบริษัท Diageo ต้องการรักษา rating ให้อยู่ที่ระดับ A+ นอกจากนี้บริษัทจะต้องใช้นโยบาย Trade-off Theory ซึ่งเป็นการเลือกระหว่างความเสี่ยงและผลตอบแทน กล่าวคือบริษัท Diageo ต้องเลือกระหว่างต้นทุนความล้มเหลวทางเงิน (Financial Distress)และผลประโยชน์ทางภาษี (Tax Shield) โดยสามารถคำนวณจากผลประโยชน์ทางภาษีในแต่ละปีและการประเมินความน่าจะเป็นที่จะเกิดความล้มเหลวทางการเงิน บริษัทมีการใช้ Monte Carlo Analysis ซึ่งใช้การวิเคราะห์แก้ปัญหาที่ยากหรือไม่สามารถแก้ปัญหาได้...
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...1°) How would you explain the Guinness pricing strategy and the underlying assumptions about consumer behavior when Diageo reports for 2005 that in the UK and Ireland the Guinness sales volume fell by 3 per cent, but a value growth of 4 per cent was achieved in both markets, mainly due to price increases? 2°) Motivated by the success of this pricing strategy, should Diageo continue to increase the price of Guinness? HOW TO EXPLAIN GUINNESS PRICING STRATEGY ? - Pricing: Not just a financial and commercialization part => belongs to marketing and sales strategy - Pricing affects : - sales - market share - revenue - profit => Right pricing : a direct implication to the product success in the market => The product needs to remain PROFITABLE Pricing strategy needs to reach the main objectives of a company : PROFIT – TURNOVER – VOLUME - MARKETSHARE -Price sensitivity of shoppers differs between the distribution channels Discount hypermarket : people check carefully to buy a beer-pack Bars / Pubs : ready to pay much more for a beer than in the grocery -3 Ways to determine a price : - cost pricing : based on the company expenses - competitor pricing : based on the competitors prices - value pricing : how the product is perceived by the customer ? An aggressive price increase policy - A National icon : recognized worldwide •55% of the world stout market •Market leader in 4/7 regions : •Western Europe / North...
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...Travel guide of Dublin By Alexander P. Vinther As I stumbled out of a club called “The Mess” in the Temple Bar-area with the tunes of Journeys “Don’t Stop Believing” bursting trough my mind, I thought to myself: “This has been one hell of a trip!” It was our last evening in Dublin and it would be an underestimation to call it anything but absolutely brilliant! It started with a two-course dinner where I among other things had a rib-eye steak grilled to perfection and then of course a pint of Guinness to support it. A couple of the guys and I then went on to our “regular” bar, and by “regular” I mean: “We had been there a few times.” Here we listened to probably the best musician I have ever seen. He was a white man with long blond dreadlocks hanging from the top of his head, and it was not just the fact that he absolutely mastered the guitar; he also played a drum and a mouth organ to the verge of flawlessness, and don’t even get me started on his voice, it was just brilliant. Sadly for me, I was so stupid not to get his name written down anywhere, so for now he’s just remains a mystery. On that experience we marched on down the street with cosy and harmony-filled pubs surrounding us and ended up at a new pub where another musical experience was awaiting us. “Badass-Bar” was the name, and as lame that might sound it was in fact one of the best places we visited that night. A young fellow was seated here with his guitar, where he played a lot of classics and we all sang along...
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...billion merger of Guinness and Grand Met to form Diageo, the world’s largest drinks company. Guinness was the group’s top- selling beverage after Smirnoff vodka, and the group’s third most profitable brand, with an estimated global value of US$ 1.2 billion. More than 10 million glasses of the world’s most popular stout were sold every day, predominantly in Guinness’ top markets: respectively, the UK, Ireland, Nigeria, the USA and Cameroon. However, the famous dark stout with the white, creamy head was causing some strategic concerns for Diageo. In 1999, for the first time in the 241-year history of Guinness, sales fell. In early 2002 Diageo CEO Paul Walsh announced to the group’s concerned shareholders that global volume growth of Guinness was down 4 per cent in the last six month of 2001 and, more alarmingly, sales were also down 4 per cent in its home markets, Ireland. How should Diageo address falling sales in the centuries- old brand shrouded in Irish mystique and tradition? The changing face of the Irish beer market The Irish were very fond of beer and even fonder of Guinness. With close to 200 liters per capita drunk each year- the equivalent of one pint per person per day- Ireland ranked top in worldwide per capita beer consumption, ahead of the Czech Republic and Germany. Beer accounted for two-thirds of all alcohol bought in Ireland in 2001. Stout led the way in volume sales and accounted for 40 per cent of all beer value sales. Guinness, first brewed in...
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...I have chosen Dublin, Ireland as my destination choice. I chose this place because I’m part Irish and I’ve always wanted to visit. I think there would be many cool things to do and see in and around Dublin. “Celtic tribes arrived on the island between 600 and 150 B.C. Invasions by Norsemen that began in the late 8th century were finally ended when King Brian BORU defeated the Danes in 1014. English invasions began in the 12th century and set off more than seven centuries of Anglo-Irish struggle marked by fierce rebellions and harsh repressions. A failed 1916 Easter Monday Rebellion touched off several years of guerrilla warfare that in 1921 resulted in independence from the UK for 26 southern counties; six northern (Ulster) counties remained part of the UK. In 1949, Ireland withdrew from the British Commonwealth; it joined the European Community in 1973. Irish governments have sought the peaceful unification of Ireland and have cooperated with Britain against terrorist groups. A peace settlement for Northern Ireland is gradually being implemented despite some difficulties. In 2006, the Irish and British governments developed and began to implement the St. Andrews Agreement, building on the Good Friday Agreement approved in 1998.” Ireland is located in Western Europe, occupying five-sixths of the island of Ireland in the North Atlantic Ocean, west of Great Britain. “Ireland has a mild, temperate climate with a mean annual temperature of around 50°F. Rain showers can occur at any...
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...Note: Solve any 4 Case Study’s CASE: I Managing the Guinness brand in the face of consumers’ changing tastes 1997 saw the US$19 billion merger of Guinness and GrandMet to form Diageo, the world’s largest drinks company. Guinness was the group’s top-selling beverage after Smirnoff vodka, and the group’s third most profitable brand, with an estimated global value of US$1.2 billion. More than 10 million glasses of the popular stout were sold every day, predominantly in Guinness’s top markets: respectively, the UK, Ireland, Nigeria, the USA and Cameroon. However, the famous dark stout with the white, creamy head was causing some strategic concerns for Diageo. In 1999, for the first time in the 241-year of Guinness, sales fell. In early 2002 Diageo CEO Paul Walsh announced to the group’s concerned shareholders that global volume growth of Guinness was down 4 per cent in the last six months of 2001 and, more alarmingly, sales were also down 4 per cent in its home market, Ireland. How should Diageo address falling sales in the centuries-old brand shrouded in Irish mystique and tradition? The changing face of the Irish beer market The Irish were very fond of beer and even fonder of Guinness. With close to 200 litres per capita drunk each year—the equivalent of one pint per person per day—Ireland ranked top in worldwide per capita beer consumption, ahead of the Czech Republic and Germany. Beer accounted for two-thirds of all alcohol bought in Ireland in 2001. Stout led the...
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...Case: Diageo Ple Analysis Fact Pattern This is a strategic options case regarding Diageo PLC. Diageo is a conglomerate focusing on premium alcoholic beverages. Diageo is a United Kingdom based consumer product company. Diageo was formed in November 1997 from the merger of Grand Metropolitan Plc. and Guinness Plc., two of the world’s leading consumer product companies. The company began with the mission to be the strongest premium alcoholic beverage producer worldwide. Diageo Plc. is the seventh largest food and drink company in the world with a market capitalization of nearly £24 billion and annual sales of over £13 billion to more than 140 countries. Although the largest and the fastest growing business was the Spirits and wine business, with sales growth of 8% for the year and 15% operating margins and growth in total operating profits of 15%. And the second largest division was Guinness Brewing, which produced and sold beer to markets around the world. And the Diageo was in the process of integrating the two business, which may result in cost reductions of £130 million annually. 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. Diageo’s two remaining business were in packaged and fast foods. As a matter of fact, the stock price of the company was far low from the average stock price after 7/1/99. In 2000...
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...Diageo Plc Case: Diageo Plc Analysis Fact Pattern This is a strategic options case regarding Diageo PLC. Diageo is a conglomerate focusing on premium alcoholic beverages. Diageo is a United Kingdom based consumer product company. Diageo was formed in November 1997 from the merger of Grand Metropolitan Plc. and Guinness Plc., two of the world’s leading consumer product companies. The company began with the mission to be the strongest premium alcoholic beverage producer worldwide. Diageo Plc. is the seventh largest food and drink company in the world with a market capitalization of nearly £24 billion and annual sales of over £13 billion to more than 140 countries. Although the largest and the fastest growing business was the Spirits and wine business, with sales growth of 8% for the year and 15% operating margins and growth in total operating profits of 15%. And the second largest division was Guinness Brewing, which produced and sold beer to markets around the world. And the Diageo was in the process of integrating the two business, which may result in cost reductions of £130 million annually. 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. Diageo’s two remaining business were in packaged and fast foods. As a matter of fact, the stock price of the company was far low from the average stock price after 7/1/99...
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...Personnel Management - basically an administrative recordkeeping function, at the operational level. - attempts to maintain fair terms and conditions of employment, while at the same time, efficiently managing personnel activities for individual departments etc. - It is assumed that the outcomes from providing justice and achieving efficiency in the management of personnel activities will result ultimately in achieving organisational success. Human Resource Development - is concerned with the development and implementation of people strategies, which are integrated with corporate strategies, and ensures that the culture, values and structure of the organisation, and the quality, motivation and commitment of its members contribute fully to the achievement of its goals. * is concerned with carrying out the SAME functional activities traditionally performed by the personnel function, such as HR planning, job analysis, recruitment and selection, employee relations, performance management, employee appraisals, compensation management, training and development etc. But, the HRM approach performs these functions in a qualitatively DISTINCT way, when compared with Personnel Management. Main Differences between Personnel Management and HRM * Personnel management is workforce centered, directed mainly at the organisation’s employees; such as finding and training them, arranging for them to be paid, explaining management’s expectations...
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...Guinness on Handicapped Equality Last month, Guinness came out with a unique beer commercial. Rather than a commercial portraying beautiful, young woman, it flips the switch by presenting a group of athletic, beer-drinking men who are defined as much by their kindness as their physical strength. Guinness managed to put a positive spin on disability, portraying people with disabilities as having just as much fun with good friends as people without disabilities. As the men partake in an intense game of wheelchair basketball, there is soothing and emotional music playing in the background, which sounds very inspiring to viewers. The ad starts off with a ball being shot at the hoop, we do not see who shot it. I automatically assumed that it was likely someone without a disability shooting because most athletes are not disabled. After I saw who was playing, I right away immediately assumed they were all disabled because they were all putting in an equal amount of effort and all in wheelchairs. The ad does not point out who the actual disabled player is until most of the men stand up after the game, except for one who remains in his wheelchair. This revealed that they were using the chairs to include a friend who has a physical disability. There is no audience; they are not looking for accolades. They are simplyenjoying fellow athletes on the same level. Society has often created a stereotype of people in wheelchairs to be as weak, fragile, and incapable. The men are playing very...
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