This document provides an overview of Diageo plc, a global spirits and beer company. It discusses Diageo's business operations in over 180 markets, internal strengths such as its strong portfolio of brands, and weaknesses like its comparatively weak wine brands. The document also analyzes the spirits industry and Diageo's marketing strategies. It outlines Diageo's global strategy and reviews trends in the industry, concluding with strategic recommendations for Diageo's future outlook.

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2.  Company Information
 Context of the industry
 Internal Analysis
 Marketing mix strategies
 The firm’s core strategy
 The future outlook of industry
 Strategic recommendations
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3. Celebrating life every day, everywhere…
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Day(Latin) World(Greek)

4.  180 markets
 Over 20,000 employees
 Offices in 80 countries
 Manufacturing globally:
› Great Britain; Ireland; United States; Canada; Spain; Italy
› Africa; Latin America; Australia; India; The Caribbean
 Company values
› ‘Passionate about customers and consumers’
› ‘Freedom to succeed’
› ‘Proud of what we do’
› ‘Be the best’
› ‘Value each other’
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5. 1/31/2015Diageo
1759
•Arthur Guiness
1934
•MRMA ltd:
public company
1961-1962
•Grand Metropolitan
Hotels ltd
1971-1973
•Entering brewing industry
•Acqusition Watney Mann ltd
1986
•Guiness & Distillers
Company Acqusition
1987
•Foundation of
United Distillers(UD)
1997
•DIAGEO created
•Guiness & Grand
Metropolitan merge
2000
•DIAGEO Sells
Burger King &
Pillsbury
2001
•Acqusition of part of Seagram

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 Beverages industry analysis:
› Beer, Wine and Spirits
 Global beverages market: US$182.9 billion liters
 Market growth: 1-2% annual increase over 1999-
2004 period. 1
 Spirits market shares:
› There is a consolidated very profitable market.2
› Diageo 28%
› Pernod Ricard 19%
› Bacardi 10%
› Brown Forman 6%
› Fortune Brands 5%
› Other Brands 32%
1 Source: Impact Databank top 100 Premium Spirits. February 2009
2 www.diageo.com

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1 Source: Impact Databank top 100 Premium Spirits. February 2009
2 www.diageo.com

8.  Herfindahl-Hirschman Index - SPIRITS INDUSTRY HHI=
282+192+102+62+52+322 = 2330
This means that according to the US Department of Justice, the
spirits industry is Highly Concentrated, as the result is above 1800
 Strategy implications
› Tough for new entrants, need to innovate constantly
› Predictable market
› Social Responsibility is important
 Environmental factor
› Life cycle analysis: Mature stage
› The key factors for success are product innovation, distribution
and product branding
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10.  High volume and low sales growth. Major
challenge: the drinking habits change quickly
 Beer and wine threaten spirits ´share of market
around the world
 The recession has had a negative impact on the
on-trade and spirits sales in bars, clubs and pubs.
 Consumers are more interested in the entire
process and in the differences between products
than ever before.
 Specific marketing towards younger consumers in
the wine industry.

11.  Internal Factors Analysis Summary - Strengths
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Factors
Weight
(a)
Rating
(b)
Weighted
Score (a*b)
Comments
Strong Brands in a
diversified portfolio
0.22 5 1.1
The company has 8 from the
world top 20 premium spirits
brands*
Global reach 0.15 4 0.6
Protects the company from
economic uncertainty in any one
particular region
Fast response to
customer and
consumer trends
0.07 3 0.21
In-depth customer
and consumer understanding.
Constant innovation
Effective
marketing
capabilities
0.10 2 0.20
Diageo spent $358.2 million
advertising worldwide making it
the 94th global advertiser **
Good financial
performance
0.09 4 0.36
£1,204m Strong free cash flow;
15% increase in net sales***
*Impact Database
** AdvertisingAge
*** Diageo

12.  Internal Factors Analysis Summary - Strengths
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*Impact Database
** AdvertisingAge
*** Diageo

13.  Internal Factors Analysis Summary - Weaknesses
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Factors
Weight
(a)
Rating
(b)
Weighted
Score (a*b)
Comments
Comparatively
weak wine brands
0.15 2 0.30
Diageo does not put enough
resources in their wine division
and looses share to Period
Ricard
Not a leader in
emerging markets
0.13 4 0.52
Global trends show that Europe
and NA are not growing and
the only possibilities are in EM
Overdependence
of net sales on
global brands
0.06 3 0.18
In 2009, GPB accounted for
58% of total volume and
contributed net sales of £5,131
million.
No bitter spirit in
portfolio
0.03 2 0.06
Bitters are becoming the new
trendy drink in developed
markets such as NA and
Europe
Total 1 3.53

14.  4 Ps for Global Priority Brands
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Premium

15.  Corporate Strategy
› Long-term sustainability
› Corporate Social Responsibility
› Cooperation with NGOs
› Cooperation with communities
› Cooperation with competitors
› Creating shareholder value
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16.  Strategic Business Unit Strategy
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17.  Companies are looking into Latin America, Asia,
and the Middle East in search for new consumers,
as growth opportunities are hard to find in Europe
and North America.
Source: www.beveragedaily.com
 They have to monitor consumer habits, financial
data and invest in NPD, marketing and sales in
order to success.
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 US will have the most successful spirits market with
U$48,147mn forecasted by 2012 following a growth
of 8.1% from 2008.
 In Europe and the US most of the spirits categories
are predicted to experience higher value than
volume growth.
 Beer will continue to overshadow spirits industry in
Europe, Japan and the US.
 European market is expected to increase 1.5%
each year between 2008 and 2012
 In Japan, whiskey is set for huge growth after
2011/12
Source: Innovations in Spirits: Key product trends, growth strategies and forecasts to 2012. 1 April 2010. www.officialwire.com

19.  For the North American market:
› Industry resilience
› Economic recovery
› Attractive demographics
 For the European market:
› Russia opening for imported spirits – Scotch whiskey
› Focus on at-home drinks
 For International:
› Grab the growing middle class population
› Main opportunities in LATAM (6-7% growth) and Africa
 For Asia Pacific:
› Make partnerships with local players
› Take on technological and consumer trends for marketing
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Drink responsibly!!!