Strategic Plan Homework help for Njosh

Diageo is a worldwide company involved in the supply of both alcoholic and non-alcoholic drinks promising consumer satisfaction by providing high quality goods. However, Diageo operates in an environment, which is dynamic, and it becomes hard to predict the future. In addition, Diageo Beverage Company has major strengths as well as several weaknesses as well opportunities and threats.

Major strengths of Diageo is that it has an advantage when it comes to marketing and promotion of its products which are luxurious in nature and are distributed globally. It also has a well-established, consistently changing market niche (products, price, promotion and place). Other strengths include the ability to forecast the new emerging companies with a high growth possibility and putting necessary measures to regulate them. For example, acquisition. Diageo has also the ability to use vicarious learning, which is the use of the celebrities and models to advertise their products.

Diageo weaknesses include lack of well-established competencies, dependence on emerging at a high rate markets for a large number of the annual sales, problems in legal activities such as exportation to other countries as a result of existing tariffs and Diageo products are in the maturity stage of the product life cycle and therefore which is characterized by huge expenses in advertising their products, declined profits and sales.

Some of the opportunities that Diageo Company would face include potential for growth of both the alcohol and non-alcohol drinks market, increased awareness, which results to potential customers realizing their needs hence an increase in demand for the luxury products. Lastly, there is an increase in the growth demand in Asia and the pacific region.

Threats faced by Diageo include the rise in the cost of raw materials used for production, increased market competition and strict rules and regulations more so in the United States.

Some of the external forces that affect Diageo include:

i. Social cultural factors. For example, use of consumer beverage choices to show individuality has a positive effect, which depicts Diageo as a premium brand. In addition, use of high-end brands increased usage worldwide results also has a positive effect, as consumers want to be identified with specific premium brands from Diageo.

ii. Legal factors. For example, the trade tariffs have a negative effect as it can result to difficulties impacting Diageo when it comes to importing of the emerging trends and exportation of its products. In addition, there exist strict rules and regulations, which regulate alcoholic beverage advertising. This has a negative effect as it increases the high cost of advertising.

iii. Global factors. For example, emergence of markets or customers with higher disposable income levels has a positive effect as this will result in increased sales hence high profits for Diageo. Moreover, taking India as an example, which has had a growth of alcohol demand with 30% for the past three years have a positive effect as these are the key factors of growth. However, the slow economic growth in the European continent has a negative effect, as Europe is the major market for its products with a share of 30%. Therefore, this results in decreased sales and therefore reduced profits.

iv. Technological factors. For example, the installation of distillers that enable the production of gluten free drinks is currently trending. Diageo is therefore competitive as it has the necessary capital and the resources needed to create the gluten free products. Secondly, the emergence of online purchasing and selling of a products offered by Diageo Company has a negative impact on Diageo as there is increased competition worldwide.

v. Demographic factors – a large population in the age bracket of 15 – 34 years. This may result into increased sales since research has it that mostly, anybody in that age bracket spends their money to buy alcoholic or non–alcoholic drinks. Further research also shows that most of the whisky produced is consumed in India and the rate of consumption is gradually growing and it’s expected to be 70% in the year 2017. This will lead to increased sales as most of the Indians consume large quantities of distilled products.

vi. Economic factors. For example, favorable interest rates, low taxation for importation have a positive effect. This will encourage production, increased exports and increased sales and profits.

Some of the internal forces that affect Diageo Company include implementing the necessary strategies. For example, revenue synergy, which involves the carriage of Diageo products resulting into, increased sales, cost reduction procedures by using the same platform for two different products. For example, use of single celebrity to advertise the Diageo products and products from other companies. Other strategies such as improved customer performance will facilitate better handling of complaints, inquiries and feedback in addition to programs to retain customers as well as increased loyalty. Justice and equity should be the main basis for promotion. Diversity and inclusion, which will include a combination of cultures and ethnicities.

References

Blanchard, D. (2010). Supply chain management best practices. Hoboken, N.J.: John Wiley

& Sons.

Grant, R. (2012). Contemporary strategy analysis. Hoboken, N.J.: Wiley.

Subba Rao, P. (2010). Strategic management. Mumbai [India]: Himalaya Pub. House.