Diageo

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Diageo

• MGT 498 Capstone Presentation
• December 3, 2007

Celina Aguilar Michael Albillar Wes Gaultney
Brandon Gregoire Jennifer Kolker Kelly Kulifay
Rob Weaver
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Who? What? Diageo?

• Formed in 1997
• Merger of GrandMet and Guinness
• Beverages Wineries and Distiller
• Diageo is a global company
• 180 markets globally
• LSE (DGE) 12/4 1,063.000 -16.00 -1.48
• NYSE (DEO) 12/4 87.50 -1.81 -2.03
• The world's leading premium drinks business
• Smirnoff, Johnnie Walker, Captain Morgan,
  Baileys, JB, José Cuervo, Tanqueray, Guinness,
  Crown Royal, Beaulieu Vineyard and Sterling
  Vineyards wines, and Bushmills Irish whiskey

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External Environment

• Few competitors
• Large capital requirements
• Acquisitions and takeovers are a risk
• Hard for new companies to enter
• All competing for market share
• Techniques
• Sponsorship of major events
• Limited offerings focus is one single brand

• Brown-Forman
• Constellation Brands
• Budweiser
• Molson Coors
• Competing Products
• Strategy is to build brand recognition
• Financial Strength Vs. Diageo

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Diageo Structure

• Government regulations
• Exchange rates

• 4 Regions
• Meet specific demands

North America-most developed and most
lucrative.markets. Very complex cultures and dem
ographics
Europe-Includes Russia. Poses as the most
Competitive and dynamic.
International-Includes Latin America, Middle
East, and Africa.. Difficult and undeveloped mark
ets. Heavy marketing and
advertising.
Asia Pacific-immeasurable population size.
Growing GDP, growing demand for alcoholic produc
ts.
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Strategy Business Level

• Differentiation Strategy
• Design drinks that fit consumer wants
• Research determines consumer preferences
• Determine attributes/positioning for each market
• 55 of worlds top premium brands
• Global-local advertising strategy locally
  relevant, single global theme

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Innovative Global Marketing
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Strategy Functional Level

• Superior quality
• Enhances reputation
• Differentiates
• Customer responsiveness
• Johnny Walker Lebanese ad
• 100M investment in Premium Scotch Whiskey
• Efficiency
• Lowers cost structure
• Focus on innovation
• Guinness Widget
• Super Premium Scotch

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Superior Value Chain Management

• In/Outbound Logistics and Marketing/Sales give
  Diageo a huge competitive advantage

In/Outbound Logistics (Supply Chain)

• 2003 Purchased supply-planning software
• Demand Driven Scheduling
• Vendor Management Inventory (VMI)
• Production managed more effectively and in a
  collaborative way
  
• Drives operational excellence, increases
  competitive advantage, controls cost

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Total Value Creation
Value
Marketing Sales
Utility

• Higher value placed on premium drinks
• Consumer will pay premium price
• Creates brand awareness
• Strong brand loyalty
• Brand equity

Price
Cost
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Experiencing Results
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Control

• Strategic Controls
• Everything is linked together to the values of
  the company.
  
• Marketing is key
• Limit on what is acceptable (focus on
  responsibility in every action)
  
• Employee
• Surveys are done every year to allow employee
  feedback regarding goals and values of the
  corporation.

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Financial Strength
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Diageo Survey
Conducted at local bars and an online polling site

• Drinks People Think of First
• Jose Cuervo Tied for 1 (45)
• Tanqueray 1 (43)

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Recommendations

• Uniquely associate Diageo with its products
• Small logo on all products
• Tagline at the end of television ads.....
• Ex. brought to you be Diageo or another Diageo
  product
  
• Follow the lead of such brand association leaders
  as Sony, Coca-cola, BMW, and Apple
  
• Nutritional Labeling
• Growing trend in health-conscious consumers
• Currently use www.KnowYourDrink.com
• Does not target non-internet users
• Provide pamphlet on in-store displays
• More informed decisions

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