Opportunities and Threats involved in a business. Strengths Adagio one of the 500 Fortune Company It has 30% of global market share It owns 20 spirit brands (Sunroof, Johnnie Walker.. ) Trades In 180 markets It has an annual turnover of 9 billion pounds It Is a world leader In stout brand A well owned brand even by non consumers
It uses different types of packaging: bottles, cans Weaknesses Stout only accounts for 1 . 1% of world beer sales An aggressive price increases policy It has not been profitable over the last years Opportunities People stay more at home- Guinness surgery launch in order to have a beer with a ‘pub experience’. Sponsorship In rugby teams in order to promote themselves in a higher volume The new Irish theme pub are lighter, cleaner and appealing to women, In order to add a new line appealing for women with softer taste or even distribute more through those pubs.
Threats Competition: Murphy by Heinlein, Castle Milk Stout by SAAB Miller Deteriorating demographics: younger drinkers go to wine and spirits. They also buy beers and drink them at home due to the banning of smoking. Conclusion of the Soot Analysis Guinness or the firm Adagio is an important company with recognized brands, with different varieties of products. In order to increase market share and turnover Guinness should make a Matrix portfolio with all the products and classify them in each category In order to Identify different strategies that could be helpful to increase profits and the product awareness.
Although It has a big market share, Guldens (the stout beer) accounts for little sales In the beer sector, therefore I would recommend to research consumer tastes and see whether Is profitable to offer new type of beers if the market is not very saturated. Competition is always an important competition is offering as well as the price they are establishing. Also they could think about any new promoting strategy or price in order to gain customers from competition.
Due to the new trend of young people staying at home rather than going o the pub, they must take advantage of it and offer consumers and experience similar to the pub but available at home, like the Guinness surgery and the rocket widget to retain the white foamy when consumed. Adaptation or Standardization Standardization means when a brand develops standardized products marketed worldwide with a standardized marketing mix, normally called mass marketing.
Whilst adaptation means customizing the products in a way that satisfies better the market and maximizes revenue. Guinness uses an adaptation approach, offering different varieties of beers to different regions. Adaptation makes the product different to suits different regions due to its climate, geography or unstructured that pressures them to change it in order to obtain benefits. As they offer a stout beer, which is not the most popular amongst all the beers they need to reach customers expectations and appeal products to them.
Therefore Guinness introduced the ‘Guinness Draught Extra Cold’ into I-J and Ireland in order to meet the young drinkers who started to move from pubs to houses due to the prohibition of smoking. This is a cultural and legal reason why Guinness had to adapt its products to obtain a Geiger market share through this two countries. It could be also a competitive offering towards the beer market in order to obtain a higher market share by bringing new consumers to the stout beer.
Another products adapted to its market is the ‘Guinness Extra Stout’ which is mainly distributed in Europe, the later throughout Africa, Asia and the Caribbean, ‘Malta Guinness’ an alcohol-free beer, distributed through Africa mainly because a large segment of the population rather prefer to drink non-alcoholic drinks. And the ‘Guinness Extra Smooth’ in order to meet another argue of the market who currently drink and prefer smoother beers.
In conclusion, using an adaptation approach can be really helpful in order to penetrate in the market, to have a better product performance in different regions appealing to many customers, to decease costs due to varying local inputs and the most important, to increase sales as they are meeting better the cultural preferences on each region. Global Marketing Strategy There are four main international strategies in order to promote a product globally. It depends on the product you are marketing, weather is the same product or a efferent one and the communication used to promote it, the same or different one.
Guinness has used strategy two: Product extension Communication Adaptation: Same product, different communication. Guinness has promoted its product differently through different countries, establishing a higher budget in markets were the market is high to maintain loyalty and in the other side, those were the Guinness market is low to aware the population about the good. In Ireland and I-J they have focused in an emotional/drama advertising: creative and eye-catching TV advertisement with an pick drama, they spend about EYE million.
They have modified the the communication strategy due to several reasons, it may change due to cultural to use in several countries. In Africa, Adagio had spend EYE million in advertising campaigns, due to its high reputation. In this case they showed a five minute tiller and also they have helped to build an ethical value inside the business by providing communities with clean, safe water. This ethical contribution increases Guinness reputation and sales. Guinness used another type of communication method, through the website in order to attract young people.
This strategy can be very useful to them as they are losing customers due to the new trend of drinking at home. Also is a way of survival as the mature customers will eventually stop drinking the beer and the young people will be the future sales of the business, therefore its important for them to use the adequate and most appealing method of communication to grab their attention. Recommendation Guinness can be identified as being a cash cow product below the Boston Matrix, which generates high profits of margins, it occupies a high market share but it has a owe market growth.
It should continue the ‘milking strategy and invest in the product investment like the packaging of the bottles and bring the awareness to non stout consumers in order to increase the small market of stout. This will eventually make the stout business grow and so do Guinness. Guinness should maintain its adaptation approach in products and promotion in order to maintain the satisfaction of customers in different regions. It will be an useful strategy as they can face many cultural differences, political and legal constraints and they can have a better reduce performance whilst decreasing costs due to the local inputs.
That is why they need to think global and act local. Guinness should keep doing as it is doing so far but should try to make more market research in order to grow around the existing markets and see weather there could possibly be a niche in any unoccupied country. As the stout sector is so small it provide effective promotion and distribution. The continuous improvement of the product like offering a Guinness surgery also provides a higher consumer satisfaction and tries to gain advantage from the threats presented in the environment.