SWOT Analysis of Diageo Company
SWOT analysis of Diageo company which has been operating in beverage industry since 1997. It’s the world largest producer of Spirit, beer and wine.
• A highly recognized brand which has a market presence in 180 countries.
• Strong sales and distribution network
• Diageo provides a positive working environment for its employees.
• Diageo has a broad geographical coverage that can help to prevent from economic uncertainty in any one part of the region.
• Diageo has a huge wine portfolio which shows how the company has insulated its market from unfavorable fluctuations in the consumer’s preference through reasonably priced labels. Also; it can offer a highly priced wine for inspirational consumers per requirement.
• Diageo is the world’s largest whiskey producer with almost 30 malt distilleries and two grain distilleries.
• Strong brand positioning has developed through global associations and tie ups.
• Acquisition with the Chalone Wine Group in 2005 have extended Diageo’s portfolio by adding premium Californian wines which further increased the company’s sales in the wine industry.
• Limited market share due to tough competition in the global market.
• Diageo has got insufficient market resources in the wine’s portfolio of the brand comparatively to its spirit business.
• The company has lost its global brand image specifically in the emerging markets.
• Diageo needs to further extend its wine business through acquisitions and joint ventures with other major companies.
• The company’s portfolio still remains incomplete without any ownership in the Australian market which reflects lack of commitment of the company in the wine business.
• A strong growth in red and white wine in the US market can boost the company’s sale in the overseas market.
• There is a huge growth potential in the Norway and Ireland wine business. Although the sales in these countries are at a growth stage, but couldn’t reach to the level of other European countries. Due to its strong market presence in the European market, Diageo can look forward to exploit these markets in the future.
• As the recent studies indicated that red wine can have a beneficial health impact for the moderate drinkers, this can further increase red wine sales.
• Diageo can launch its successful brands in the new emerging markets.
• Acquisitions and joint ventures with successful local players in order to make a strong presence in the newer territories.
• Strong competition with other local and global brands. An Increase competition from small and artisan wineries throughout California can have an adverse effect on Diageo’s Californian wines.
• Laws and regulation can threaten the establishment and advertisement of the wine business.
• Decreasing sales of spirits brand can lead to an international price war which could force down the company’s profits.
• Since there is now a huge emphasis on anti drink /driving campaigns in some part of the established wine drinking countries like Spain, which is a key market for Diageo.