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Distributor of Premium Alcohol Beverages - Term Paper Example

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The paper 'Distributor of Premium Alcohol Beverages' focuses on Diageo which is the world’s leading manufacturer, marketer, and distributor of premium alcoholic beverages. In the years 1997, the company was formed by a merger between two markets giant namely: Guinness plc and Grand Metropolitan plc…
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Distributor of Premium Alcohol Beverages
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Download file to see previous pages Presently the company is operating many major strategic business units (SBUs) like spirits, Beer, and Wine. Among them the most extended one is the spirit SBU because it comprises many sub-units like Scotch whiskey, Vodka, Ready to drink, Liqueurs, Whiskey, Rum, Gin and Tequila. To understand why spirit SBU is so vital for the company, its last year’s sales break up has to be undertaken.
As per the Diageo’s annual report 2007-08, the company’s is to focus on its premium drinks as these are the major source of income. In the last few years, the company’s revenue has increased marginally, but operating expense has also gone high. Thus Diageo has made a strategy to enhance its operating profit along with growth in organic sales. From the very beginning, the company has followed an aggressive acquisition strategy. At present, the company has its operation in different parts of the world, where they have strategic partnerships with many other players in this industry. When a company plans for enhancing its profitability, its main motto remains increasing the shareholders' value.
In the last year, certain changes have come in the consumption pattern in alcoholic beverages in different parts of the world, hence the company will target the growing market of alcoholic beverages in BRIC countries. Undertaking all these facts and figures, the company has planned to continue its cost-cutting strategy. Diageo will continue to operate under four business areas, it will develop its local brands and to overcome the growing pressure from governments, it will come forward and will promote the responsible drinking of alcohol, also participate in reducing the misuse of alcohol (Diageo-b, 2005).
To analyze how successful was the company’s strategy were toward spirit SBU, financial analysis of the company's financial performance was conducted. ...Download file to see next pagesRead More
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