Diageo Plc

Diageo Plc
1. How has Diageo managed its capital structure? Do you agree it is conservative?
Diageo was born as the result of merging Grand Metropolitan plc and Guinness plc. Since the
beginning the newly formed company maintained conservative financial policies inherited from the
two parent companies; and in general from the British financial management style. There are many
indications that confirm that Diageo has managed its capital structure using a conservative approach.
Firstly, it is worth mentioning that the company has maintained levels of debt way below its
capacity to repay, maintaining the EBIT/interest ratio above optimum levels
Secondly, we can see that the credit rating of the company is A+, practically an average of what the
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2. How would you apply the Equilibrium Theory to Diageo in order to determine the firm's capital
structure policy? Would this analysis result in Diageo being a firm with high or low leverage
capacity?
Applying the equilibrium theory to Diageo we can segregate the scale into "benefits of debt" and the
"costs of debt". The analysis of each component of the theory is as follows:
Benefits of debt:
Tax savings – Based on the calculations provided in the case it can be estimated that Diageo has the
capability to borrow more debt to some extent without losing it credit rating. This additional debt (if
required) will bring additional tax savings in the future (given that Diageo will be able to maintain
positive earnings). It is also important to note that the marginal tax rate of 27% will substantially
contribute towards the savings.
Management discipline – Diageo's management has maintained a strict proportion in terms of debt
and equity thereby not borrowing capital aggressively to alleviate the value of company on pretense.
They have paid out dividends in a regular manner in the range of 35–38% of the operating profit.
Costs of debt:
Bankruptcy cost – The financial statements of Diageo indicate that they have been able to generate
steady cash flows and that revenue volatility has been low. A careful analysis of the case also
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Does Diageo Have A Mission Statement
1.Does your company have a formal mission statement? Does this statement define the business
(Mission) and contain (a) a declaration of the overall vision of the company, (b) a summing–up of
the key philosophical values that the company is committed to; and (c) the articulate of key goals
that represent the most important stakeholder claims on the company.
A mission statement sets out the company's mission, vision, values and goals. This allows the
company to know where they are going and what the public and consumers can expect from them.
Diageo' mission is 'to become one of the world's most trusted and respected companies.' To follow
through with this they intend to deliver an outstanding performance, year in and year out. Both their
business and their people will do the right thing everyday and everywhere and finally they will be
famous for 'great people, brands and holistic performances.' ... Show more content on
Helpwriting.net ...
According to their website 'Diageo's Performance Ambition is to create one of the best performing,
most trusted and respected consumer products company in the world.' They have prioritised
investment in premium core spirits and reserve. They have targeted investment in other spirits and
beer. Their progress is measured by the following financial and non–financial methods, efficient
growth, consistent value creation, credibility and trust and motivated people.
Diageo's website clearly states the company's values. They stand by these being the set behaviours
from which all Diageo personnel must follow. Diageo's company values are:
'Passionate about customers and consumers'
'Freedom to

Diageo Case Study
BUS 5112 – Marketing Management: Assignment Unit 3
Case analysis based on the article: "Thirsty for Growth, Liquor Giant Taps African Market"
Diageo, a British multinational alcoholic beverage company, established in December 1997, is the
world's leading premium drinks company which manages 'global priority brands' such as Johnnie
Walker, Smirnoff, Guinness, Captain Morgan, J&B etc. (DEO 20–F (2007)). Initially, the target
markets for Diageo were mostly the developed countries where it provided for scale efficiencies in
production, selling and marketing. The global branding strategy of Diageo for these target markets
has been 'premiumization' and dissemination of best practices in business operations in order to
serve its customers in the best possible way. The higher–end premium brands range from $35 to
$150 for a liter and as the price goes up the product becomes limited edition product which attracts
the wealthy consumers. Diageo's business enjoyed steady growth and high returns on invested
capital via business in developed economies but by 2004 many of these markets were saturated and
profits started to decline. During this period, Diageo saw an opportunity to expand itself in the
emerging markets and targeted African countries like Kenya, Nigeria and Ghana.
Diageo's global branding strategies obviously would not work with the targeted poor African market
as these people could not afford expensive big–name liquor brands but consuming illicit homemade
spirit Changa'a costing just over $2 per liter, despite the health hazards. As theorized by Johnson,
Whittington & Scholes (2011), Diageo had to come up with low priced new brands to fulfill the
specific needs of the African population and devise a new branding strategy to achieve competitive
advantage over the local merchants as well as other international companies like Pernod Ricard ,
Brown–Forman Corp. and Bacardi etc. Consequently, with an aim to develop a proper marketing
strategy as discussed by Zinkhan and Williams (2007), Diageo had to design new products,
manufacturing setups and distribution
BUS 5112 – Marketing Management: Assignment Unit 3 system to tap this lower rung of the
economic ladder. To satisfy the target market, 4Ps of the marketing

Diageo Executive Summary
Diageo's stock price increased $1.74 from $21.10 as of December 31, 2017 to $22.84 as of March
31, 2017. The increase can be primarily attributed to the company's reported growth in profit for the
first half of its 2017 fiscal year. Better than expected revenue growth, fueled by favorable exchange
rates, drove the increase in profitability. Surprisingly, the company reported that revenues increased
in each of its geographic markets. Such growth may mark the reversal of a period of relatively flat
growth for the company. Investors responded positively to the news, thus fueling the quarterly
increase in price.
Nuernberger's stock price increased 10.39 from 56.61 as of December 31, 2016 to 67.00 as of March
31, 2017. The 18% increase in stock ... Show more content on Helpwriting.net ...
The 5% increase can be primarily attributed to two factors: the company's strong financial
performance for Q4 2016 and speculation regarding the company's next moves as it remains on the
sidelines of the mergers and acquisitions wave that has been dominating industry news cycles. On
February 24, 2017, BASF reported its Q4 2016 and full year results. One highlight from the
announcement included a reported 7% increase in sales for the fourth quarter of 2016 as compared
to the fourth quarter of 2015. Additionally, the company reported an increase of 15% in EBIT as
compared to the fourth quarter 2015. As for the full year, the company reported that sales had
decreased by 18%. However, it is important to note that the company divested its gas trading and
storage business as part of an asset swap with Gazprom at the end of September 2015. The
aforementioned business unit had contributed 10.1 billion in sales in 2015. As such, the portfolio
effects noted above accounted for 15% of the decline in overall sales. Sales prices decreased, but the
company was able to consistently raise sales volumes over the course of the year. Dr. Kurt Bock,
Chairman of the Board of Executive Directors, stated that the rise in sales volumes quarter to quarter
shows that "the high investments we made in research and development and new production
capacity in recent years are paying off." Given the substantial increase in profitability and sales
volume, the Chairman expressed that the company was "cautiously optimistic for 2017." Investors
seemed to respond positively to the company's performance. On Friday, February 24, 2017, the
company's closing stock price was 87.36. By March 3, 2017, one week later, the closing stock price
had risen to 90.27. In regards to the aforementioned second factor contributing to the company's
increase in stock price, speculation regarding the company's next move

Capital structure for Diageo
Introduction and Background
Diageo was formed in 1997 through the merger of two consumer product companies Grand
Metropolitan plc and Guinness plc under the strategy of reducing costs through marketing synergies,
cutting overhead expenses and increasing production and purchasing efficiencies. The new merger
wanted to concentrate solely on the beverage alcohol business, so it sold its packaged foods
(Pillsbury) and fast food (Burger King) businesses. While the mandate for Managing for Value came
from the highest levels of Diageo, the treasury team was given the task of establishing the cost of
capital for each of the different areas the company operated. The team had to create a simulation
model which should consider new finance ... Show more content on Helpwriting.net ...
There is a point in the D/E ratio (usually high) where holders of the risky debt begin to bear part of
the firm's operating risk. This happens because as the company acquires more debt, more of that risk
is relocated from stockholders to bond holders.
The advantage of debt financing is that interests paid on such debt are tax deductible. If a company
has the intention of maintaining a permanent debt, the present value of the tax shield can be obtained
by discounting them by the expected rate of return demanded by the investors who hold the debt
(this is a perpetuity, where in reality would be the maximum possible present value for the tax
shield). This tax shield value reduces the tax bill and increases the cash payment to investors,
increasing the value of their investments.
It seems then that companies should fully leverage the company or a least come close to doing so
but there is a probability that the company enters financial distress as its leverage (D/E) increases.
Financial distress can be very costly for companies, and the cost for this scenario is shown in the
current market value of the levered firm's securities. Investors factor the potential for future distress
into their assessment of the present value (this is where PV of distress costs is subtracted from un–
levered company value and the PV of the tax–shield.) The value for the costs

Business Value Chain Analysis Of Diageo
Diageo's code for business value creation does involve their tangible assets, however other
organizations can easily buy them, so these are rarely the source of competitive advantage. The
greatest tangible source that is not easily obtainable by other companies is their own resource to
produce raw and unique materials to their own products. Diageo has competitors purchase materials
from their owned and operated distilleries and land to make their own product. Intangible assets are
difficult to measure and can't be touched or seen. These assets drive innovation and contribute to
Diageo's success and competitive edge in the market place. Above, examining Diageo's unique mix
of resources explores how Diageo develops certain resources necessary to support corporate
strategy. As we have reviewed, Diageo has a purpose, vision, mission and objective, and has
strategically implemented internal assets and has the capability and resources to deliver their
strategy. Diageo is interested in growing their people and business as well as improving financial
returns and shareholder value to avoid situations of competitive parity. These views emphasize asset
valuation using accounting and economic measures over effectiveness measures and lack a holistic
approach to understanding value as an internally driven strategic effort (Barney 2001; Hawawini et
al 2000). The RBV performed here on Diageo showcases how Diageo creates value and profits from
their internal resources and focuses

Ethicality Of The Beverage Promotion By Diageo
I am going to discuss the ethicality about one of the beverage promotion by Diageo in 2002. Diageo,
a British company which has succeeded in developing a range of premium brands, is known
throughout most of the world with the best–selling whisky brand, iconic Johnnie Walker. The
company always took unusual steps to launching their brand advertisements that deliver
consumption messages. In 2002, Diageo launched 85 advertising posters (shown in Figure 1) about
promoting Johnnie Walker in the London Underground station. The left hand side of the poster was
an opened present box with a warning label (The Victoria Advocate, 2003, January 12): "Warning.
This gift will break down on Christmas morning. Replacement parts are available from service
centre Box No. 260 ... Show more content on Helpwriting.net ...
Allow 365 working days for delivery." According to British Broadcasting Corporation, (2003), the
lawmakers in Taiwan were calling for a 1–year ban on the products of Johnnie Walker for
retaliation. Diageo claimed that the advertisement is a sales promotion and Taiwan Government is
striking its brand image. [Figure1] Diageo's advertisement in 2002
Undeniably, Diageo did not break any laws in England but it certainly can be judged as unethical.
Marketing promotion often creates conflicts of interest resulting in ethical aspect as ethics are the
moral principles that govern the decisions. According to American Marketing Association, (2014),
marketers must do no harm on ethical norms. Diageo should avoid harmful omissions. Therefore, it
should enhance consumers' confidence by asserting these ethical values: respect and citizenship.
Respect is to acknowledge basic human dignity of stakeholders. In the case, Diageo's advertisement
is an attack advertisement, which is one of the negative advertising techniques. The advertising
content was alluding the Taiwan's product and service quality are poor, which damage to self–
esteem of Taiwanese. In

Diageo Plc Financial Analysis
Introduction
The objective of this analysts report is to whether or not to invest £1 million in the company
"Diageo plc".
This report is divided into five parts. First, the company profile is introduced. Second, the
performance overview of Diageo will be summarized. Third, the financial ratios analysis is
presented. Then, I have analysed industry competitors comparing with Diageo. Final, after
considering key relevance factors, the conclusion of the investment will be revealed.
"DIAGEO" Company Profile
Diageo plc is the world's leading premium drinks business with an outstanding collection of
beverage alcohol brands across spirits, wines and beer categories. These brands include Johnnie
Walker, Guinness, Smirnoff, J&B, Baileys, ... Show more content on Helpwriting.net ...
Liquidity Ratio/Year | 2010 | 2009 | 2008 | 1. Current Ratio | 1.76 | 1.52 | 1.17 | 2. Acid or Quick
Ratio | 0.93 | 0.75 | 0.60 |
Table 3: Diageo's Liquidity Ratio 1. Current ratio, as table 3 shown, is increasing. It can be assumed
that the company overall ability to meet its financial obligations has improved (Lee, 1998). 2. Acid
or quick ratio indicates the company's ability to repay immediate commitments using cash or near–
cash (Elliot & Elliot, 2006). According to table 3, the company's quick ratio is growing.
Gearing
Ratio/Year | 2010 | 2009 | 2008 | Gearing Ratio | 182.46% | 241.75% | 187.53% |
Table 4: Diageo's gearing ratio
Gearing ratio represents the contribution of long–term lenders to the long–term capital structure of a
business (Atrill & McLaney, 2008). A company with high gearing is predominantly financed by
debt (Elliot & Elliot, 2006). We can see from table 4 that Diageo gearing ratio is rather high,
however, this ratio needs to be compared with other companies in the industry to judge the
reasonableness (http://bizcovering.com/)
Investor
Ratio/Year | 2010 | 2009 | 2008 | 1. Dividend Payout Ratio | 0.43 | 0.56 | 0.58 | 2. Dividend Cover
Ratio (times) | 2.97x | 3.10x | 3.01x | 3. Dividend Yield (ttm) | 3.5 | – | – | 4. Earning Per Share |
65.5p | 64.6p | 59.0p | 5. PE Ratio | 14.30% | 12.50% | 14.30% |
Table 5: Diageo's Investor Ratio 1. Dividend payout ratio is the proportion

Diageo Case Study
This paper dwell on a case study of Diageo's Global Branding in some part of Africa with focus on
the challenges experienced with the strategies employed and the new approach evolved with
changing the strategies, limitations experienced towards its actions.
Key words: Diageo's Global Branding, its marketing strategies, Africa penetration, mass production,
challenges and consequences.
Overview of Diageo's Global Branding in Africa
Diageo plc is a British multinational alcoholic beverage company that produces and distributes
alcoholic and non–alcoholic beverages. The company headquarter located in London, UK with a
revenue base of 15.64 Billion (GBP) and 30,400 workforce worldwide. As a custodian of the most
world iconic drinks, its brands include: Malta Guinness, Black Label, Smirnoff, Johnnie walker,
Captain Morgan, Windsor, JB, Cîroc and Baileys just to mention but a few. The world's largest
distiller of malting, brewing until it was overhauled by China's Kweichow Moutai in 2017. The
name of its chief Executive officer is Ivan Menezes and its president (Deirde Mahlan).
In Africa today, Diageo has categorized its markets into four, East Africa, Africa Region Markets,
Nigeria markets and South Africa markets with 13% net sales. Its existence in Africa paved way for
its leadership role in beverages industry with a 25.6% market share. (Forbes,2017).
by 73% agricultural materials source in Africa, most materials is locally used for its Africa markets
and over 10

Essay on Diageo Capital Structure Case
1) Overview / Introduction
Diageo was created when Grand Metropolitan, plc and Guiness, plc merged in 1997. While the
Diageo name is not well known to consumers, its brands are among the most famous including
Guinness, Smirnoff, Johnnie Walker and Cuervo. The company recently decided to focus on a
strategy to grow through its spirits, wine and beer businesses and divest of its Pillsbury and Burger
King subsidiaries. This case study will focus on the proposed capital structure decisions of Diageo.
2) Is Diageo's current capital structure appropriate to its new business? It believes that it has
traditionally had a conservative debt policy. If so, is that policy still appropriate? Has Diageo's
capital structure been as conservative ... Show more content on Helpwriting.net ...
See table below:
FY '97 PF
FY '98
FY '99
FY '00
Sales
12,985 12,029 11,795 11,970
Operating Costs 10,982 10,659 10,278 10,088
Interest Payable 268 360 324 363
EBITDA
2,003 1,370 1,517 1,882
Interest Coverage
7.5
3.8
4.7
5.2 3) Why pursue a conservative debt policy?
Having a conservative debt policy increased the credit worthiness of the firm. Because the firm
believes that the interest coverage ratio is a critical factor for credit rating agencies, they attempted
to keep this ratio very high. Also, by having a higher credit rating they are able to access short term
commercial paper borrowings at better rates. This type of short term borrowing makes up 47% of
Diageo's portfolio. By not having a strong credit rating they would not be able to lock in the low
rates which would impact their business significantly.
4) What recommendation is the firm's trade–off model for Diageo's future capital structure?

In order to maintain its credit rating, Diageo's Treasury team recommends an interest coverage of 5x
to 8x, but the simulation–based model calculated an optimal interest coverage. Figure 2 shows
minimal cost corresponding with an interest coverage of approximately 4.2. Shown in the gray bars,
the cost of taxes paid decreases as EBIT/Interest

Marketing Case Study: Diageo Branding Strategy In Africa
Case Study Diageo Branding Strategy in Africa Diageo is a global leader in beverage alcohol with
an outstanding collection of brands across spirits and beer – a business built on the principles and
foundations laid by the giants of the industry. Diageo picked Africa as a potential market using
Global Branding strategies. I am going to explain their strategies and early mistakes and their
success in this essay (Trefis Team, 2015)
4P Marketing mix Diageo product.
Product.
Diageo offers scotch whiskey, other whisk(e)y, vodka, rum, liqueur, tequila, gin, local spirits and
beer and brandy; Diageo has the market leading whisky (Johnnie Walker), Vodka (Smirnoff 1818)
and rum (Captain Morgan) brands and four out of the top ten RTD brands (Smirnoff ... Show more
content on Helpwriting.net ...
What are the social implications of Diageo's actions?
For social implication of Diageo's action, I want to capitalize SCAD officer statement.
"In our society, drinking is a big problem," said William Ntakuka, program officer for SCAD, a
Kenya–based nonprofit organization that campaigns against alcohol and drug abuse. "It's bad, and
it's getting worse" (Evans, 2015)
Diageo aggressive sales using billboard advertising of Diageo brands directly outside schools and
radio has to increase African alcohol consumption. As a matter of fact "In Nigeria, FABs are forecast
to reach 70m litres in 2020 from 11m litres in 2015" (Toesland, 2016)
Conclusion
In conclusion, Diageo had successfully adapted to African buyer behavior, but at the other hand they
aggressive approach has eminent risk cannibalize their Guinness (beer) products. Although Diageo,
Pernod Ricard and other international spirits companies operating in Africa all run responsible–
drinking programs and say their products should be consumed in moderation. We all know the risks
are high in Alcohol abuse and its negative

Diageo Plc
1. How has Diageo managed its capital structure? Do you agree it is conservative?
Diageo was born as the result of merging Grand Metropolitan plc and Guinness plc. Since the
beginning the newly formed company maintained conservative financial policies inherited from the
two parent companies; and in general from the British financial management style. There are many
indications that confirm that Diageo has managed its capital structure using a conservative approach.
Firstly, it is worth mentioning that the company has maintained levels of debt way below its
capacity to repay, maintaining the EBIT/interest ratio above optimum levels
Secondly, we can see that the credit rating of the company is A+, practically an average of what the
parent ... Show more content on Helpwriting.net ...
3. Using the data provided by the simulation model presented in the case and your personal
assessment, what capital structure would you recommend to Diageo?
According to the Equilibrium Theory, a company has reached its optimal capital structure when it
minimizes the total sum of taxes paid and the cost of financial distress. Taxes paid and the costs of
financial distress develop in opposite directions as the interest coverage ratio (EBIT/interest)
changes. While the tax shield effect and thus the amount of taxes paid at different coverage ratios
can easily be calculated using the marginal tax rate (in the case of Diageo 27%), the cost of financial
distress has to be approximated using sophisticated financial models (e.g. Monte Carlo Analysis)
that take into account probabilities of different direct and indirect costs of financial distress.
Figure 2, which summarizes the output from the model, indicates that the optimal EBIT to interest
ratio of Diageo is 4.2, because this level yields the lowest present value of taxes paid and distress
costs. Diageo currently has an EBIT to interest ratio of 5, which would be slightly too high
according to Equilibrium Theory. The company would benefit from an increased leverage level
through tax savings as pointed out in question 2. However, a lot of Diageo's firm value resides
within brands, which are intangible assets and therefore imply a higher need of

Diageo Case Study
Born in 1997, Diageo was a product of merger between Guinness and Grand Metropolitan. Guinness
and Grand Metropolitan were also products of mergers. Guinness acquired Distillers in 1986 and
Grand Metropolitan had expanded from its roots as a hotel business into spirits, Pillsbury, Burger
King and various pubs. After the merger, Diageo's new CEO, John McGrath and executive teams
had a vision to create a more focused strategy, concentrating on their core strengths, and integrate
the company fully into the global spirits organization, and sold off all non–beverage conglomerates.
The purpose of all the vicissitudes was to position the company to meet their vision of becoming the
world's leading premium Drinks Company. During the post–merger integration, Mr. McGrath
concentrated on the core competencies and the ability to build a premium consumer brand,
leveraging it on a global basis. The strategy they created was to implement company wide – the
"Diageo way of brand building". This way of working provided a guide line on conducting business
based on perceptions of its stakeholders' and customers' needs. From there, Diageo developed an
inimitable business structure in which country operations were organized leveraging its core
competencies and competitive advantages. Recently, in 2015 Diageo took another step towards
focusing on its core business and competencies, and sold off their wine business. In the alcohol
industry wine is a very competitive business, and within

Summary Of General MillsAcquisition Of Pillsbury From Diageo
General Mills' Acquisition of Pillsbury from Diageo PLC 1. How synergy might be realized through
the combination of General Mills and Pillsbury. Answer Synergy are extra benefits connected with
economies of scale after mergers or acquisitions. It's seen as the formation of a whole which is
usually more than the sum of its individual portions. Through combination of General Mills and
Pillsbury, the company gains market power since it gets sufficient power to increase its profits
though price leadership, competitive advantage, monopolistic or oligopolistic. The management
motive of acquiring Pillsbury was to increase value to the General Mills shareholders through
creating opportunities to increase on revenues and earnings by market expansion, product
differentiation and invention and efficiency achievements resultant from the merger would be extra
stable. In addition, acquiring Pillsbury has another possible financial synergy and economic
financial gains where fixed operating costs would be spread over a larger production volume,
equipment utilized efficiently, producing in higher volumes or purchasing raw materials in bulk
volumes to enjoy discounts reducing redundancy costs. According to General Mills' management
acquiring Pillsbury would 'help save on costs. The management expected to save on pre–tax
reserves of about $645 million in three years that is 2001, 2002 and 2003. Also, there would be
supply chain improvements that is through combination of activities and in procuring and logistics
they would apply best practices to enhance efficiencies in selling and distribution, marketing and
promotion and rationalisation of administration actions to generate these savings. 2. Reason for the
contingent payment to General Mills from Diageo after one year Answer Contingent liability is a
likely liability, which occurrence is dependable on the outcome of uncertain future occurrence. If the
contingency is feasible and the amount of the liability can be reasonably determined it can be
recorded. As part of an agreement between General Mills and Diageo PLC in acquisition of
Pillsbury, part of the purchase agreement included contingent liability, whereby Diageo was required
to put aside fund after one year of $642

Taking a Look at Harp Lager
1. Brand History.
Harp lager was launched in 1960. It was first brewed in the Great Northern Brewery in Dundalk.
The drink was created under the guidance of Dr. Herman Muender who fused German beer
knowledge with Irish brewing heritage. Harp which is now owned by the drinks company Diageo
fast became the most popular lager brand in Ireland. When it was launched it was marketed as a new
modern drink that would appeal to young males and females alike. It was a sister brand of Guinness
which was associated with older men in the country. Slogans used in the initial marketing campaigns
included " Have you heard the call yet" and "Brewed in Ireland – naturally" evoking a sense of pride
in the home brewed beer during the troubles in the country. It became the first mass marketed
draught lager in Ireland and the UK. Harp remained successful through the 80s and into the 90s
when some of its advertisements helped launch the careers of TV personalities such as Jonathan
Ross. However, the brand never reached the same success it had in the 70s when it held the majority
of the market share. The brand was re–launched in 1994 coinciding with the World Cup, sales rose
by 12%. However this re–launch didn't result in continued consumer loyalty and this boost soon
subsided. Last year Diageo Ireland launched a new look for Harp larger with the aim to increase the
brands relevance to larger drinkers. The new design was inspired by the Samuel Beckett bridge in
Dublin the new look was meat to be

Diageo
DIAGEO PLC. SWOT ANALYSIS.
1. Introduction
Diageo plc is a British multinational firm that owns some of the most popular alcoholic drinks in the
world. The firm boosts a reputation of not only being the largest spirits producer in the world, but
also being the world 's leading premium drinks company. The company has an extensive portfolio
and their most popular drinks include Smirnoff vodka, Baileys, Pimms, Blossom Hill and Guinness.
The company owns 312,120 Breweries, 312,130 Wineries and 312,140 Distilleries in the world and
trade in near 180 markets, and employs more than 200,000 people in about 80 countries; of which
include Great Britain, Canada, United States, Ireland, Spain, Italy, Africa, Latin America, ... Show
more content on Helpwriting.net ...
Investors do not like to see this and so inevitable just as quickly as the figures were announced, their
shares plummeted: from 14p to £10.54 (Fletcher, 2010). It's clear the company needs to sort this
issue out and develop a strategy that will enable them to make profits in all the markets they are in.
The question that needs to be asked is: Why is our strategy working in Africa and Asia but not in
Europe and North America?
In 2009 Diageo announced that it was to reduce its work force in the Glasgow and Kilmarnock
plants in Scotland by 900 workers. The company faced wide spread criticism from both the Scottish
government and trade unions for their refusal to negotiate or adopt a compromise suggested by the
Scottish government, which could have saved at least some of these workers jobs. Considering the
brand had been linked to Kilmarnock for almost two centuries and most workers had been working
in the plants for generations, the way in which they were treated by the company, was abominable.
(Maddox 2009) This event however, highlighted a weakness between the workforce and the
managers of the company which could be the source of many problems in future. If workers in other
plants, as result of the Kilmarnock/Glasgow incident assume that the company views them as
disposable labour, not only could the company land themselves a demotivated workforce; which in
turn could lead to 'shirking

Case Analysis: Cooley Distillery
Hesha Shah
STRT 4501: Cooley Distillery
03/12/2018
"Cooley Distillery: The Independent Spirit of Ireland" is a "David and Goliath" case surrounding
Cooley Distillery, which is the only independently owned Irish whiskey distiller in the world.
Located in Ireland, the company has managed to survive strong competition in the oligopolistic
category of Irish whiskey in the global spirits industry for 25 years. The non–listed public company
has remained a niche player despite gaining a staggering reputation for quality and innovation in its
offerings. One of the biggest problems faced by the company is that in all these years, Cooley
Distillery has never managed to pay any dividends to its 290 shareholders and John Teeling, the
founder and chairman ... Show more content on Helpwriting.net ...
Cooley's has some great strengths attributed to its traditional method of distilling Irish whiskey in
prime climate, which is perfectly suited to distill quality whiskey, further complimented by their
access to native materials required for this process. Cooley's competitive advantage arises from the
uniqueness of his product coupled with the fact that it was "small, independent, and Irish"
(Kennelly, 14). While these strengths have helped Cooley reach where it has today, distribution and
mass marketing are a few of the weaknesses holding the company behind as it struggled to get its
products on shelves. This can further be attributed to the vast multinational competition and few
funding outlets. Due to this limitation in funding, Teeling was in a way forced to reinvest all of
Cooley's profits back into the business. As mentioned before, this reinvestment led to no dividends
being circulated amongst its shareholders but fortunately, this also led to a loyal base that has
supported the company since its inception. Teeling believes that this patience would be rewarded
with continual growth of the company. Although the company has no form of funding for its
marketing efforts, Teeling has managed to make a few improvements and expansions in its facilities
to boost efficiency and provide extra storage in the warehouse. With the high competition in this
market, the company had to up its game. For example, providing bulk whiskey sales and private
labels in supermarkets and other stores are good ways to curb competition. But even though these
strategies might have helped the company in the past, it is important for Coolery to focus on
adopting a new strategy that would help the company grow in the long

Diageo Essay
Diageo Case
1. How has Diageo historically managed its capital structure?
Diageo sought to maintain the low–debt (conservative) financial policies of the Guinness and Grand
Met with goals to keep * its interest coverage ratio (EBITDA / Interest Payments) between 5 and 8
and * its EBITDA / Total Debt around 30–35%
Although not quite as conservative as other UK firms (with Equity/Assets ratios of 42%), it was
successful in achieving these goals and retaining a credit rating of A+ (a rough average of Guinness'
AA and Grand Met's A ratings) by re–levering the firm via * issuance of debt to repurchase and
retire shares in fiscal years 1998 and then again in 1999 * and ensuring that cost of capital was
managed down at ... Show more content on Helpwriting.net ...
The selling of Pillsbury would ensure Diageo 33% ownership of the General Mills/Pillsbury
business without active managerial involvement and the Burger King spin off allowed floating of
shares without tax penalties. In general, divesting of Diageo's non–core business allowed for
infusion of capital that allowed new internal investments and external acquisitions in businesses that
can be more easily integrated to Diageo's core competencies and can generate growth in stable, top–
line revenues that are more reflective of the industry cost of capital.
However, it should be noted that Diageo's Food and Fast Food segments had relatively stable cash
flows similar to its Alcohol segments; the food segments even exhibited higher average ROA over
time than industry samples (~19.8 to 21.0% vs. 15.4%). However, volatility is lower for the industry
sample than Diageo's food segments although that may be reflective of the much smaller sample
size for calculating Diageo's ROA.
4. Based on the results of the model, what recommendation would you make for Diegeo's future
capital structure? How might you adjust the recommendation from the model to adjust for any
missing risk factors?
In generating countless Monte Carlo scenario outputs for tax shield gains vs. cost of financial
distress, the model simulates

Diageo Capital Structure Essay
1. What do you think about the capital structure policies Diageo has pursued in the past. Do they
make sense? How does it compare to Diageo's competitors' policies? Which competitors would
make for the best comparison? (40%) Diageo was formed from the merger of Grand Metropolitan
plc and Guinness plc. Before the merge, both companies used little debt (based on the book D/E
ratio and net debt to total capital in the table below) to finance themselves which helped them gain
and maintain high credit rating (A and AA respectively). After the merge, Diageo wanted to take the
same path by maintaining the interest coverage between 5 and 8 (through actions such as new debt
issuance, share repurchase programs shown in figure 1) and having ... Show more content on
Helpwriting.net ...
* Diageo's book gearing (59%) is slightly lower than average spirits' segment figure, higher than the
average book gearing of competitors in beer and beverage industry, lower than package food and
fast food industry averages. * Diageo's market gearing (25%) is slightly lower than average spirits'
segment figure, higher than the average market gearing of competitors in beer, beverage and
package food industry averages. Given its current prospects and strategy, the appropriate credit
rating targeted by managers is an A. Exhibit 2 shows that spirits and wine is the best profitable
business and we know Diageo's plan to focus on this business. Let's compare it with Allied Domecq,
one of its major rivals in the alcoholic beverage industry. Allied Domecq has a way higher book
gearing and a slightly higher market gearing. However, it has a credit rating of A–. With its positive
and increasing net income, this could mean that Diageo may take up more debt (probably up to its
competitor ratio level) without having to fear about a potential downgrade.
2. Why is Diageo selling Pillsbury and spinning off Burger King? How might value be created
through these transactions? (20%)
Exhibit 2 shows that Pillsbury represents 24% of Diageo's operating profit in FY00 while Burger
King represents 10%. Spirits and wine is the biggest division (high operating margin) of the firm
and also the fastest growing with sales growth of 8% for the year. Guinness was

Case Study Of Diageo Global Branding Strategies
Introduction
The purpose of this case study is to analyze the article: "Thirsty for Growth, Liquor Giant Taps
African Market". In performing this analysis, the following four questions will be answered: Why
haven't Diageo's global branding strategies worked in Africa; what has the company done to change
its marketing strategies; are there risks to the Diageo brands to the new approach; and what are the
social implications of Diageo's actions?
Failure of Diageo Global Branding Strategies Diageo experienced several failures in the African
market. One of these failures was misunderstanding the demand of its local consumers in the
African market Specifically, when Diageo decided to cut costs by adding a product to the market
that was ... Show more content on Helpwriting.net ...
Risks of New Diageo Marketing Strategies Risks can be both positive and negative. According to
Go Skills (2016), a positive risk can be described as opportunities to improve a company's ability to
achieve the goals and objectives. One positive risk that Diageo faces is resultant of the company's
change of product concentration is a continued increase in revenue sales of the low–cost spirits in
the continent of Africa; specifically the slums of the region. As mentioned above, risks can yield
results both positive and negative. Negative risks are simply defined as unwanted threats that have a
negative impact on the goals and objectives of a company (PM Study Circle, 2017). A negative risk
of Diageo's decision to change product focus to inexpensive liquor sales can be costly. While this
marketing strategy is based on present supply and demand, it fails to take into account future market
changes. Diageo should be cautious and not concentrate all of its marketing efforts and resources in
one region as the company could lose revenue sales.
Social Implications of New Diageo Marketing Strategies The changes in marketing strategies made
by Diageo establish implications to the social environment. According to Evans (2015),
approximately 50% of males in region do not drink alcohol. That said, this fact is overshadowed by
the reality that of the other 50% of African males

The International Marketing Activities of Burberry and Diageo
Compare and contrast the international marketing activities of
Burberry and Diageo.
Burberry is a distinctive luxury brand with international recognition and broad appeal. The company
designs, sources, manufactures and distributes high–quality apparel and accessories. Founded in
Basingstoke, England, in 1856, Burberry has a unique heritage associated with Great Britain and
positions itself as the authentic
British lifestyle brand.
Since the arrival of a new management team commencing in 1997, it has been repositioning the
Burberry brand in line with its luxury heritage. The brand was positioned to broaden its appeal to
new customers whilst aiming to retain its traditional clientele, building on widely recognised icons,
such ... Show more content on Helpwriting.net ...
From the Burberry Prorsum range down to the accessories, Burberry has ensured three important
dimensions in its product model.
Manufacturing and Sourcing:
Integral to the repositioning of Burberry in the late 1990's was the company's determination to
ensure that is maintained full control over the development, sourcing and manufacturing of the
various collections. Product manufacturing is secured by a mix of internal and external
manufacturing facilities based in the England, Wales and the USA, producing clothing fot the
Burberry London range such as rain jackets and polo shits. Products made for the Burberry Prorsum
range are supplied principally by Moroccan manufactures. Burberry has outsourced the quality
control management of the Thomas Burberry collection to a third party specialist.
Distribution Channels:
The Burberry retail chain is comprised of four distinct formats.
Located within the primary shopping locations in Burberry's most important national markets,
flagship stores located in London,
Barcelona, New York and Tokyo. These stores sell the whole Burberry range serving as a showcase
to the fashion media. Other smaller stores
(approx 300) based in smaller cities sale primarily the Burberry
London range for the average customer.

Marketing Communications:
There are three core stands to the Burberry communication model;
Advertising, Fashion shows and

Diageo Case Study
I. Executive Summary
Diageo, one of the world's leading consumer goods companies, was formed from the merger of
GrandMet and Guinness. In 2000, the company announced its intention to sell its packaged food
subsidiary, Pillsbury, and 20% of its Burger King subsidiary. Because of the restructuring
opportunity, the company wanted to rethink its financing mix.
In this case, the tradeoff between the costs and benefits of different leverage policies will be
discussed. A simulation model was created by Diageo's director of Finance and Capital Markets, Ian
Simpson, and Adrian Williams, the firm's Treasury Research Manager, to understand the tax benefits
of higher gearing and the cost of financial distress.
In this report, I will discuss the ... Show more content on Helpwriting.net ...
Low debt could help Diageo get considerable benefits. They can rise financing more readily, and
pay lower promised yields. They can access short term commercial paper borrowings at more
attractive rates. However, if the debt ratio is relative high, the company has to face various costs,
such as direct and indirect cost of financial distress.
However, because the interest of debt could shield part of earnings from taxes and strengthen
management's incentive to increase sales. Some financial analysts hold the view that companies
should take appropriate debt. The tax expense could be decreased along with the increase of debt.
When we put the two curves together, we can get the relationship between the debt ratio and the
total cost of financial distress and tax expenses. We can see there is a optimal leverage point at
which the total cost is the lowest.
There are many similar theories about the optimal leverage point. Calculation of the firm value and
cost of capital can also get the same conclusion.
According to the Equilibrium Theory, at the optimal leverage point the PV of tax expense should be
equal to the financial distress costs. Simpson and Williams' simulation model helped us to find the
point, at which point the EBIT/Interest was equal to 2.8. However, financial model does not stand
for the real world. The interest coverage of 2.8 is not suitable for Diageo, because there are many
defects in the simulation model.
iii. Is Simpson and

Diageo Case Study
Solution Abstracts This essay focuses on the success of Diageo in breaking the barriers of its
confinements in the ''liquor world''to make it all the way to the African continent after having some
setbacks that resulted in loss of sales in its intial foray into the low end of the market all because of
his adoption of global branding strategies for the new African Market.The paper researches into why
Diageo's spirits waited a bit of a time before eventually incorporating new market ing strategies to
appeal to local customers in Ghana,Uganda,Nigeria and Kenya.A bit is also dwelled on his mass
production and its social consequences which leads to episodic drinking. Key Words: Episodic
drinking Liquor world Spirits Marketing strategies Mass ... Show more content on Helpwriting.net
...
IV. The use of adverts in the vernacular language on most Kenyan radio stations also was a laudable
strategy to get to the masses about the existence of Diageo brand.The advert in a single language or
dialect could reach about a whole town. V. Motor bikes were preferred to trucks as many of these
shack out or slums could not be accessible by heavy or big trucks,so motor bikes became an
option.The idea was that these bikes could penetrate all the ''nooks and crannies'' VI. In Ghana
Where bitters is preferred among drinkers,the introduction of Orijin bitters found its place among
drinkers in that country. ''As the name implies, ORIJIN is made by us and for us. Orijin; an

The Fast Food Industry Is A Multi Billion Dollar Industry
` The fast–food industry is a multi–billion dollar industry that has generated about 200 billion U.S.
dollars just in 2013 alone. This industry employs approximately four million people across the
country with 83% of U.S. consumers dining at fast–food restaurants at least once a week. The word
"fast–food" made its addition to the Merriam–Webster dictionary during the early 1950's. The fast–
food industry's (also known as Quick Service Restaurants) modern system of fast–food franchising
is said to have begun in the 1930's. These franchises focus on executing high–volume, low–cost, and
high–speed products. Many American fast–food companies are franchised in over 100 countries in
today's society. There are numerous different types of fast–food restaurants like on–premises
restaurants; drive–thrus; take–out; and cafeterias/buffets. Due to the nature of the service, the food
tends to be preheated and/or precooked in–order to keep up with the busy lives of today's modern
nomadic community. All the food is standardized and shipped from a central distribution hub.
Within the last decade, there has been an increased demand for better quality of food from fast–food
restaurants. Usually the food is highly processed with high fat content that is mass–produced to all
franchises. This has been a huge issue for fast–food companies to get a handle on because of the
national initiative to control obesity in America. In response to the health movement across the U.S.,
fast–food companies

The Marketing Strategy Of Desnoes And Geddes
Marketing communications are intended to both inform and persuade a target audience, with a view
to influence the behaviour of that group. The behaviour of interest to organizations can range from
encouraging owners to adopt improved practices or to produce a particular product or service. As
has been said on other occasions, each element of the marketing mix must be designed so as to
further the overall marketing strategy, and this includes marketing communications.
Desnoes and Geddes Limited (D&G) produces one of Jamaica's best–known exports, Red Stripe
beer. They are proud of the fact that Red Stripe is Jamaica's coolest beer. It also brews other
beverages for the local market such as Red Stripe Light, Dragon Stout, Malta, Smirnoff Ice,
Guinness, and Heineken brand names. Only a small portion of D&G's shares are publicly traded.
British beverage group Diageo PLC is the ultimate parent company. It has a 58 percent holding in
D&G through Udiam Holdings AB of Sweden.
The past financial year has been challenging for Desnoes and Geddes. The company faces many
challenges, not the least of which includes market forces, significant increases in manufacturing
input costs, such as malt and mounting energy costs, have forced them to raise ... Show more
It is also generally short–lived; one off incentives intended to provide consumers with that last push
to buy. This is the last traditional component of the marketing communication mix that is discussed
as part of the marketing communication process. Sales promotion simply refers to purchase
incentives that you provide your customer with. These can assume a number of forms including
offering free goods or services, coupons and vouchers, gifts and prizes, discounts, money–off,
competitions, samples, financial incentives, charitable promotions and any other value–add over and
above your standard product or

Diageo Marketing Strategy
Diageo's Marketing Strategy
Diageo is the world's leading premium drinks company. It has more category leading brands than
any other drinks company and market leadership in many of the major growth markets around the
world. Diageo's unique STP strategy has allowed it develop into a globally renowned brand with an
operating profit of over £2 billion in 2005. With its headquarters in London, Diageo has experienced
rapid expansion with over 80 offices worldwide employing around 20,000 workers. The firm's
recent success can be largely attributed to its efficient market segmentation and product
diversification that have allowed it to meet the specific demands of its global consumer base.
The Alcoholic Beverage industry is one of the largest ... Show more content on Helpwriting.net ...
Other Political factors involve the tight regulations many countries place on mergers and
acquisitions and monopolistic behaviour. In the last 10 years the alcohol industry has seen an
unprecedented consolidation as the largest firms try to identify the most profitable segments of the
fastest growing and most profitable new markets. This often leads to infringements with national
regulations about competition and market monopoly, resulting in the sale having to be approved by a
government agency.
When looking at the economic aspects affecting the industry and Diageo the main concern is the
market saturation reached in many of the developed economies worldwide. With demand remaining
constant and competition increasing it is important for firms to identify new markets to invest in,
with particular focus placed on Emerging markets. Another important development is the growth
patterns in the alcoholic beverage market with the demand for beer increasing by 2.7% with
particularly strong growth in the premium brands market. In contrast there has been a decline in
demand for wine and spirits which are the industries that Diageo has a large market share. There has
also been a recent reduction in operating profit of Diageo in Europe, which can largely be explained
by the higher taxes imposed by governments who are striving to reduce alcohol consumption.
To me the most important social factor

Strategic Financial Analysis
Diageo Whiskey Company Analysis Introduction Diageo holds a title of being the globe's largest
producer of whisky, connected to some 29 distilleries and warehouses storing seven million casks of
maturing spirits. Their products are sold in more than 180 countries and the company holds offices
in 80 countries. Diageo's best–selling brand (Johnnie Walker) has been sold in the fiscal year of
2011 in an astonishing amount of 17.8 million "nine–liter cases", which were mainly traded
overseas. The demand for whisky globally is rising since the 1990s at that time the market was
deemed "flat", while according to the Scotch whisky association exports of scotch were valued at £3
billion in the first nine months of the year 2011, which is a ... Show more content on Helpwriting.net
...
Diageo's fair value is based on the P/E multiple, the method used is done with knowledge that the
bases of the processes do not hold stable ground, this is attributable to factual inability of meeting
the underlying requirement of the model – having very similar companies, for adequate comparison.
3) Discounted Cash flow (DCF) Discounted cash flow is a method that allows predicting an
estimated projection of what might a stock's value be in the present therefore show the attractiveness
of an investment, this is done through the use of previous data relating a matter and computing
details at hand into a formulae which give estimated projections . There are numerous distinctions as
to what DCF could be used for, primarily it is used for deriving estimates of what you could get
from a possible investment with consideration of time and money. DCF is a great tool at an entity's
disposal, yet it still holds a number of fault – the smallest change of computed date could result in
complete inadequacy in the result. Discounted Cash Flow (DCF) Formulae: # In case of Diageo, we
don't really have data to be sure about the company's Cash Flows in years to come, but we can still
use this method after making several important assumptions. Assumption 1. Cash Flow for period 0
is taken as the Cash Flow reported on the financial web–site for year 2010. Expected CF in 2011 =
3,405,000,000 Assumption 2. We expect Cash Flows to grow into infinity at a

East African Breweries : Company Profile Essay
EAST AFRICAN BREWERIES Table of Contents
Company profile 3
Concept of strategy 4
History of EABL 5
Geographic scope 5
Product scope 6
Sources of competitive advantage 6
Recent changes in EABL 9
Diversification strategy 10
Performance track records 12
Challenges facing EABL 14
Company profile
East African Breweries Limited (EABL) is East Africa 's leading branded alcohol beverage business
with an outstanding collection of brands that range from beer, spirits and adult non–alcoholic drinks.
The company's ambition is "to create the best performing, most trusted and respected consumer
products company in Africa". Its vision is "To be the most celebrated business in every market in
Eastern Africa". Core values guiding the company include passion about consumers, value of each
other, taking pride in what they do freedom to succeed and striving to be the best. Consumer insights
drive the growth of the company and they therefore maximize on this aspect. EABL 's core brands
include, among others, Tusker, Pilsner, Bell Lager, Guinness, Malta Guinness, Alvaro, Uganda
Waragi, Senator, Johnnie Walker and Smirnoff Ice. The Company's wholly owned subsidiaries
include Salopia Limited, Allsopps (EA) Sales Limited, East African Breweries (Mauritius) Limited,
Central Glass Industries Limited, International Distillers Uganda Limited, East Africa Maltings
Limited, East African Maltings (Uganda) Limited, EABL Tanzania Limited and EABL International
Limited. The Company exports its products

Diageo Competitors
Diageo has plans to launch another new flavour for its CIROC range of premium vodka – CIROC
Lime (Marketing week, 2015),The Ciroc brand is aimed at young 25 –30 year old professionals who
like to go out to night clubs on a Friday night, after a hard week at work. In London, the British
child psychologist Laverne Antrobus think,People always quickly ended the childhood,It has been
requested must be immediately reached many key milestones, but this "instantaneous growth"
concept has been inconsistent with the trend of the times;Laverne Antrobus said, "Now is the turn of
adults 18 years and said the time had unrealistic ... As far as I know the point of view of young
people.They came to the age of 18 still need a lot of help and support. "(Picture ... Show more
Or directly hold a party, which is the theme of the young urban workers and the use of new products
as the party drinks sponsor. All advertising needs to show consumers that this is a most suitable for
office workers on vodka, and subtly enhance brand

Case Analysis Of Smirnoff Vodka
Vodka remains the biggest globally exchanged soul and Russia is still the biggest business sector
notwithstanding the decrease there in the category. The US and Russia represent the lion's share of
the premium–and–above market: The US only us has a 74% offer (18.9m cases), while Russia has a
11.5% offer (2.9m cases), took after by Brazil with a 2.3% offer (601,250 cases). An alternate key
pattern is the proceeded with development in seasoned vodka. Actually, while unbiased vodka was
basically level in 2012, volumes of enhanced vodka climbed by 5.7% to 23.2m cases. Flavors
included 4.7% of the worldwide vodka advertise in 2012, up from 3.4% in 2008, report expressed.
The US market represents 60% of the aggregate enhanced vodka business, took after via Poland
with 15.4% and India with 5%.
The accompanying offers an expansive representation of a few markets of premium: additional data
and exchange information is accessible on application.
Smirnoff ... Show more content on Helpwriting.net ...
Chief opponent Absolut may have the edge the extent that pattern setting is concerned, however
Smirnoff has measure on its side. It is sold in more than 130 nations around the world, with a
general lead improved by the way that, for very nearly 30 years after the Second World War, it was
for all intents and purposes the main vodka accessible for buy outside socialist Russia. All the more
as of late the brand has delighted in extensive accomplishment with prepared to–drink twist off
Smirnoff Ice. In America this purported "malternativealternative" doesn't even contain vodka,
permitting it to contend no holds barred with the neighborhood brew

Diageo Plc
DIAGEO PLC 1. What do you think about the capital structure policies Diageo has pursued in the
past. Do they make sense? How does it compare to Diageo's competitors' policies? Which
competitors would make for the best comparison? 2. Why is Diageo selling Pillsbury and spinning
off Burger King? How might value be created through these transactions? 3. Based on the results of
the simulation model, what recommendations would you make for Diageo's capital structure? Does
the model capture all of the important risk factors faced by Diageo? Would you want to adjust the
model I any way? Up until 2000 capital structure policy at Diageo was conservative, maintaining
quite a high the [book] equity–to–assets ratio inherited from its predecessors: ... Show more content
on Helpwriting.net ...
Diageo's mixture of the short– and the long–term debt and the currencies can be a subject for
concern: having 47% of the debt was raised via short–term commercial papers and thus exposing the
company to the refinancing risk in case of the adverse changes in the interest rates. Currencies'
mixture of debt was also quite concerning: with the ca. 50% of operating profits generated by the
North American geography of the Diageo's markets company had ca. 67% of the dollar–
denominated debt. Coupled with the relatively large portion of the short–term debt within its capital
structure this exposed Diageo to the risk of the strengthening US Dollar and correlated growth of
interest rates. Overall, we can conclude that the capital structure policy (in terms of gearing and
interest covering) was in line with the policies adopted by the Diageo's reference group and helped
to maintain the borrower's Investment Grade status, but the composition of the debt maturities and
currencies wasn't really prudent By divesting its non–core businesses Diageo could focus on its core
activity deploying its assets in related industries (Alcohol and Beer) with the synergetic effect of
using the same distribution channels. Amount of proceeds from the proposed divestitures

Communication Methods At Diageo Communication Portfolio
Diageo Communication portfolio
Author:
Durham University
Communication Portfolio
Instructor:
11 January 2015
Table of Contents
Company Overview 4
Communication Methods at Diageo 4
Recommended Communication Techniques 6
Appraisal 8
Creative Element 11
References 13
Introduction Due to stiff competition, marketing has become an essential component in the
management of organizations. According to Turnbull and Paliwoda (2012) marketing revolves
around the manner in which organisations communicate with consumers in the market. There are
two main perspectives towards the understanding of what marketing is. From one perspective, it is
the manner in which organisations communicate with their consumers regarding the existing
products and also commication that is geared towards creating positive perceptions in the consumer
market. Thus the approach points out that marketing is a tool used for value creation. The other
perspective of marketing is more comprehensive as it encompases marketing as a tool and a process
in the organization. with regards to this perspective, Challagalla, Murtha, and Jaworski (2014)
define marketing as: "the process of conception planning and execution, pricing, promotion and
distribution of goods, ideas and services." This means that marketing starts from the designing and
producing products and services, to when they are promoted and distributed to the consumers.
Marketing strategies of enhancing sales can be implemented anywhere within the

Burger King Case Study
The predecessor to Burger King was founded in 1953 in Jacksonville, Florida, as Insta–Burger King.
After visiting the McDonald brothers' original store location in San Bernardino, California, the
founders and owners (Keith J. Kramer and his wife's uncle Matthew Burns), who had purchased the
rights to two pieces of equipment called "Insta–machines", opened their first restaurants. Their
production model was based on one of the machines they had acquired, an oven called the "Insta–
Broiler". This strategy proved to be so successful that they later required all of their franchises to use
the device. After the company faltered in 1959, it was purchased by its Miami, Florida, franchisees,
James McLamore and David R. Edgerton. They initiated a corporate restructuring of the chain, first
renaming the company Burger King. They ran the company as an independent entity for eight years
(eventually expanding to over 250 locations in the United States), before selling it to the Pillsbury
Company in 1967.
Pillsbury's management tried several times to restructure Burger King during the late 1970s and the
early 1980s. The most prominent change came in 1978 when Burger King hired McDonald's
executive Donald N. Smith to help revamp the company. In a plan called "Operation Phoenix",
Smith restructured corporate business practices at all levels of the company. Changes included
updated franchise agreements, a broader menu and new standardized restaurant designs. Smith left
Burger King for

ÔøºÔøºÔøºÔøºGeneral ¬†Mills‚Äô ¬† Acquisition of Pillsbury...
General Mills' Acquisition of Pillsbury from Diageo PLC
Lauren Sherlock Jason Park
JP Zendman
12/9/2009

General Mills' Acquisition of Pillsbury from Diageo PLC Situation Analysis:
In December 2000, management at General Mills (GM) proposed a plan to acquire Pillsbury, a
baked– goods producer, in a stock–for–stock exchange. Pillsbury is currently controlled by Diageo
PLC, one of the world's leading consumer–goods companies. The deal specifies that General Mills
is to create and thus issue additional shares of common stock to Diageo in exchange for complete
ownership of the Pillsbury subsidiary. If the deal is executed, Diageo will become General Mills'
largest shareholder. The consideration to Diageo ... Show more content on Helpwriting.net ...
In recent years, its beer and liquor businesses have been strong performers, yet its Pillsbury and
Burger King divisions have been a drag on earnings. Thus, a deal with General Mills will allow
Diageo to divest some of its unprofitable food assets and will also enable Diageo to focus more
heavily on its thriving alcohol business.
The Transaction:
As mentioned above, the transaction between Pillsbury and General Mills will involve a stock–for–
stock exchange that would pay Diageo over $10 billion; 141 million shares of common stock in
addition to the assumption of $5.142 billion in debt. This debt figure includes Pillsbury's existing
debt of $142 million, along with $5 billion in new borrowings that will be distributed to Diageo in
the form of a special dividend before the deal is closed. After the transaction is completed, Diageo
will own 33% of General Mills' outstanding shares. If approved, the merge would result in Pillsbury
operating as a wholly–owned subsidiary of General Mills. This essentially means that Pillsbury is
completely controlled by GM, as GM would own 100% of Pillsbury's stock. If the transaction is
executed, all of Pillsbury's equity ownership will be held by General Mills. Diageo is primarily
divesting its holding in Pillsbury in exchange for a substantial holding in General Mills.
The transaction also includes a rare contingency payment,

Diageo Case Report
Diageo Case Report
Scott Johnsson
BMGT495
March 11, 2008
Strategic Issues In 2001, the conglomeration known as Diageo PLC became the world's largest
spirits and wine holding company in the world. This was the outcome of an intense acquisition of
Seagram Company's beverage assets for $8.15 billion. The resulting conglomerate faced
complicated strategic issues concerning how it wished to move forward in its beer, wine, and spirits
divisions. The subject of their inquiries focused mostly on marketing and acquisition decisions. The
addition of Seagram's upscale wine and spirits brands into Diageo's portfolio caused the corporate–
level management to rethink their global marketing strategy. The newly created Diageo Chateau &
Estate ... Show more content on Helpwriting.net ...
Other innovations within psychology have discovered that the higher price of wine has a distinctly
positive effect on a consumer's enjoyment of that product. The understanding of cultural changes is
essentially transforming the general environment. The demand for wine has been consistently in
favor of premium wines, while "jug" wines have been lagging. Drinkers of wine are finding it much
more affordable than in the past, but are also increasingly affluent themselves. Also, foreign wines
are becoming more popular in native countries than ever before. The consumption of wine has
moved to 'off–premises' locales as a result of 9/11 and its effect on the restaurant business. [Exhibit
2] Within the wine–producing industry, competition can be stifling. The competitors create an
intense industry rivalry for profits. There are more producers of wine than any other beverage
product so profit margins are generally less than beer or spirits. Many factors contribute to the
intense competition between wine–producers. The end consumers of wine have many product
options available to them along and a vast array of available substitutes, including beers and spirits.
The product differentiation between producers cannot be easily interpreted by most purchasers,
which leads to premium wines having lower revenues. New firms entering the industry have
considerable

Diageo Case Study
Written Assignment unit 3
Thirsty for Growth, Liquor Giant Taps African Market
University of the People
1. Why haven't Diageo's global branding strategies worked in Africa? Because Diageo applied a
high quality brand which was not affordable by the majority of the customers in Africa "It's actually
more about keeping a brand locally relevant and keeping the costs down. That's something we're not
used to." (Evans, (2015, July 30), para.19) Also, Diageo applied its products due to its view in its
main market forgetting that it approached a new markets targeted new customers. "but now faces
pressure from Pernod Ricard, which opened a Nairobi office in 2012. Massive billboards for
Pernod's Jameson Irish Whiskey and Diageo's Johnnie Walker Scotch dot the city's skyline, while
salesmen compete to get their brands into the hundreds of new bars and stores that open each year. "
(Evans, (2015, Jul30), para.16) Furthermore, that caused Diageo overload of facing and challenging
other competitors "Diageo thought it could apply global marketing techniques to its African spirits
brands. "We've been guilty in the past of coming at it from a Diageo perspective of premiumization
and total focus on the brand," (Evans, (2015, July 30), para.19) In somehow Diageo challenged
itself in the African market because of owning other beer brands that were existed in the African
market as well. So, that created a self–challenge and inner competition besides the competition of

Marketing Strategy Of Diageo
Diageo's key ambition is to build one of the leading performing, most trusted and respected
consumer products companies worldwide, which is currently been met due to mergers and
acquisition. Diageo's main strategy is to drive top line growth and margin expansion in a sustainable
and responsible way and to bring reliable value creation for its shareholders in the long term. Diageo
will use its broad brand range to do this. They are category depth and geographic reach to deliver on
consumer needs. Key to achieving its strategy is the expertise of its people who share the same
values. Diageo has a wide range of chief brands across categories and price points. It possesses six
of the world's top 20 spirit brands by retail sales, including Johnnie Walker and Smirnoff, the
number one premium spirit brand by volume, making Diageo the leading first–class spirits industry
in the world by volume, net sales and operating profit. In beer, Diageo owns one of the beyond
doubt global ... Show more content on Helpwriting.net ...
The acquisitions of Mey İçki (Turkey), Ypióca (Brazil), the Serengeti and Meta breweries (Africa),
its major shareholding in Shuijingfang (China), its investment in Halico (Vietnam), and its chief
shareholding in United Spirits Limited (India), each display this strategy in action.
Diageo believes that they are the leading industry in marketing; they combine expertise and creative
alliances to engage consumers by traditional and digital media channels. This knowledge and
alliances, added with the benefits of global scale and consumer insights, they bring world class
marketing campaigns that focus on the variety of price points from luxury to more reasonably priced
brands. Marketing spend is focused on the strategic brands and the new high growth

DOW CHEMICALS
9 – 2 0 1– 0 3 3
REV. AUGUST 6, 2003
GEORGE CHACKO
PETER TUFANO
Diageo plc
Ian Cray, Diageo plc's Treasurer, looked out of his office window onto the busy streets of London in
October 2000. The London–based consumer goods company Diageo had recently announced its
intention to sell its packaged food subsidiary, Pillsbury, to General Mills. Earlier in the year, Diageo
also announced its intent to sell 20% of its Burger King subsidiary through an initial public offering
during
2001, to be followed by a spin–off of the remainder of Burger King after December 2002. If these
transactions took place, the firm would be focused exclusively on the beverage alcohol industry. As
Diageo's business was restructured, it was an opportune ... Show more content on Helpwriting.net ...
The firm was organized along four business segments. The largest was the Spirits and Wine
business, which produced and marketed a portfolio of beverage alcohol such as scotch, vodka, gin,
and tequila. Diageo's brands included Johnnie Walker, Smirnoff, J&B, Bailey's, Gordon's,
Tanqueray,
Cuervo, and Malibu. This division was not only the biggest (with revenues of £5 billion and the
leading market share in the U.S. and U.K. markets) but also the fastest growing of Diageo's
businesses, with sales growth of 8% for the year. More than 70% of sales and sales growth came
from the Europe and North
America markets. This segment enjoyed the largest profit margins of all of the segments, with 15%
operating margins and growth in total operating profits of 15%. The high levels of operating profits
reflected Diageo's strategy of concentrating on premium brands and pricing. (Exhibits 1 and 2
contain historical financial information for Diageo and its business segments.)
Diageo's second largest division was Guinness Brewing, which produced and sold beer to markets
around the world. This segment, while substantially smaller in sales than the Spirits and Wine
Division, was a close second to it in terms of operating profit growth rate. Due to the similarity in
the products and distribution channels for these two businesses, Diageo was

Diageo Essay
Diageo's Performance Ambition is to create one of the best performing, most trusted and respected
consumer products companies in the world which is currently been met due to mergers and
acquisition. Diageo's strategy is to drive top line growth and margin expansion in a sustainable and
responsible way and to deliver consistent value creation for its shareholders over the long term. To
do this Diageo will use its broad brand range, category depth and geographic reach to deliver on
consumer needs. Key to achieving its strategy is the expertise of its people who share the same
values. Diageo has a broad range of leading brands across categories and price points. It owns six of
the world's top 20 spirit brands by retail sales, including Johnnie Walker which is the number one
spirit brand by value and Smirnoff, the number one premium spirit brand by ... Show more content
on Helpwriting.net ...
Recent launches have focused on the consumers' desire for luxury, the tastes and increasing
affluence of the emerging middle class consumer and increasing the accessibility of spirits through
flavour extensions and new packaging and drink formats. Diageo has strong routes to market which
leverage local expertise. Diageo owns and controls the route to market in many countries, and in
others the route to market is through joint ventures, associates and third party distributors. The
recent acquisitions in the new high growth markets have helped to enhance Diageo's routes to
market with the addition of the leading spirits company in Turkey, Mey İçk, Meta Abo, Ypióca; and
with investments in a premium local spirit company in China, Shuijingfang, the leading branded
spirit company in Vietnam, Halico and the leading beverage alcohol producer in

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