DIAGEO Essay Example | Topics and Well Written Essays - 1000 words

DIAGEO - Essay Example8,090. The run profit of the company was ?2,443 million during FY2009, an annex of 3.1% over FY2008. The net profit was ?1,621 million in FY2009, an increase of 2.1% over FY2008 (Diageo - Annual Report, 2009). Diageo was created in 1997 as a result of the merger of Guinness and GrandMet (Diageo - Our History, 2011). Diageo rapidly expanded in next few years through both organic and acquisition channels. In 2001, Diageo in addition acquired the hard liquor and wine business of Seagram. In 2004, the company acquired Ursus Vodka. In 2005, Chalone Wine Group was acquired. Later, the company withal acquired Bushmills Irish whiskey which included Bushmills Distillery, which is amongst the oldest licensed distillery in the world. In 2006, the company made its archetypal acquisition in China. The company bought a 43% stake in Sichuan Chengdu Quanxing, parent of Swellfun (Diageo - Our History, 2011). In January 2007, Diageo Asia peace-loving was created to target a bare-assed geographic location. January 2007 marked the trial of new Guinness Red brand in 142 pubs in Great Britain. In February 2007, Diageo invested ?100million in expansion of its Scotch whisky operations in Scotland, in order to meet its future demand. In April 2007, as a part of brand extension, the company launched Johnnie walker Blue Label and King George V Edition in duty free channels of Europe, the Americas & the mall East. As a part of its global innovation strategy, the company made minor investment in Nuvo (brand), a new ultra-premium effervescent blend of fine French vodka, French sparkling wine, and exotic result nectar created by LLC (Diageo - Our History, 2011). In May 2007, the North American division of the company launched Smirnoff Source, a new premium malt beverage that combines pure spring water with alcohol. In Oct 2007, Diageo announced strategic league between Sean Diddy Combs and Ciroc vodka. Under the terms of the deal, Combs and Sean Combs Enterp rises took the lead on all brand management decisions for Ciroc, while share in the future profits of the growth of the brand. In November 2007, Diageo invested ?5 million in J&B brands package redesign to give it a more contemporary look. The new pack highlighted the brands role as the ultimate party whisky with a design to party goers (Diageo - Our History, 2011). Diageo acquired Rosenblum Cellars in early 2008. In February 2008, Diageo and the Nolet Family create a 50/50 company which owns the perpetual exclusive rights to sell market and distribute Ketel champion Vodka (Diageo - Our History, 2011). In March 2008, Diageo, Heineken and Namibia Breweries reached agreement to form a new joint venture for their combined beer, cyder and ready-to-drink (RTD) businesses in South Africa. In May 2008, Diageo reached an agreement to buy all the Constellation Brands distillery and bottling knack at Valleyfield, Quebec, Canada. In the same month, Diageo made a capital investment of E650 million in a new brewing centre in Ireland to support the growth and development of its global beer business (Diageo - Our History, 2011). Diageo also underwent a brief period of divestment, like that in 2003, which resulted into the selling of its Czech division, Diageo Ceska Republika, to Global Spirits. It also conclude down its marketing subsidiary Nightfly (Diageo - Our History, 2011). SWOT ANALYSIS OF DIAGEO Strengths Weakness Wide range of Products Continuously Declining margins grocery Leader Opportunities Threats Ever growing presence in Asia-Pacific region Litigations