Diageo SWOT analysis – SWOT analysis of Diageo: Diageo is a company in the beverage industry situated in the United Kingdom and is one of the market-leading companies in the field of alcohol and spirits. The company offers around 200 brands of alcohol-based beverages including beer in over 180 countries around the globe. Some of their most popular brand names are Smirnoff Vodka, Johnnie Walker, Baileys, Guinness, Captain Morgan, Crown Royal, etc.
The company also was responsible for the creation of the biggest distillery, just behind the Chinese brewery Kweichow Moutai. The company, which was established in 1997, following the combination between Guinness as well as Grand Metropolitan, registered an annual turnover of 16 billion pounds in 2016 and employs about 33,000 people.
Diageo fun facts: The word Diageo comes from the Latin for day, dia, and the Greek word for world, geo, Diageo is the world’s leader in premium drinks with over 24,000 staff worldwide, and premises in over 80 countries.
About Diageo – SWOT analysis of Diageo
Company: Diageo plc
CEO: Ivan Menezes
Founder: Maxwell Joseph
Year founded: 17 December 1997, London, United Kingdom
Headquarters: London, United Kingdom
Annual Revenue: Pound£19.153 billion
Profit | Net income: Pound£2.799 billion
Number of employees: 27,775
Products & Services: Alcoholic beverages | Spirits | Beer | Wine
Competitors: Bacardi | Pernod Ricard | Carlsberg | Jack Daniels | Molson Coors | Brown-Forman | Constellation Brands | William Grant & Sons | Distell Group | Whyte & Mackay | Campari Group | Absolut Vodka | Heineken | Budweiser
SWOT analysis of Diageo – Diageo SWOT analysis
SWOT Analysis Of Diageo is brand-based. SWOT Analysis of Diageo evaluates the brand’s strengths, weaknesses, opportunities, and threats. Advantages and disadvantages can be attributed to internal factors while opportunities and threats can be attributed to external factors. We will be discussing Diageo’s SWOT Analysis. Below is the detailed SWOT Analysis of Diageo.
Let’s talk about Diageo’s SWOT assessment.
Strengths of Diageo – Diageo SWOT analysis
- Market leadership: In the worldwide market of alcoholic drinks is estimated at around 183 billion dollars, and the most successful company in the market is Diageo with its well-known brands in various categories of liquor and having a part of the market around 28 %.
- The top brands: Out of the top twenty spirits brands 8 are under the control of Diageo. Some of the most popular brand names comprise Smirnoff Vodka, Johnnie Walker, Baileys, Guinness, Captain Morgan, Crown Royal, and many more.
- High investment in advertising: Diageo is one of the largest advertisers in the world. It is associated with creative ads that have won lots of praise. The marketing budget for 2016 was 360 million USD.
- Long-term view: Diageo through a relatively new business is a brand that is old-fashioned, certain of them are in operation for over 350 years. The majority of the company’s decisions are based on a horizon of the long term as well as the company’s strategies focus on the creation of value that is shared.
- Geographical reach: One of the most important advantages of Diageo is its extensive geographical reach. The brand is present across more than 180 different countries, which are split into 21 geographic regions. 43% of the businesses in Diego are located in emerging economies, and this is the place where new opportunities are being created.
- Presence across all price factors: The brewer has a presence across various price points, and they sell different types of liquor such as whiskey, vodka, rum, and even beer. They offer something for all types of clients.
Weaknesses of Diageo – SWOT Analysis Of Diageo
- Insufficient presence in the world of wines: In Europe and the UK the demand for wine is much higher than for other kinds of alcohol. However, Diageo does not have popular wine brands which negatively affects its business in these regions.
- Very low penetration: Comparatively to local competitors, though Diageo is focused on emerging markets, it is losing. The developed economies of Europe and the USA stagnate in the category of alcoholics and the only chance for improvement is in the emerging economies.
- High cost: Diageo also faces many challenges when it comes to managing costs because the purchase of licenses and legal requirements along with distribution needs a lot of capital from the company.
- Brexit: Diageo was in a lot of financial difficulties due to Brexit and trade restrictions because the majority of Scotch whiskey which accounts for over 25 percent of their global business is made within the United Kingdom.
Opportunities of Diageo – Diageo SWOT analysis
- Consumer consumption: In comparison to the past when people were more likely drinks in bar and pubs, there is a shift in fashion. Many people now drink at home, especially in emerging economies where the retail consumption of alcohol is increasing.
- A growing awareness: There is an increase in awareness about different types of alcohol around the globe, and people are becoming more aware of global brands and would prefer serving popular brands of alcohol at home, or requesting particular brands when going to pubs or bars. Global corporations such as Diageo are able to benefit from this increasing awareness.
Threats of Diageo – SWOT analysis of Diageo
- Competitors: Some of the major competitors to Diageo include Sab Miller, Anheuser Busch, Carlsberg, and UB Group.
- Health issues: Customers of alcohol are concerned about the harmful effects of drinking the drink, and it is likely to impact the market for hard liquor in the future. However, in some cases, it could present a chance to purchase premium brands because consumers prefer spending money on well-known brands rather than lower-quality ones when they decide to drink alcohol.
- The regulatory framework: It is possible to find a strict regulatory framework in many nations regarding the consumption and sale of alcohol. The majority of liquor businesses have a difficult time breaking through these legal barriers, which is a problem that even Diageo had to face.
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