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

DIAGEO - Essay Example 8,090. The operating profit of the company was ?2,443 million during FY2009, an increase 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 also acquired the spirits and wine business of Seagram. In 2004, the company acquired Ursus Vodka. In 2005, Chalone Wine Group was acquired. Later, the company also acquired Bushmills Irish whiskey which included Bushmills' Distillery, which is amongst the oldest licensed distillery in the world. In 2006, the company made its first 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 Pacific was created to target a new geographic location. January 2007 ma rked 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 Middle 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 fruit 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 alliance between Sean 'Diddy' Combs and Ciroc vodka. Under the terms of the deal, Combs and Sean Combs Enterprises took the lead on all brand management decis ions for Ciroc, while sharing in the future profits of the growth of the brand. In November 2007, Diageo invested ?5 million in J&B brand's package redesign to give it a more contemporary look. The new pack highlighted the brand's 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 formed a 50/50 company which owns the perpetual exclusive rights to sell market and distribute Ketel One 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, cider 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 facility at Valleyfield, Quebec, Canada. In the same month, Diageo made a capital investment of E650 million in a new brewing centre in Ireland to supp ort 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 shut down its marketing subsidiary Nightfly (Diageo - Our History, 2011). SWOT ANALYSIS OF DIAGEO Strengths Weakness Wide range of Products Continuously Declining margins Market Leader    Opportunities Threats Ever growing presence in Asia-Pacific region Litigations