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s alcohol including health conscious influence the drinking behaviour of people. Economic condition will affect the sales of Diageo because during recession, the income per capita becomes low and consumers tend to source for cheaper alcohol. Substitute product in the market with the competitors pricing strategies may be a threat to Diageo since supermarket sells many other products in the same area.

 

Strategic Position

S-W (good)

 

The strategic alliance's (SA) strength over come weakness is greater when Diageo forms a SA with other suppliers, there won't be any price fluctuation for the next few year of the contract. Dieageo can save in the fluctuation cost.

 

The weakness is that when another supplier can give a cheaper price with the same quality but Diageo cannot change it's supplier neither buy raw material because it will only add to it's current raw material stock.

 

S-O (good)

 

Branding is a strength to Diagoe because it holds the highest shares in the market and have been in this alcohol industry for a very long time. The opportunity that can be used is to do more research and development to produce more healthy drink.

 

T-O (bad)

 

People are becoming more health conscious and less consumption on alcoholic drinks leads to lower sales. Though wine can overcome the health conscious thinking people, but still some people might not like wine.

 

Recommendation

Strategy 1

Diageo should probably divest the unprofitable product such as the one's seen in the BCG.

 

Beli's Scotch Whisky

Cacique Rum

Gordon's Vodka

This 3 product does not seem to be making profit. It is better that Diageo dispose this product than to keep in inventory which leads to extra cost.

 

Strategy 2

Diageo can start investing in new business. Opening own outlet to only sell Diageo's product will reduce it's dependant on the supermarkets. In this way, Diageo can do their own promotion to increase sales without depending on other distributional channels.

 

Strategy 3

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