offer higher margins than ordinary beer. Threats- UK supermarkets are to cut the number of slow-selling beer lines stocked , a move which would cut off a major distribution channel for small brands like Harp. Even though Harp has a small share of the British market, any such move by the retailers would cut out the only lager Diageo offers.- EMU will bring price transparency and could expose the practice where beers are sold and priced as ordinary beers in one country and as premium beers in another.- An increasingly health conscious society could cause a fall in beer sales.- The rapidly consolidating beer industry could make Diageo an insignificant player if it fails to make its own acquisitions or seek partnerships.- The current public opposition to GM foods may focus on GM ingredients in beer.- Microbreweries pose a threat to the major brewers- these microbreweries give people the chance to experiment with beers other than mass-market beers.Diageo- Current Strategy Global Brands- Diageo is banking on the emergence of a small number of global beer brands.- The companys focus on four Irish beer brands could prove to be a mistake- local beer brands still dominate the world market. The current strategy does not reflect the reality of the world beer market in which the top ten brewers only hold one-third of the market .- It is difficult to understand why Guinness sold Cruzcampo in Spain to Heineken, one of its main rivals. This deal has given Heineken a massive market share in Spain, and removed another potentially valuable brand from the Diageo portfolio.International Expansion- Diageos core strategy is to grow the volume of the Guinness Stout brand world-wide by attracting new consumers in developed and emerging markets . Unlike Heineken , Diageo does not acquire the brands of foreign brewers- instead, it enters license agreements with overseas breweries to produce the Guinness brands.- This method is linked to the compa...
