Table of Contents
This document offers a concise overview of the main points. It provides a summary of the key points discussed.
An opening statement
Talking
Original: Negotiate
Paraphrased: Bargain
PEST Examination
Porter’s Five Forces is an analysis of the competitive environment that evaluates the five elements that influence the profitability of an industry.
In conclusion
Talking
Original: The teacher asked us to discuss the topic
Paraphrased: The instructor requested we converse about the subject.
Assessing the competition
In closing
The following document provides a concise overview of the main points of discussion.
The paper is divided into 2 parts. Part one deals with strategy, and part two with marketing. Adnams’ strategic positioning can be determined using tools such SWOT and Porter’s Five Forces Analysis. SWOT analyses identify internal strengths, weaknesses, and opportunities to be exploited to capitalize on external opportunities. Porter’s Five Forces analyses the company’s competitive environment. Porter’s study examines barriers to entry, power of the buyers and suppliers, as well as competition. In the paper, Adnams discussed how it could use these forces to gain a competitive edge.
Adnams is evaluated in part two of the paper. Adnams’s business environment has been described and analysed with the PESTLE method in this assessment. PESTLE analysis emphasized the social, political and economic factors that may influence the business strategy. The paper also identified Adnams’ main competitors and used competitive analysis to determine a marketing mix that would appeal to the target audience, which was primarily young people. However, sustainability of this marketing strategy would depend on the firms’ recognition and appreciation of the cultural and linguistic differences across the entire target population.IntroductionAdnams plc is a mid-sized UK-based brewer of beer and located in Southwold, Suffolk. As of 2012, the company’s estimated turnover was 50 million pounds sterling (roughly $75.8). The company also produces minerals, wines, and spirits. The company has three main business divisions: brewing, wholesale distribution and retail sales. But the company also has other business ventures such as pubs and hotel administration. Adnams produces and markets beer brands such as Southwold Bitter and Broadside. Other Adnams products include East Green, Gunhill, Lighthouse, Explorer, Broadside and Broadside. Adnams First Rate Gin and Adnams Longshore premium vodka are among the brands of spirits. In order to expand its market reach, some products are sold on the company’s website. To gain an advantage over competitors, the company must develop a solid strategy. This paper evaluates Adnams’s ability to compete in this market.
DiscussionBeer & Spirit production industry is one the first growing industries in the global market. As such, industry players are expected to compete with other brewers. Adnams was asked to conduct a SWOT Analysis in order to develop a strategy that would be competitive.
Its major strength comes from its relative stability, despite the fact that it is a small company (Johnson and al. 2014, 607). This stability is now threatened by the company’s desire to become a family-owned business and open its doors to other countries. In addition, Adnams’ culture encourages great customer service. This has positively affected the company’s image and therefore market share. Adnams, by staying true to the roots of Southwold, has become a unique, special brand that is loved by the health-conscious consumers who want to know the origins of what they eat (Johnson et al. (2014), 607). The Brewers are facing more and better competition as a result of globalisation. Adnams’ expansion into overseas markets has seemed slow and they have remained steadfast in maintaining their UK market share. Adnams is not taking advantage of globalisation and has become more vulnerable.
Adnams has many strengths that contribute to its competitive strategy. These include its stability, culture of the organisation, outstanding customer service and uniqueness. Due to the increasing demand for beer, as well as the advancement of technology in the industry, opportunities are available. These factors motivate the brewers to create better products, attract more customers and build a relationship with their product.
The company’s strengths will determine the type of business it conducts in the marketplace (Altuntasa and others, 2015, p.304). Advertising costs can be a heavy financial burden for breweries. Adnams has been unable to expand due to its low budget. They have instead concentrated on a limited range of products and sluggish distribution. The SWOT report will identify the opportunities to grow that the company can use to increase profits and lower costs. Adnams could, for example access to a larger customer base by leveraging globalisation and regionalization. Tax increases, changing taste of consumers and antialcohol campaigns are all threatening attempts to improve finances within the industry.
PEST Analyse Using PEST analyses, these threats can be balanced by other opportunities. The integration of continental Europe through the creation of an integrated market and monetary system has created more opportunities in both a political and economic sense. The European Union created a market with similar tax systems and cultures. Adnams can learn from other countries’ best practices, such as those of the wine and beer makers in France and Eastern Europe. These opportunities show the importance of the company increasing their presence on the European market.
Porter’s Five ForcesPorter is an analytical tool used to assess the competitiveness of a business or organisation. Porter (2004, 56) states that Porter’s Five Forces is a tool used to analyse the competitive environment of an organisation or a company. In the brewery sector, factors like economies of scale and lack of distribution channels could be barriers to entry for new firms. A combination of the scale and technology used by existing brewers can ensure that they are able to produce their product at the lowest cost per unit. A new firm entering the beer industry will not be able to produce their products at a cost below the market. In most cases, the market is owned by breweries. A new competitor must find a way to reach the consumers. The new investor will also need to make huge investments into the technology of beer production, marketing, promotion, market research, and the acquisition of raw materials. In addition, government and lobbying groups are also involved in anti-alcohol marketing campaigns which have hindered the sales of alcohol on the entire market. This industry also has a high level of product diversity. Heineken & Lomza for instance, are two brands that have a high position in this market. This means a new entry will be challenged to gain trust and loyal customers.
Adnams will be able to maintain its competitive edge in the beer industry by leveraging the bargaining powers of their suppliers (Porter, 2004). In the beer sector, the loss of aluminum-based cost controls led to a significant increase in packaging costs. These materials have been recycled, reducing the dependency of companies on them. The target market for the brewery is the brand-conscious beer consumer. Johnson (1990, page 193) states that Brewers should focus on packaging, quality and customer service to attract this type of target audience. Most customers will select a product that best suits their tastes. As beer is not substituted for, there are few new products on the market. This is due to the fact that non-alcohol beverages have failed in their bids.
The Brewery Industry is a very competitive industry. In order to be successful, companies must have good marketing campaigns, use cost-minimisation technology, and offer attractive packaging. Heineken, Carlsberg and other market leaders also benefit from economies of size. The beer industry has different strategies for large, medium and small breweries to maintain profitability and gain market share. While large corporations spend a lot of money on marketing and promotion, small and medium-sized breweries are more focused on gaining market share.
ConclusionThis study aimed to assess the Adnams competitive strategy through a market-wide analysis. The paper concluded that Adnams has uniqueness in its brand and reputation, which can be developed to take advantage of the technology advancements brought about by globalisation. The Porter 5 forces were also used to highlight the fierce competition and difficulty of entry for new firms in the beer sector.
Due to intense competition, strategies for gaining a competitive market advantage are more complicated. Effective marketing strategies can play a key role in achieving firm goals such as maximising profits and increasing sales. Globalisation is a factor that has both benefited and challenged firms. Simsek (2015) argues that the globalization of markets has given firms more opportunities for profitability and success. A poorly managed entry to the international market could have a negative impact. Adnams, the UK’s largest beer brewer has faced fierce competition from international beer producers as well as smaller and medium-sized UK producers. Adnams can gain and maintain competitive advantage by implementing a solid marketing strategy. This paper uses tools such as a PESTLE Analysis and Competitive Analysis to identify Adnams’ marketing strategy.
DiscussionPESTLE is a term used to describe the analysis and evaluation of external factors that affect a business. The goal of this analysis is to determine if implementing a strategic approach will be successful (Priem & Butler, 2001). Simsek, Butler, and others (2015, p.474) state that the external environment is made up of components like the political, economic, social, technological, legal, and physical environments. Due to the increased economic integration in Europe, products from different countries are now freely moving across Europe. On the contrary, the European Union’s improved cooperation with non-European states has opened up many new opportunities for the brewing business.
Alcohol is second only to tobacco in terms of regulations against consumption. Globally, governments have implemented policies that affect alcohol consumption and distribution. These include price regulation; sales restrictions and licensing. Most states want to decrease the harmful effects of alcohol as well as the amount consumed. They also want to increase their revenue, which is why they raise the prices. Some countries also limit alcohol advertising.
Economic and social conditions are crucial to the success or failure of a business. The economic and social environment determines the business’s strategy (Priem & Butler, 2001, p.30). Businesses need to adapt their strategies according to the different economic systems that exist around the globe. Adnams main markets are the UK and European Union. Both have similar economic systems, including a trade policy that is common and rules for export trade. The exchange rate policy and factors affecting the labor market are also important economic factors. As an example, the UK uses sterling pounds and the rest uses Euro. The firm may be faced with multiple currencies if it is outside the European Union. The cost of labour varies across industries. In 2006, the EU average hourly rate was 20,35 euros. In 2008 the average wage rate in Eastern Europe increased by around 20%. In other countries, the financial crisis and recession of 2008 had an adverse effect on the beer industry and overall consumption.
In addition to the cultural and social beliefs of different countries, the beer industry is influenced as well. Religion is a major factor in determining a company’s target market. In the United States, for example, 33% are Christians, 21% Muslims, 16% atheists, while 14% of the population are Hindus. Breweries won’t target the 21% of Muslims because Islam prohibits them from drinking alcohol. Breweries have better technology for production, storage, and distribution.
Adnams is under pressure to become more environmentally responsible. They must therefore find ways to produce that are more sustainable. Adnams’ sustainability challenges are also a result of the scarcity and increasing demand by business owners to conduct business ethically. Barney and Hesterly’s (2012) p.87 states that consumers expect products to be sourced and produced ethically and responsibly. Adnams’ new green-storage facility and its use of recycled packaging have made it a leader for environmental accountability in the UK. But the company should use the European Union avenues in order to find cheaper raw material for beer and wines, particularly on more productive European markets.
Competitive AnalysisSome of these threats are: unpredictability in tax increases, changing consumer tastes, and anti-alcohol policy and campaigns by many governments and lobbying groups. Adnams is required to analyze the behaviour of buyers, segment the market and improve its brand identity. Adnams main competitors are Heineken & Carlsberg in this particular market. Due to their well-known brand identities, these two brands are market leaders. Adnams will have to create a strategy for its beer that is unique and differentiates it from the other brands in order compete with them (Jarazabkowski., 2005). The strategy to’remain unique and original’ has had positive results in the UK market.
Barney and Hesterly (2012) state that Adnams should identify its ideal customer when segmenting the market. To penetrate different markets, Adnams must take into account the age and country of origin when developing their marketing strategy. As an example, older generations are more loyal to brands and follow a traditional approach. Most of the time, older generations will stick to the local brand. Adnams’ marketing strategy shouldn’t place too much focus on the older generation. A young population tends to take risks and find foreign products unique and appealing. Adnams’ marketing and promotional campaigns should be aimed at this group. To develop loyalty in this group, it is important to consider their cultural orientation.
Marketing strategies will be successful if they are based on a marketing mix that includes the four Ps (Von Hippel Ogawa & De Jong 2011, p.10). The 4Ps include product, pricing, location and promotion. Adnams spirits and beer products should be offered at the correct price, in the right location, which is the European Union. The internet and technology have led to new marketing techniques, namely the emarketing mixture. Adnams’s marketing mix is therefore dependent on its own resources, market trends and client demands. Decisions should therefore be based on all aspects of the marketing mix, not just one element. The PESTLE analysis shows that the target group most easily accessible is the younger population. This group must be the focus of the company’s marketing mix. The group will most likely be tech-savvy and therefore the internet service is going to be appealing. But television networks, newspaper and magazine ads, and billboards are more effective at promoting products than internet.
ConclusionThis article aimed at analysing a strategy that would be applicable to the Adnams. The paper examined the external environment and identified the various opportunities and challenges it presented. As a result, the paper identified the government policies and cultural beliefs as the biggest challenges facing the firm. It also found that generational issues can have an impact on the beer market. Elderly consumers are traditionalists and not as receptive to new brands. The paper did recommend a marketing strategy that targets the younger population.
