Introduction
Alcohol beverage is one of the most commonly used beverages across the world because of the ‘unique satisfaction’ it gives to human beings. As it has been revealed, the alcohol beverage industry is the most fragmented in terms of varieties of its commodities. In general terms, the alcohol industry produces three main categories of beverages namely: wines, spirits, and beer among others. In this respect, therefore, the general environment of the industry has a very significant impact on its performance and achievement of its laid goals and objectives. As the current world technology advances, the industry needs to incorporate modern technology techniques in the production of its commodities; to gain and maintain a good reputation in terms of quality and quantity production to meet the global market requirements.
To enhance efficiency and achievement of the laid goals and objectives, the industry needs to review its strengths and opportunities; as well as identify its threats and weaknesses. By so doing, the industry would be in a position to compete effectively in the current highly competitive global market dominated by innovations and technological advancements. More specifically, the industry requires pursuing attaining a strategic position that would make it achieve its laid goals and objectives within the current highly competitive and challenging environmental context. This paper will critically analyze the general environment of Global Wine and Spirits Giant Pernod Ricard Company and its impacts on the performance of the company in the Alcoholic Beverage industry.
Main Body
The general environment of the Global Wine and Spirits Giant Pernod Ricard Company consists of its components, cognitive maps, opportunities, and characteristics of its environmental analysis. More specifically, the general environment of the company covers all the aspects that affect the company’s performance; as it pursues achieving its general laid goals and objectives. As it has been revealed, the components of the Global Wine and Spirits Giant Pernod Ricard Company include its management personnel, its member mergers, and its financial and machinery resources.
Perhaps, the Global Wine and Spirits Giant Pernod Ricard Company has very competent personnel in terms of management. This is evidenced by its founder Pernod Richard, who has steered the company to high levels in terms of its performance in the alcoholic beverage industry. After the formation of the company in the year 1975, the company is described to have acquired a lot of strength from merging with other related companies which embarked an improvement in the company. The company’s rich resource base has also played a crucial role in propelling the company to higher levels in its performance. For instance, in the year 2005, the company acquired Allied Domecq for $14.1 billion; which was ranked as one of the top producers of famous brands of Vodka among others.
On the other hand, the industry environment of Global Wine and Spirits Giant Pernod Ricard Company has greatly favored its growth and development. As it has been found, alcoholic beverage is one of the fast-growing industries; following the current dynamic global society. The less restricting policies that exist in the industry, have greatly favored the development of the company in various ways. For instance, the merging policy of companies within the industry; which gives them higher potential in the exploitation of resources within the industry has seen significant growth of Global Wine and Spirits Giant Pernod Ricard Company. As it has been observed over time, they’re very low chances of substitute products in the industry of alcoholic beverages affecting the intake of wines and spirits among people. Based on this, the company has been able to produce large volumes of wines and spirits; without fear of market loss in the industry. As various economies of the world grow and develop, the buying and supplying powers of people have also been observed to increase as well. However, the industry has no entry barriers and thus the company still faces the threat of competition from new entrants into the industry.
The internal environment of the company comprises of its employees’ efficiency, the innovations, and technological advancement within the company financial capital resources the company has. On the other hand, the external environment of the company includes the political conditions, technological changes, sources of raw materials, socio-cultural forces, and demographic changes among others. In this case, the cognitive maps about the environment of the company should be pursued so as realize a strategic position in the accomplishment of its general set goals and objectives.
The internal environment of Global Wine and Spirits Giant Pernod Ricard Company is favorable in the sense that; its internal structure is well coordinated in ensuring the achievement of its goals and objectives. For instance, the company is described to be having highly qualified personnel in terms of management which propelled the company high in the production of high-quality brands of wines and spirits in the Southern America region. More so, the company’s decentralization plan by the company management has seen the expansion of its market which in turn has enhanced mass production; leading to economies of scale.
The strategic issues concerning the internal environment of the Global Wine and Spirits Giant Pernod Ricard Company have been found to revolve around its resources and the management personnel. For instance, the company has been found to have rich economic and financial resources; which have enabled it to acquire other reputable companies resulting in a higher income in the company. In this aspect, the cognitive maps associated with the internal environment include better management personnel and high-income flows; which would enhance a higher market command by the company for its products.
The external environment of the Global Wine and Spirits Giant Pernod Ricard Company has also favored its growth and expansion in which; has greatly impacted the general performance of the company. Pernod Ricard, who is the chief founder of the company, has been in constant touch with the outside world in pursuit of how to make the company more competitive in the global market. The political conditions across the world have been positive towards the alcoholic beverage industry and thus; Global Wine and Spirits Giant Pernod Ricard Company has not been facing any controversy from the government. This has enhanced its rapid growth and development in which the political environment of the company in a way motivated its expansion to capture a wider market in various parts of the world like the United Kingdom, France, Japan, and United States among others. More so, the positive demographic changes across the world have also played a crucial role in ensuring a wider market for the Global Wine and Spirits Giant Pernod Ricard Company’s products.
Further, the Global Wine and Spirits Giant Pernod Ricard Company has engaged in the formation of mergers with other related companies; which has enhanced its enormous growth and expansion in various aspects. More so, the expansion of the varieties of brands previously produced in the company has led to its higher sales income. For instance, in the years 1988, 1989, and 1993, the company merged with Irish Distillers, Orlando Wyndham, and Cuban Companies respectively leading to the formation of Havana club; which gained a lot of popularity in the market as a result of increased sales.
The Global Wine and Spirits Giant Pernod Ricard Company aim to ensure the company’s development through external growth; this could be achieved through the reduction of its debts. The company attained this by $4.59 billion from $8.10 billion within a period of11 months, in the year 2005 after the acquisition of Allied Domecq. Generally, the Global Wine and Spirits Giant Pernod Ricard Company has an advanced marketing and distribution network which has seen the company to higher business performance in the alcoholic beverage industry.
To ensure its prosperity in the industry, the Global Wine and Spirits Giant Pernod Ricard Company needs to analyze its strengths, weaknesses, opportunities, and threats. As it has been found, the company has various strengths which have propelled it very far in its performance in the alcoholic beverage industry. For instance, the company has been revealed to have a rich financial base which has enhanced its acquisition of other firms; making it more competitive in the industry. Further, the company has highly skilled management personnel; which has strategically planned for the best performance of the company.
The Global Wine and Spirits Giant Pernod Ricard Company is also faced with various weaknesses which have been barriers to its prosperity. For instance, the company has made very low innovations in its products which have consequently led to its low market capture across the world. More so, the company has a very low number of branches which has led to the acquisition of a low market size in the industry.
Further, the Global Wine and Spirits Giant Pernod Ricard Company has various opportunities that have put the company to a higher potential of prosperity. For instance, the world population has been increasing day after day which ensures a ready market for the company’s products. It has also been revealed that the Global Wine and Spirits Giant Pernod Ricard Company has a good marketing and distribution network which enhances its continuous ready market for its products.
Lastly, the company has been faced with various threats which pose danger to its prosperity. In this case, the company has been revealed to lack proper innovation and invention in its production which puts it in danger of lacking popularity once other related industries advance in that line of production. Generally, the company is in great danger of not being able to invent new products but rather relies on the acquisition of other firms in the industry.
The current strategic position of the Global Wine and Spirits Giant Pernod Ricard Company is that; it has established a strong position in various countries of its operations. This means that the company has localized its production occupying the leadership position and guaranteed sufficient sales. Further, the company has also established its decentralized structure in each country of its operations; leading to higher and stronger synergies between home and global brands.
Based on the current global requirements as a result of advanced technology and civilization, the company should pursue attaining a better strategic position to steer the company higher in terms of its performance. In this respect, therefore, the company should enter emerging markets and internationalize its production; to generate more income from the diverse world market. More specifically, the Global Wine and Spirits Giant Pernod Ricard Company should pursue acquiring the global market standards and expand its production to the main world market centers; to capture a larger market share for its products in the alcoholic beverage industry.
To achieve the above objectives, the company should create a ‘special research team’ which would research on potential market centers for its commodities across the world; for it to establish new branches in various parts of the world. More so, the company should aim at researching innovations and inventions; which would help improve its current products as well as create other better commodities.
Generally, it can be recommended that; the Global Wine and Spirits Giant Pernod Ricard Company should pursue establishing innovations and inventions in its production. This is because; through innovations and inventions the company would be at par with the immensely changing world to encompass the changing needs of people as well.
Conclusion
As it has been revealed, the Global Wine and Spirits Giant Pernod Ricard Company should review its environment, identify its strengths, weaknesses, opportunities, and threats and devise a strategic plan for it to secure a better business position globally. By so doing, the company would be in a position to compete effectively in the current technologically changing society.