Strength, Weakness, Opportunity, and Threat of Johnnie Walker - Case Study Example

?Johnnie Walker Table of Contents SWOT (Acronym: Strength, Weakness, Opportunity, and Threat) Analysis 3 Strengths 3 Weaknesses 4 Opportunities 5 Threats 7 Socio-Political Issues Related To Johnnie Walker and Problem Identification 8 Devising Solution 9 Conclusion 10 References 12 Introduction Johnnie Walker is a leading and world-renowned brand of Scotch whisky retained by Diageo plc. The brand is one of the most extensively distributed brands of blended Scotch whisky. The brand is sold in almost all the continents of the world. Owing to its extensive sales figure of around 130 million bottles annually, it is considered as the one of the most valuable and recognised spirit brands. It can be firmly admitted that the brand has been serving not only as the symbol of progress but its logo “Striding?Man” and its slogan “Keep?Walking”?has also been viewed to be a supporter of progress as well as analogous to great achievement. The creation of brand actually was the idea of John Walker who was born in Scotland at Todriggs Farm in Ayrshire in the year 1805. Since its incorporation, Johnnie Walker has been able to establish itself as the world’s most prominent Scotch whisky brand (Association of Canadian Advertisers, 2011). Correspondingly, this paper intends to conduct the SWOT analysis of Johnnie Walker and further attempts to identify the inherent problems to its strategic behaviour in order to draw derive rational solutions for the identified issues. SWOT (Acronym: Strength, Weakness, Opportunity, and Threat) Analysis Strengths According to Corporate Watch UK (2005), Johnnie Walker is the world’s leading spirit brand. Reportedly, Johnnie Walker is considered as the most valuable and respected global brand. The legacy and heritage connected with the brand can be reflected as one of its major strengths. Taking virtues of its legacy and strong brand promotion, the brand has been able to continuously build is brand equity globally. At the same time, it has been able to generate substantial revenue across the global market. One of the potential strengths of the brand can thus be attributed to increasing demand for its products such as The Gold Reserve and Blue Label, which are perceived to be the most popular in all its market of operation. Another major strength is accredited to its attention given to all the class of the people. The brand offers products to not only premium customers, but it also focuses on middle-income customers who have the increasing desire for premium spirit. Notably, not only the men but women in the Asian country are also attracted towards experiencing the value offered by Johnnie Walker to its discriminating consumers. Furthermore, its revolutionary advertising strategies have proven to be much effective and unique from competitors existing in the same market of its operations adding to its brand differentiation strategies. Evidently, by offering wide range of product categories at various price points along with high product quality, it has been able to attract both younger and older consumers. Nonetheless, its innovative advertising campaign has proven to be milestone for the brand to retain its customers and simultaneously, attain tremendous growth in all the markets of its operations (Mongay & et. al., 2012). Weaknesses One of the potential weaknesses associated with the brand can be attributed with its nature of business. Correspondingly, the brand primarily deals with alcoholic products, which is considered to have serious impacts on the health of its consumers and therefore raises a certain degree of moral weakness for the company. Although, it claims to produce Scotch whisky at reasonable price that can be consumed by middle-income consumers, but it is generally involved in manufacturing premium products that may adversely influence the purchasing decision of the middle-income people also causing sustainability issues for the company. At the same time, increasing cost of production can also be viewed as the potential weakness for the brand. It can be argued that reliable supply of superior quality of water is essential for producing quality products. However, in emerging markets such as in Asia, considerable expenditure are required to be made in order to ensure uninterrupted source for reliable water, necessary for the production process, which may deter the ability of the brand to earn substantial revenue. Furthermore, the slogan used by the Johnnie Walker for promoting its products has been widely protested in some of the countries of its operations particularly in Brazil. Such protest against the brand can be perceived as notably hampering the brand image of Johnnie Walker, which can significantly reduce the revenue generation capability of the brand (Wentz, 2013). Opportunities In recent industrial report, it has been ascertained that the global market for Scotch whisky is expanding rapidly (Kevin Barnard, 2013). Accordingly, in the international marketplace, the Scotch segment represents the considerable opportunity in worldwide travel retail value with 28% share of both volume and value. Similarly, premium Scotch has emerged as the valuable sector representing a worth of $285m, which is estimated to expand further in the later years. In this regard, it has been projected that Super premium Scotch whisky product will grow at 4% while Ultra premium is likely to grow at 10%. It has been further observed that status conscious high spending consumers are switching towards premium scotch products as a symbol to signify their status. Arguably, not only the status conscious consumers but almost all the categories of consumers are premiumizing and are inclined towards higher quality alcohol brands in the current market situation (Kevin Barnard, 2013). Thus, the growing interest of customers towards premium Scotch whisky has offered Johnnie Walker with increasing opportunity to expand and exploit the growing demand prevailing in the worldwide market segments. Not to a surprise, it has been ascertained that Johnnie Walker continuously acts as a driver for growth in the industry, ahead of the projected trend at 48%. The continuous innovation of Johnnie Walker and addition of new flavours and recipes to its product line can also be attributed as one of the potential opportunities for the brand to promote sales and exploit the market prospects along with attaining long-term favourable impacts on the brand. The prospects of global penetration in both developed markets as well as emerging markets have also offered it with an increasing opportunity to acquire large and loyal customer base. At the same time, the growing market for hospitality industry has also increased the occasion for parties and events, which can be ascertained to offer radical opportunity for the brand to boast its sales and capture considerable market share (Kevin Barnard, 2013). Threats There are various factors that can be accredited as threat for Johnnie Walker. Correspondingly, the increasing competition across the industry presents few of the major threats to the brand to successfully sustain its business globally. Historically, the competition was relatively low within the industry; however, with the growing demand for such products, the level of completion has also intensified. Moreover, rapidly augmenting non-alcoholic beverage industry has also presented an increasing threat to the global brand. Correspondingly, it can be stated that soft drink products may probably serve as a substitute for the products offered by Johnnie Walker. To be illustrated, even though the brand determined towards penetrating in the different markets of the globe, the cultures prevailing in the different markets impose diverse effects, which may further raise significant threats for the brand to understand the discriminating needs of the potential customers in the global markets. For Johnnie Walker, penetrating in new market is quite challenging tasks as most of the countries particularly the Asian countries have highly regulated market which might act as a threat for its anticipated growth strategies. In this regard, the increasing level of tax chargeable on the level of alcohol imported can also be identified as potential threats for the brand. Additionally, increasing the age limit for drinking alcohol in many countries have also presented threats for the brand (Association of Canadian Advertisers, 2011). Socio-Political Issues Related To Johnnie Walker and Problem Identification In the recently witnessed trends of the global society, people are becoming more concerned about their health and safety. Currently, people are viewing alcohol consumption as a potential source for many illness and injuries. In addition, it has been viewed that younger people in the society are widely attracted towards the consumption of alcohol containing products, which has arose vital issues for the successful operation and sustainability of the Johnnie Walker. The protest against the Johnnie Walker’s promotional campaign in Brazil can also be identified as major social issue that may possibly hamper its brand image in the nation and other similar societies. In addition, the government of the various nations have also been identified to have increased the tax levied on the entities producing alcoholic products such as Johnnie Walker. Moreover, stringent regulations in emerging markets like China have also deterred the ability of Jonnie Walker to expand its business at relative ease. The government is also been involved in rising the age limit for drinking alcohol, which altogether constitutes to the political issues faced by the brand in the global market. In precise, the increasing health conscious behaviour amid the global customers and imposition of higher level of tax followed by more stringent regulations has offered radical problems for Jonnie Walker to sustain its business profitably in the later years. Therefore, it has become urgent for the brand to resolve these challenges in order to ensure reliable and smooth operations of its business in the near future (American Medical Association, 2002). Devising Solution In order to effectively tackle the socio-political challenges, it is crucial for Johnnie Walker to develop an image not only as a leading producer of Scotch whisky but also as a responsible corporate citizen. It should also develop viable campaign strategies that would have lesser impacts or exposure on the young individuals, rather the campaign undertaken should be limited to factual information. Furthermore, the brand should also endeavour towards reducing the non-commercial ways of youth exposure to consuming products containing a noteworthy amount of alcohol. It is also crucial for Johnnie Walker to sponsor educational programs and evade using slogans that are youth oriented and might ignite social issues. At the same time, the brand should focus more on producing Scotch whisky that contains less alcohol in order to reduce the implications of tax levied on alcoholic products. Furthermore, inculcating social and environmental aspects, while determining penetration strategies, will also make the brand less influenced by the stringent regulations imposed by the countries. In precise terms, the aforementioned socio-political problems can be mitigated by promoting responsible drinking habits and by evading deceptive marketing strategies in the brand promotion strategies of Johnnie Walker. Such initiatives will facilitate the brand to be represented as a socially responsible corporate citizen as well as it would help the brand to establish stronger brand image. It can be further admitted that such intuitive will significantly aid the brand to promote its products in a socially responsible manner (American Medical Association, 2002). Conclusion Johnnie Walker is considered as the most popular Scotch whisky brand available around the world. Despite the large number of competitors, the brand is widely valued and respected worldwide. Notably, since its incorporation, the brand has been able to expand its business across the wide global market operating in almost all the regions across the world. Its logo and slogans have been often recognized as a symbol of its progress and achievement, in addition to various factors were recognized that has contributed towards its success. Accordingly, its legacy and heritage has been identified as the most important factor that has facilitated Johnnie Walker in differentiating its products from the rest of its competitors. Another major strength factor has been its popularity and use of its products analogues to the status of its targeted consumer group. It is correspondingly been observed that many people relate the consumption of its products as a status symbol. Irrespective of these strengths and opportunities, being associated with alcoholic product has contributed towards a major moral weakness of Johnnie Walker. The protest against its advertising campaigns in the recent time has also adversely affected its brand image. Nonetheless, the increasing demand for Scotch whisky across the globe has offered the brand with enormous opportunities to expand and grow its business. Nevertheless, certain threat factors were also identified in relation to the operations of the brand. Among these threat factors, the increasing level of competition within the industry as well as threats of substitute from non-alcoholic products has altogether increased the probability of reducing demand for its products. Social factors such as increasing health consciousness among the global customers as well as increasing level of tax have also created significant hindrances in the execution of successful operations by Johnnie Walker. In order to effectively deal with these socio-political challenges, it is crucial for Johnnie Walker to develop an image of socially responsible corporate citizen. Furthermore, it should evade from using slogans that leads to maximum exposure to youth. Such initiatives would dramatically facilitate the brand to meet the socio-political issues in the most efficient manner. References Association of Canadian Advertisers, 2011. Johnnie?Walker?and?Dragons’?Den?SMA?Submission. Overview, Objectives?and?Sponsorship?Selection. [Online] Available at: http://www.acaweb.ca/en/wp-content/uploads/2011/02/Case-961.pdf [Accessed November 17, 2013]. American Medical Association, 2002. Alcohol Issues. Policy Briefing Paper. [Online] Available at: http://alcoholpolicymd.com/pdf/foe_final.pdf [Accessed November 17, 2013]. Kevin Barnard, 2013. Johnnie Walker. Luxury: The world is premiumizing. [Online] Available at: http://barnardgraphics.com/KGV_SELLSHEET_5.pdf [Accessed November 17, 2013]. Mongay, J. & et. al., 2012. Scotch Whisky in Thailand. Strategic implications of international alliances and product adaptation. A Secondary Data Research Case Study. Existence and Impact [Online] Available at: http://mpra.ub.uni-muenchen.de/42735/1/MPRA_paper_42735.pdf [Accessed November 17, 2013]. Wentz, L., 2013. Brazil's Street Protesters Draw on Fiat, Johnnie Walker Ads. Crain Communications. [Online] Available at: http://adage.com/article/global-news/brazil-street-protesters-draw-fiat-johnnie-walker-ads/242748/ [Accessed November 17, 2013]. Read More