Diageo existed in current guise for little more than decade. - Free Essay Example

Sample details Pages: 5 Words: 1432 Downloads: 6 Date added: 2017/06/26 Category Marketing Essay Type Analytical essay Did you like this example? 1. INTRODUCTION The organisation I have chosen to study is DIAGEO (1). The company itself is relatively young and although its parent companies have existed since 1749, Diageo has existed in its current guise for little more than a decade. Don’t waste time! Our writers will create an original "Diageo existed in current guise for little more than decade." essay for you Create order With heritage and pedigree in the food and beverage industry spanning some 250 years, the merger of United Distillers Vinters with Guinness and also Grand Metropolitan International Distillers Vintners in 1997, saw the formation of this global conglomerate recognised today as Diageo. Ever evolving, Diageo sold all food assets in 2002; a strategic move enabling them to focus on its global collection of premium drinks. Year on year, Diageo continues to deliver double digit market growth; performance not many businesses can claim in recent years due to the global economic downturn. 2. RATIONALE My rationale for choosing Diageo is that I recognised it as a large scale multi national manufacturing business, which I felt would suit this topic. Having grown up in Brora, a small village in the Scottish Highlands where a malt whisky named Clyneleish is produced, I feel as though I have a connection to Diageo, as they own the Clyneleish distillery and members of my family work there at the distillery. As Diageo are a global conglomerate, I felt that they could also provide me with sufficient information in which to investigate their business processes further. An additional benefit is that I have a family member with 22 years of experience working within a Diageo owned distillery; I felt that this may provide me with an additional opportunity to discuss the Diageo management structures, business processes, organisational objectives, environmental issues and achievements further. 3. AIMS OBJECTIVES Focussed on its staff, consumers and customers, Diageos aim is to become one of the worlds most trusted and respected companies and has a business strategy (2) of delivering sustainable organic growth through the stewardship of an outstanding range of premium drinks. The Diageo ethos is to do the right thing every day, everywhere, with a view to increasing market share, adding value, whilst meeting financial objectives. 4. ORGANISATIONAL STRUCTURE As a publicly owned global beverage manufacturer, the Diageo brand is segregated into 4 geographic locations, with  £3 billion in revenue generated in over 180 markets. Each continental headquarter has one Director, who manages their business process and environment. Operational functions are executed by geographic regional management, each being responsible for meeting Diageo strategic objectives; responding to regional market analysis and opportunity. Within a global suprasystem, this internationalised (3), democratic and progressive organisation fully involves its staff in decision making due to the value placed on workforce knowledge and experience by management. Increasingly managed scientifically (4), Diageo operates 129 different facilities, 50+ of which are in Scotland. Global and European headquarters are based in London and more pertinently, within Scotland there are 4 main offices controlling operational assets, such as: 27 Malt distilleries 3 Grain distilleries 4 Malt-houses 7 Warehouses 4 Cooperages 3 Bottling halls 3 Packaging plants 5. ANALYSIS The illustration below demonstrates the Inwards systems approach adopted by Diageo in order to increase efficiency and reduce operating costs. This is demonstrated by use of a standardised supply chain, manufacturing and distribution procedure throughout their global network. I believe the careful management of the internal manufacturing, process standardisation, accompanied with the unique set of resources captured within Scotland has led to Diageo producing a strategic business resource and has led to them gaining a significant and competitive advantage over their business sector rivals. Diageo North America Diageo International Diageo Europe Diageo Asia Pacific Retail Operations Global Supply HRM Marketing Innovation Corporate Relations Legal Procurement Value Chain Diageo have a sophisticated value chain that links to Porters Model (5), ensuring value is added at each operational stage by forging relationships with businesses that have similar core values. Seeking mutual benefit and also to raise social standards, the Diageo Value Chain aims to create economic opportunity for other businesses involved within it and focuses on 3 key areas: Customers Diageo customers are the product distributors and retailers. Diageo creates business for customers by providing the product and by offering commercial skills and resources to enable responsible business growth, maximising customer returns. Suppliers Diageo works with approximately 20,000 suppliers. Promoting responsible relationships, Diageo examines commercial considerations and ethical issues such as labour relations, health and safety, environmental management and business integrity. Consumers Brand quality is the basis for the trust formed between the consumer and Diageo; this comes from consumer confidence in the product and is achieved through several means, such as product quality, environmental sustainability, continued staff development and the reinforcement of alcohol awareness in todays fragile society (6). PESTEL Analysis Every business organisation whether they are inwardly or outwardly focussed is subject to an inordinate amount of external pressure, on areas such as procurement, manufacturing, distribution, advertising and sales. Environmental pressure analysis is crucial to the Diageo success and the following table is a flavour of my initial interpretation of this: Political Positive Negative Positive contribution to and exertion of influence on the UK Taxation system. Global social investment programmes in countries where Diageo brands are sold. Extant global trade agreements. Excellent cultural and social awareness programmes in place. Governmental instability and change within countries where Diageo products are sold. Diageo threatens to move its global headquarters outside UK, due to taxation system. Economic Positive Negative Global value chain partnerships boosting economic growth. E.g. Recent local investment of  £86 million in Fife, Scotland creating 400 jobs at a bottling plant. Low interest rates and inflation in the UK. Global recession and economic downturn may have a negative impact on third parties with whom Diageo does business. Reduction in consumer spending levels on executive products due to recession. Potential reduction in market share due to increased sector competition. Social Positive Negative Global demographic varying brand demand. Excellent strategy for environmental and community project investment. Excellent media and alcohol awareness strategies, promoting responsibility. Possible workforce disruption due to organisation re-structuring and streamlining of plant operational processes. Reduction in general household expenditure due to global recession. Technological Positive Negative Strong re-investment strategy into production capabilities (RD). Global supply and distribution network improvement. Staff reduction due to increased operational efficiency and process management. Environmental Positive Negative Fully committed to environmental sustainment through investment in global environmental projects. Staff inclusivity, development and morale. Brand value and consumer confidence. Environmental regulation limitations, increasing production costs. Ecological restrictions. Legal Positive Negative Excellent commitment towards responsible alcohol consumption and consumer protection. Industry specific quality regulations. Extensive global regulatory requirements increase production costs and manufacturing time. 6. MEASURING SUCCESS To remain the global market leader, Diageo success can be partly attributed to its active corporate performance measurement. This can be evidenced by its re-investment strategy of committing 1% of operating profit into production capabilities, i.e. production improvement, global community and social investment projects (7). Diageo set 60 KPIs last year, measuring success by evaluation of key areas such as socio-economics, environmental sustainability and the media. As a member of several global associations, Diageo continually analyses its own value chain, competitive advantage and market share through production, sales, consumption and economic evaluation. Global media investment in advertising and promotions touches  £500 million. In Scotland alone, Diageo re-invests  £75 million into production capabilities and is responsible for the following: 20% of Scottish food beverage worldwide exports are Diageo branded Employment of 4500 staff within Scotland Sustainment of 12000 staff in other value chain companies  £400 million paid to Scottish suppliers raw materials, manufacturing production The following is an illustration of area sales year ending 30 Jun 10: Region Sales % Annual Consumption (Cases) Daily Consumption (Measures) North America 34 30 Million Whisky 12 Million white spirit (Vodka etc) 81 Million Spirits 19 Million Beer 4 Million Branded 3 Million Wine Europe 28 International 27 Asia Pacific 11 The illustration below appears to fit the Diageo mission statement of doing the right thing and positively influencing environments and societies around the world. Ultimately, measurement of success within the manufacturing/retail sector lies within operating profit; however examination of the bigger picture leads me to believe that the global consumer and the society in which they live measure the success of this company. The uniqueness of the Scottish Whisky industry, the staff and their invaluable experience lie at the heart of Diageo, hence its market strength and double digit year on year growth. 7. CONCLUSION As a global conglomerate, Diageo is a market leader not just in terms of vision and values; but with strategies across many different areas, such as brand heritage and quality, environmental awareness, global supply, social development and many more; the competitive advantage is plain to see. Regardless of the number of awards (8) Diageo wins the global consumer endorses my belief that they are the Worlds best beverage manufacturer.

The Motorcycle Diaries, Natural Lighting And Quick Camera...

In The Motorcycle Diaries, natural lighting and quick camera movements are consistent layers in the filming technique used. To evoke a greater sense of importance in certain scenes, directional lighting is used. An important and foreshadowing scene in the film, the ferry from Pucallpa, Peru to the leper colony shows the division of wealth through soft natural lighting and the use of shadows. This particular scene uses an important element of mise-en-scene, lighting, to create a powerful, suggestive introduction to the culmination of their voyage. The 1-minute sequence is free of dialogue, but conveys necessary information through subliminal filming techniques. The scene begins with a wide, overhead crane landscape shot that encapsulates town they’re leaving in a shadow, while the ferry is surrounded by bright, natural light, heading towards the unknown. This particular shadowing may infer they’re leaving the past behind, while the engulfing bright light may indicate a p ositive future in their travels. The next shot is a lower side shot that shows the expansive river and the ferry with a small-unidentified boat trailing behind. This scene is void of any structures other than the forest behind the two boats. Slowly, the boats move down the river with beautiful, soft side lighting from the natural sunset. The use of this lighting induces a personal connection with the ferry and its respective travels. Different from a typical Hollywood scene, the side lighting allows forShow MoreRelatedDieting Makes People Fat Essay19490 Words   |  78 PagesYOUR FAVORITE DRINK? I love to drink strawberry yogurt smoothie about 2-3 times per week. 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Jp Morgan Chase and Company Free Essays

string(96) " was able to capitalize on the \$1 billion investment of BankOne in its own information system\." In 2002, JP Morgan signed a seven-year outsourcing arrangement with IBM, worth 5 billion dollars. This deal included data centres, help desks, distributed computing, and data and voice networks. JP Morgan viewed this agreement with IBM as a competitive advantage that would serve as a platform for efficient growth and innovation. We will write a custom essay sample on Jp Morgan Chase and Company or any similar topic only for you Order Now It was an attempt to further enhance the performance of the company, while reducing their costs. However, two years later, JP Morgan announced the premature ending of their contract. JP Morgan ended the outsourcing deal with IBM, claiming that it caused technological stagnation in their operations. Apparently, IBM refused to take on tasks without additional charge, particularly necessary improvements to the system. This structure lengthened certain procedures, and as result, projects sat idle and processes were stalled. Another reason behind the deal cancellation was internal organizational changes. JP Morgan merged with Bank One, which has cancelled a similar deal with IBM a few years earlier. With the combined resources and technology of the banks, management reassessed its capability of managing its core information systems, and realized that the IBM deal was no longer necessary. JP Morgan Chase and Co. wanted to leverage on the assets it acquired from Bank One, including a $500 million investment in data centers. Also, ending the deal would mean saving the margins paid on hardware and software purchased through IBM, as the size of the newly merged bank would enable it to negotiate better bargains with suppliers – JP Morgan Chase and Co. , after that time, emerged as the second largest financial conglomerate next to Citigroup. Analysts believed that the primary catalyst for the back sourcing was the change in leadership. Many of the key officers of Bank One took over JP Morgan Chase and Co. by holding the same positions that they had in the former. Some of these were CEO James Dimon and CIO Adam Austin. As emphasized by Austin, the new management wanted to have greater involvement in every aspect of their business, and IT is an important part of it. In fact, Dimon, being in the industry for years, had made a reputation of investing in internal strategies, which explains why experts were not really surprised by the premature death of the IBM contract. ANALYSIS AND CRITIQUE Given the different scenarios that happened, it is necessary to focus on the impact of the outsourcing and backsourcing deals of the company, and deducing which arrangement is better for the company. The Impact of Outsourcing JP Morgan Chase’s contract with IBM is said to be one of the largest outsourcing deal on record. However, this 5 billion-worth of contract was only in its second year when JP Morgan opted to end its supposed-to-be-7-years relationship with IBM. Apparently, the outsourcing deal hugely affected the operations of the company. First of all, outsourcing had a negative impact on the effectiveness on some key processes of the bank. Things that used to get done no longer got done. In just a short span of time, instead of improving the company’s productivity, the outsourcing deal had caused so much delay. Among the projects not getting done were server migrations, data center upgrades, and network patches. Corollary to that, even in office supply procurement, there were also delays. It even reached the point where project managers had to go and buy their own reams of paper. Secondly, there were vague contract details in the agreement between JP Morgan and IBM. As a result, whenever there is a need to make improvements and updates, IBM had to charge extra fees to the bank. Thus, every additional improvement in the system entailed additional costs. Because of the bank’s resistance to pay for extra but often necessary improvements, JP Morgan’s innovation and efficiency in its information technology was compromised. Thirdly, to implement the outsourcing deal, JP Morgan had to lay off 4000 employees, which lead to a drop in employee morale. With the loss of job security, employees lost their trust in management. Employees refused to commit to any project, and started to slack off. As a result, a lot of work were not getting done, which led to a decrease in the productivity of the company. The Impact of Backsourcing In the light of the shortcomings of the outsourcing deal and the implications of the merger with Bank One, JP Morgan opted to backsource. Bringing their IT back in-house also had huge effects in the company. Firstly, employee morale remained low. Many were resentful that the reasons why management outsourced- i. e. o gain competitive advantage, to improve efficiency, and to accelerate innovation- were also the reasons why they backsourced. As a result, they lost trust in the honesty and soundness of management’s judgment. Job security was still an issue, as more layoffs occurred, not only because of the backsourcing arrangement, but also because of the merger of the two banks. Some employees reapplied for their jobs, but were paid with less than 20% of their original salaries. With such a low morale, productivity in the company dropped, employees were reluctant to commit to projects, and more work piled up. Secondly, the company spent twice the cost of reorganization: that is, they had a huge capital outlay to support an outsourcing deal, then incurred another set of expenditures to reverse those actions and set up a backsourced environment. Outsourcing costs incurred by JP Morgan are mainly due to the huge consultation fees for process reengineering. They also invested in counselling and retention bonuses to retain the employees through the transition period. As JP Morgan backsourced IT, they incurred huge losses for prematurely ending the contract. Moreover, the changes made in outsourcing were done all over again in reverse. With that, they had to spend twice for the costs of reorganization. They had to re establish all their systems, staffs, operating procedures, organizational structure, and corporate strategies. Fortunately, JP Morgan was able to capitalize on the $1 billion investment of BankOne in its own information system. You read "Jp Morgan Chase and Company" in category "Papers" Finally, in moving from an outsourcing deal to a backsourced environment, JP Morgan had to deal with organizational disruption. Management had to reengineer their processes and make huge readjustments in their systems and operations. Organizational responsibilities were redefined, and management completely reversed how things were done. Outsourcing Vs Backsourcing When JP Morgan prematurely ended their contract with IBM, the CEO said, â€Å"We believe managing our own technology infrastructure is best for the long-term growth and success of our company, as well as our shareholders. Our new capabilities will give us competitive advantages, accelerate innovation, and enable us to become more streamlined and efficient. † However, these were the same reasons that management gave when they entered the outsourcing deal. So the question is: which would provide greater benefits for the company – outsourced operations, or a backsourced environment? The main reason why companies outsource is to be able to focus on their core activities. Many businesses have generic functions such as phone reception and customer service. When these generic functions are outsourced, companies may focus on their key processes. Outsourcing would also lead to efficiency and cost savings, as overhead expenditure are reduced. Outsourcing can also provide operational control as poorly managed functions are provided by companies like IBM who are better in these areas. However, according to the studies of Deloitte Consulting, 70 percent of companies that outsource report significant negative experiences with their outsourcing projects. Apparently, outsourcing has a number of limitations and weaknesses. The most common issue is the loss of control when the management of certain functions is turned over to another company. The outsourcing company may lose the ability to adapt to a rapidly changing environment. Additionally, the quality of the service provided may not meet expectations, because the service provider is not driven by the same standards as its outsourcer. Service providers simply aim to meet the conditions of the contract, and not necessarily strive to provide the needs of the outsourcing company. Consequently, outsourcers incur more costs as they modify the terms of the contract, or as they settle for an inadequate system. With the said problems of outsourcing, companies may resort to backsourcing their operations. Nonetheless, in the aforementioned study by Deloitte Consulting, only 25 percent of the companies that had problems with outsourcing brought IT back in-house. The difficulty in backsourcing can be traced to the high costs of reorganization and the organizational disruption during the transition period. However there are a numerous benefits of having an in-house system. Firstly, management would have complete control in their operations. This leads to greater flexibility, since changes in operations could be implemented more easily. Secondly, management could also control the quality of the operational functions of the company, by setting their standards of performance in their workforce. Finally, they would be able to avoid the need for ongoing renegotiations and the high recurring costs of modifications. The decision whether to outsource or insource should mainly depend on the processes of a company. Organizations may outsource processes that do not fall under their main competencies, or non-core processes that consumes much of their resources. This would save them time, effort, and manpower, while enabling management to focus on the company’s strengths and core operations. On the other hand, it may be more advantageous to insource specialized processes that are impractical to outsource like Research and Development. Moreover, as in the case of JP Morgan, it is better to insource because the company can actually provide better services at lower costs in-house, with the facilities of the acquired bank – Bank One – readily available for JP Morgan’s use. PHILIPPINE SETTING A similar case in the Philippines is the agreement between Government Service Insurance System (GSIS) and International Business Machines (IBM). In 2004, GSIS began migrating to a new computerized system, with an IBM DB2 software designed to manage all data pertaining to members’ and pensioners accounts. GSIS claimed that it spent around P40 million for the DB2 software and IBM P-series servers. Unfortunately, in March and April 2009, the database software encountered a problem with the pension firm’s Integrated Loans, Membership, Acquired Assets and Accounts Management System (ILMAAAMS). The ILMAAAMS, which ran on IBM’s DB2 database software, reportedly crashed because of the vast amount of transactions made by GSIS members, composed of about 1. 5 million government employees and 200,000 pensioners. This translates to about 3 million records on file coming from 8,000 agencies nationwide, simultaneously. According to GSIS, about 90% of its operations were adversely affected by the crash, which resulted to approximately Php5 billion in actual damages. The company blamed IBM for the disruptions, accusing the latter of supplying defective database software. GSIS filed a Php100 million legal case against IBM Philippines, who in turn filed a Php200 million libel suit against the GSIS for its series of negative advertisements against them, both in print and broadcast media. In November 2009, GSIS started migrating to the HP – Oracle System and was able to complete the process in just six weeks. At present, the legal war between GSIS and IBM continues. Recommendations: Outsourcing is a double edge sword. It could either benefit a company or it can also cost that company a lot. Thus, many things need to be considered in choosing between outsourcing and the more traditional in-sourcing. Therefore, the situation of JP Morgan Chase and Co. could have gone on a better way if they just prepared and improved on certain aspects as follows: The negotiations with IBM should have contained certain terms which could possibly mitigate the risks involved in their contract. First, the contract negotiations should have had clarified the terms and limitations of both parties. Having clearer terms and limitations will help both parties adjust to different situations and formulate the right solutions to the problems that may arise. There should also be better preparation, a set plan of action and a ready exit strategy. Also, JP Morgan Chase and Co. should have asked for flexibility in the technology, the outsourcing partner uses. They should have specified that the process or technology should fit or, at the very least, work hand in hand with the business’s existing processes. There should also be a stipulation regarding review points to allow the relationship to change or end. JP Morgan Chase and Co. should consider that contracts have shared elements of both risk and reward. Greater risks entail more rewards precisely why JP Morgan should strike a balance between these two. It should perform different analysis tools in order to weigh alternatives more accurately. This, in turn, will help the company decide what projects to perform and which deals to enter. For example in the case of JP Morgan, short-term outsourcing contracts benefit the company better than long-term contracts. In some cases, it could be a good mix of short-term and long-term contracts as determined by the nature of the contract that will provide the best rewards for the company. Essentially, it is a matter of being able to correctly judge and weigh alternatives that will yield the best results. ————————————————- Finally, the company should learn how to value its most important asset, the people. It should have been more honest and open with the employees about matters affecting the situation and condition of the company. Being the most important asset of the company, human capital or employees should have been more involved in instances like this. As a summary, the following are the key points to be remembered from the JP Morgan and Chase experience: 1. For financial intermediaries in particular, outsourcing is not recommended. Outsourcing was a trend for many industries, especially in late 80’s until the early 90’s. This provides organizations the chance to concentrate on their core competencies by having their IT functions off shored. Much of the stories with regard to this business trend were written on the earlier years of the deal, stories on the implementation years however, remain scarce. A company has to consider how it will ultimately affect its operations before jumping in the outsourcing bandwagon. Financial intermediaries in particular would be better off without outsourcing as the latter adversely affects performance of the company, particularly its capability to innovate and be efficient which takes a toll on the totality of the organization’s performance. 2. Backsourcing is not for everyone. In a company where the latest data are the most crucial, it is recommended for them to keep their IT functions in house, especially in the case of JPMC where they had all necessary infrastructures ready for their IT functions. Departmental functions once outsource will incur twice the expenses if brought back once again to the company. Backsourcing is not a one size fits all solution rather it depends on the company’s available resources that determines its capability to bring in the IT functions again. 3. Negotiate shorter deals Shorter deals promote flexibility which proves to be the most important factor missing in the JPMC situation. Albeit more expensive, this provides companies less expensive solutions and exit strategies in case deals go awry. 4. Always remember the value of employees The outsourcing and insourcing juggle brought down the morale of many of the employees. What the company failed to see was the fact that this constituted much of the intangible costs incurred. 5. Remember to weigh alternatives carefully. Organizations often overlook or ignore the relationship between cost and quality of service. The relationship is a simple one. If you want to differentiate your IT service, provide the highest quality service and the highest quality products, it generally costs more. If the decision is IT costs too much, it is relatively straightforward to reduce IT costs, but commensurately you also reduce service. † (Hirschiem, 1998) Higher expectations, particularly in IT lead to higher costs. More than just following the current trends in the industry, determining what to do with departmental functions involve planning and weighing alternatives carefully. How to cite Jp Morgan Chase and Company, Papers

Memo CPA Firm

Question: Memo 1 Mr. Howe, a Junior Partner of the CPA firm Dewey, Cheatem Howe, has asserted that the business of business is business and that Corporations exist to maximize profits. Required: Discuss whether this assertion is a reasonable way to manage corporations, discuss any viable alternatives, and come to a conclusion. Answer: To: Mr. Howe, a Junior Partner of the CPA firm Dewey, Cheatem Howe From: A Date: January 24, 2015 Re: can an investor beta the market with the help of the stock valuation model or the efficient market hypothesis Context line: Beating the market Action: Yes, the market can be beat Everyone wants to earn some extra cash today and one of the easiest ways to do the same is by investing in the stock market. But it is not easy for each and every one to earn money by investing in the stock market. An investor has to play by the rules of the foreign exchange markets. An investor has to apply himself solely so that he can think out of the box and pick up of the right stocks that can help him in achieving his objective. The market today has become inefficient. This merely means that the studies have become stronger and have gained a momentum. The concepts like the market hypothesis through the use of the computers have offered much help. (Economist, 2015) (Simple dollar, 2015) (WSJ, 2015) The beta is the way of measuring the stock. When an investor studies this, he gains an insight into the way in which the stock moves and the reasons due to which the stock move the way in which it does. When an investor gains an insight into the movement of the stock, he can compare the markets using the market index and earn in the long run. (Money Zine, 2015) References: Money-zine.com, (2015). Stock Beta and Volatility. [Online] Available at: https://www.money-zine.com/investing/stocks/stock-beta-and-volatility/ [Accessed 24 Jan. 2015]. The Economist, (2015). The Economist - World News, Politics, Economics, Business Finance. [Online] Available at: https://www.economist.com/ [Accessed 24 Jan. 2015]. Hulbert, M. (2013). Man vs. Machine: The Great Stock Showdown. WSJ. Retrieved 8 February 2015, from https://www.wsj.com/articles/SB10001424127887324059704578471154109438438 The Simple Dollar, (2011). How Can I Beat the Stock Market? - The Simple Dollar. Retrieved 8 February 2015, from https://www.thesimpledollar.com/can-individual-investors-beat-the-stock-market/