Blog
Diageo and Emerging Markets - Great Section B BUSS4 Material
7th May 2013
Here is a superb article on Diageo's approach to key emerging markets in China and India and the rationale for it's choice of entry (through acquisitions and joint partnerships).
Some of the main points I picked out are:
* targeting the super deluxe end of the market
* a joint venture with a division of LVMH enables sharing of costs of marketing and distribution in China
* still a majority of spirits sales in China come from a clear Chinese liquor called Baiiju. Diageo has bought a stake in a leading Chinese manufacturer and distributor of such a drink
* In India, Daigeo has bought a stake in USL, a large drinks firm set up by Vijay Mallya. This allows Diageo to use USL's distribution network to leverage their own brands in to India as well as giving them access to USL brand Whyte & Mackay.
* The need not to completely ignore the continued importance nevertheless of established markets like the US.
A great case study for any BUSS4 student for Section B.