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Part 1 – Information Audit
Literature Review & Information Audit ,This part aims to cover the introductory aspects of the company such as the company background, company structure, the industry, and the category under which it is listed on the stock exchange, the main competitors of the company and the reliability of the information that is publicly available for the company.
Various sources are used to analyze these aspects for the company; the company selected for this case is Diageo which is a UK based company.Literature Review & Information Audit
Company Background
According to Diageo (2015a), the company selected for this assignment is Diageo Plc. which is a beverage company dealing in all sorts of alcoholic beverages. Diageo Plc. is a British based multinational company operating in many countries around the world and headquartered in UK.
The company is world’s largest producer of multiple alcoholic products such as spirits and beverages; the goods produced by the company are supplied all over the world. As stated in Diageo (2015a), the company has offices in more than 180 countries around the globe with presence in approximately all regions around the world.
The company owns many products which are among the top products in their respective product category; for example, company own Smirnoff brand which is world’s leading Vodka; it is liked by people around the globe and is consumed more than all other Vodkas.
The company has also faced numerous controversies over the years which includes ethical issues as well but the company has continued to grow and prosper in the recent times as well.
According to Diageo (2015c), the company has a dual listing which includes a primary listing on the London Stock Exchange and a secondary listing on the New York Stock Exchange. The company is a constituent of FTSE 100 index where it has a primary listing; it means that the company’s market capitalization is among the top 100 companies listed on London Stock Exchange.
It must also be noted that the Diageo’s market share has increased over the years as its share price has increased with constant number of shares outstanding.
The Company Structure
The company structure refers to two different aspects; one revolves around the organizational hierarchy and other revolves around how the operations of the company are expanded across different areas and regions around the globe.
The organizational hierarchy of Diageo is quite similar to a multinational manufacturing firm. The company is headed by the CEO and followed by the directors of different department who further deal with the senior management of the company.
Regarding the operations of the company, the operations of the company are spread across at-least 180 countries around the globe with total employees equaling 33000; this also gives a rough idea about the size of the company (Diageo, 2015b).
According to Diageo (2015b), the company has divided its 180 countries market in 21 sub-markets; 43% of the company’s total business comes from the emerging markets across the globe which include Latin America, Africa, Asia and other developing regions.
Diageo reports its revenues and profits by dividing it into five different regions; the region with highest contribution to revenue is the Asia Pacific which contributes approximately 43.5% of the total revenue of the company as per the latest annual accounts. This shows that the company has structured its revenue and profits properly.
Industry of the Diageo and its Sector in Stock Exchange
The Diageo deals in alcoholic beverages which means that the company is a part of the beverages industry. The industry is one of the top growing industries in the recent years as the demand for beverages has increased as a whole As discussed earlier, the company has a primary listing on the London Stock Exchange and a secondary Listing on the New York Stock Exchange.
The company operates in beverages industry so its sector on stock exchange is also beverages and the sub-sector on the stock exchange under the head beverages is Distillers and Vintners; the sub-category helps the users identify what kind of products the company produces (London Stock Exchange, 2015).
Competitors of Diageo Plc.
According to Corporate Watch (2005), the Diageo PLC competes on the basis of price, customer loyalty and most importantly the quality of its products and services. In spirits, the company has a direct competition with multiple companies named Pernod Ricard, Bacardi and Brown-Forman.
Each of these companies has also got multiple products under the head spirits; these products directly compete with the spirit products of Diageo Plc. These are the multinational companies that compete with the Diageo Plc.; apart from these companies, the Diageo Plc.
Also receives severe competition from the local and regional companies in the each economy and region in the Spirit category. As stated by Corporate Watch (2005), the Diageo also competes with numerous competitors in the beer products.
The beer products of Diageo compete with different companies varying on the basis of regions and areas of operations. There is no other beer company that sells products all over the globe to compete with the Diageo but there are regional companies which compete in their respective areas.
Some of those companies include Heineken in Ireland, SabMiller and Heineken in different African countries, similarly different companies in rest of the countries as well. It must be noted that the operations of SABMiller are even higher than that of the Diageo.
The Availability and Reliability of the Publicly Available Information
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