Mariah Cater Situation Analysis Scenario 3

Transcription

1 Situation Analysis Scenario 3

2 History In 1765, Irish aristocrat Richard Hennessy founded an eaux-de-vie trading business in Cognac. Jas. Hennessy & Company merged with Moët et Chandon in The new company, called Moët-Hennessy, enjoyed a broader financial base and was better able to stimulate the growth of its interests abroad. In June 1987 a $4 billion merger was effected between Louis Vuitton with Moët-Hennessy. These expansions were brought on by Richard Hennessy s son, James, and has interlinked the name of Hennessy with the history of cognac ever since. In 2011, Hennessy was a symbol of show, not substance. The brand had built up during the boom of the 2000 s but as the market changed and consumers aspirations evolved, Hennessy failed to keep up. This resulted in a 5% decline in the brands core business, Hennessy VS, for three straight years. The value of potential is one engrained in the Hennessy brand from selecting the perfect soil, to picking the perfect grape, to shaping oak barrels by hand, Hennessy runs on the incessant boundless pursuit of excellence. In 2012, the Hennessy brand was relaunched with Never Stop. Never Settle. and redefined success as the continuous quest to become greater. A powerful metaphor was comprised for the inner drive of a person the never ending chase, a dark mysterious creature, The Wild Rabbit. It conquered corners, billboards, bars and clubs in the city that epitomizes the Never Stop. Never Settle. ethos. Hennessy launched its first national television spot in four years and created an immersive online journey down a bottomless rabbit hole to discover what inspires their icons. The wild rabbit messaging created relevance with a new young target who were inspired to identify and share their own Wild Rabbits. The campaign referred to Hennessy s sales Situation Analysis 2

3 decline and drove growth of 5.3%. It exceeded the sales target and surpassed goals by 55%. So within the year of this marketing campaign, Hennessy become the fastest growing non-vodka spirit in the U.S. Today, Hennessy is the uncontested leader in cognac, selling 50 million bottles a year around the world. Its V.S, V.S.O.P, Privilège, X.O, Paradis and Richard Hennessy are the pillars in a range of products that are both benchmarks of excellence in the world of cognacs and icons of refinement and luxury. This success is far from simply fortuitous, reflecting an unyielding focus on quality. The talents of seven generations of cellarmasters from the Fillioux family have enabled Hennessy to constitute the most remarkable reserves of rare eaux-de-vie in the world. The excellence of the product inspires an astonishing variety of ways to enjoy it, in a traditional snifter, on ice, in long drinks or in cocktails. Made from grapes, cognac goes perfectly with fruit, spices and other liquors, providing an ideal base for innovative and delicious cocktail creations. In addition to the fabulous commercial success of a brand renowned on every continent, Hennessy cognac plays a unique role as ambassador of French art de vivre the world. Situation Analysis 3

4 S.W.O.T. Analysis Strengths Diversified business in terms of business segments and geographic presence Weaknesses High level of debt Strong financial performance Opportunities Expansion into untapped markets Threats Intense competition Increasing labor cost in the US and Europe Situation Analysis 4

5 Competition Rémy Cointreau Rémy Cointreau is engaged in production and distribution of wines and spirits. Its brand portfolio includes Rémy Martin and Louis XIII, Cointreau, Passoa, St Remy, Mount Gay, Metaxa, Izarra, and Ponche Kuba. The group operates in the Americas, Europe, Middle East, Africa and Asia. It is headquartered in Cognac, France and employed 1,560 people as of March 31, The group recorded revenues of E1,026.1 million ($1,414.4 million) in the financial year ended March 2012 (FY2012), an increase of 13% over FY2011. The operating profit of the group was E204.7 million ($282.2 million) in FY2012, an increase of 69.9% over FY2011. The net profit was E110.8 million ($152.7 million) in FY2012, an increase of 57.2% over FY2011. Strengths Strong distribution network Strong brand portfolio Weaknesses Declining cash flow from operations Unfunded employee post-retirement benefits Opportunities Shift in consumer preferences Growing European spirits market Threats Increasing competition Advertising regulations Trade of counterfeit alcohol Situation Analysis 5

6 Competition Bacardi Bacardi produces and markets a wide range of spirits and wines. It operates in the Americas, Europe and Asia. It is headquartered in Hamilton, Bermuda and employs nearly 6,000 people. Bacardi is a privately-held company and does not publish its financial results. Strengths Strong brand portfolio Weaknesses Ownership status of the company Strong global presence Opportunities Positive outlook for global spirits market Threats Intense competition Situation Analysis 6

7 Current Consumer Analysis Demographics Ethnicity: African - American & HIspanic Gender: Male Age: Education: High School Diploma or greater Occupation: Varies; majority in the field of arts or business Average Income: $23.5K - $54K Marital Status: Never Married Regional Location: North East Technographics Driven to find full potential in oneself Artistic Independent Self starter Innovative Hard working

8 Proposed Consumer Segment Demographics Ethnicity: Caucasian Gender: Women Age: Education: High School Diploma or greater Occupation: Arts, Sales, Office, Business, Entrepreneur Average Income: $40K - $52K Marital Status: Never Married Current Population: Regional Location: North East

9 Proposed Consumer Segment Technographics Women in the Caucasian demographic would be good as a new consumer segment for Hennessy because they are consumers, just not at a high percentage rate as that of the African - American and Hispanic males. On average, about 39.4% of women consume Hennessy and about 40.7% are Caucasian. The need for this product isn t a necessity but more so for pleasure after a hard work day, a special occasion, or just for an evening of relaxing by yourself or with a significant other. This consumer segment doesn t work the typical 9-5 but makes their own work hours, than can range from day to night, weekends to weekdays. She is constantly on the go and usually only has time to whine down during the evening. Enjoys going to art shows and exploring different adventures in the city in which she resides. Stays up to date on current events and enjoys being on the scene in the entertainment world. Hennessy is a perfect fit for the Caucasian woman because she shares similar characteristics as the current target segment. Instead of looking past them, Hennessy should look to them for ways to engage and interact with them so that they can help boost and increase sales. Hennessy is apart of LVMH, Louis Vuitton Moët Hennessy, they have a relationship of collaborating with some of the top luxury brands in order to reach the consumer segment like no other cognac has been able to do.

10 Bibliography a "Remy Cointreau - SWOT, Strategy and Corporate Finance Report." Reportlinker. ( June 21, 2013): LexisNexis Academic. Web. Date Accessed: 2013/10/10. "LVMH Moet Hennessy Louis Vuitton SA - SWOT, Strategy and Corporate Finance Report." Reportlinker. ( August 26, 2013): LexisNexis Academic. Web. Date Accessed: 2013/10/010. "LVMH Moet Hennessy Louis Vuitton SA SWOT Analysis." LVMH Moet Hennessy Louis Vuitton SA SWOT Analysis(2013): 1-8. Business Source Complete. Web. 1 Nov "Bacardi Limited SWOT Analysis." Bacardi Limited SWOT Analysis (2013): 1-6. Business Source Complete. Web. 1 Nov "Remy Cointreau SWOT Analysis." Remy Cointreau SWOT Analysis (2013): 1-8. Business Source Complete. Web. 1 Nov