Strategic Analysis of Adnams - Case Study

ORGANISATIONAL
STRATEGTY

Table of Contents
INTRODUCTION...........................................................................................................................1
Case Study...................................................................................................................................1
Key challenges within external environment..............................................................................1
Aspects of internal business analysis..........................................................................................3
Strategic options and directions for sustaining future growth....................................................5
Recommendations for development of company in next 10 years.............................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Organisational strategy can be termed as the alignment of company's course of action and
decisions with the long term goals. This provides assistance to an entity in gaining a strategic and
competitive edge in market place (Willis and. et. al., 2017). The present report is based on
strategic analysis of Adnams which is a medium sized brewery situated within Suffolk, England
and found in the year 1872. This assignment consists of key external challenges along with
internal business analysis. Further, it comprises the discussion upon strategic directions and
options available to the respective company to attain sustainable future growth. Lastly, the
recommendations to carry out development of entity over next 10 years are given.
Case Study
The core operation of Adnams is ascertained to be brewery yet the revenues associated
with beer are constantly reducing. Looking upon this, the entity is carrying out diversification
and differentiation by strongly focussing upon narrow niche market places with a view to gain
competitive advantage (Omotayo, 2015). This is being done because this organisation can neither
compete with macro-breweries nor micro-breweries. This tends to create sustainability issues for
the company making niche market their target location.
Key challenges within external environment
The external environment of a business organisation consists of a number of factors
which need to be continuously analysed by the company in order to stay ahead of the competitors
in market place. In this regard, Adnams face a number of challenges within the external
environment that pose a threat for its existence in market place. Such challenges are described as
follows:-
Political
The government of a nation has a prominent role in deciding the manner in which
brewing industry carries out its operations. The increasing negative publicity in relation to the
“binge drink culture” within the confines of United Kingdom has led to the government taking
strict course of actions in response to social behavioural pattern (Heffernan and. et. al., 2016).
The present proposals of UK political system aim at dealing with the misuse of alcoholic content
by executing a number of punitive taxes as well as legislations. This has consequently led to a
rise in cost load upon the concerned industry as well as consumers. Further, the inflating
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accessibility of low cost alcohol within UK is closely regulated by local authorities as well as
government. Such kinds of policies provide assistance to local brewers to tackle the competition
emerging due to presence of large scale supermarket chains which have the access to carry out
sale of beer at relatively low price. All these aspects have to be taken into consideration by
Adnams.
Economic
This is one of the most crucial aspects for the brewing sector. In context of the current
scenario, it can be said that pub and beer sectors face difficulty in attaining growth. This affects
households as well companies operating within the confines of UK (De Baerdemaeker and
Bruggeman, 2015). Further, the continuous credit crunch as well as inflation put pressure upon
individuals, families and business organisations. Lesser disposable income of personnel reflect
lowered sale of alcohol within UK causing difficulties for Adnams.
Social
This is yet another crucial aspect that is taken into account by organisations constantly in
order to fulfil the needs of customers and ensure sustainability in market place for a long term. In
the present context, concern spreads over the development of “binge culture” within United
Kingdom. The society now considers it acceptable to consume huge content of alcohol
frequently. Individuals are now getting persuaded to attend social parties as well as events
wherein they drink alcohol and post this consumption, they are found to be misbehaving
(Paliokaitė and Pačėsa, 2015). This brings forward the need to bring about changes in the manner
in which advertisement as well as distribution of alcohol is being done. This has further resulted
in almost 78% of the population prevailing in UK to ask for strict regulations to avoid violence
and misconduct. This serves as a detrimental impact for companies such as Adnams as such
legislations deter people from consuming such commodities.
Technological
Unique and innovative technology is constantly taking the forefront of every industry
which comes under the confines of corporate world. The development of techniques such as
motorized transport as well as refrigeration is changing the face of brewing industry. The
technological advancements and innovations further provide companies operating in this sector
to come with new textures and flavours providing them the opportunity to persuade more
customers within UK to make a purchase. Further, such advances allow brewery organisations to
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effectively reduce their cost of production (Wang, Liu and Mingers, 2015). This happened in
case of Adnams also which saved 30% of its energy cost with the introduction of new energy
renewal technologies. However, such kinds of technologies are not just available to be adopted
by Adnams. The anticipation of any customer preference or likelihood by a rival firm ahead of
Adnams can prove to be adverse for the respective company.
Legal
It is essential for each and every organisation to comply with the laws and legislations pu
forth by legal bodies and governmental agencies. In this regard, the current legislations within
UK state that legal alcohol consumption limit for an individual before driving is fixed to be
80mg of alcohol per hundred millilitres of blood. This may cause a significant reduction in sale
of alcohol within clubs, pubs and other social venues creating difficulties for Adnams. Further,
the smoking ban in 2007 affected the pubs spread across the territory of UK having a direct
impact on the sale of beer. Such challenges have proved to cause issues for Adnams in tackling
with such legal constraints while simultaneously ensuring that sales as well as profits of
company rise by a fair margin.
Environmental
In today’s modern era, every organisation strives to undertake such measures and
processes which helps in ensuring that the company operates in the interest of environment and
society. In this regard, the C02 emissions within brewing industry have seen a significant decline
since the 90s. In this regard, Adnams is universally known as the greenest warehouse across the
globe. This organisation makes use of construction material as well as reed-covered-roof which
does not require heat and air conditioners for maintenance. This organisation has been focussing
upon utilisation of anaerobic digester plant for reduction of carbon footprints. This plant is fed
with food and the biogas and brewing waste generated are utilised as a fuel for the trucks of
company that are used for delivery of ales as well as wines (Karami, 2016). The biggest
challenge for this organisation in this regard is that if they do not continue to operate in such a
manner, they may face issues such as increased cost of production leading to minimisation of
profits for the entity.
Aspects of internal business analysis
It is essential for companies to constantly assess and evaluate the internal environment
which constantly changes owing to the fluctuations that takes place in the corporate world and
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the specific sector in which the entity operates. In this regard, it has been ascertained that the
internal environment of Adnams is soothing for personnel and they are glad and proud to be
operating as a part of this entity. For the systematic examination of all the internal aspects of the
respected company, SWOT analysis has been taken into use.
Internal Analysis with SWOT
SWOT is a strategic management tool that is used by organisations in order to perform
the actual internal analysis of the company with a view to devise effective strategies and plans
for long term attainment of goals and objectives. In this regard, SWOT of Adnams as done by
management of this entity is as follows:-
Strengths
 Strong market presence and position
within UK.
 The culture of this organisation has
been aimed at provision of high quality
offerings to customers in order to gain
maximum satisfaction from them. This
results in generation of high sales and
profits (Nankervis and. et. al., 2016).
 Adnams has acquired approval from
health conscious customer segment.
 This organisation has a strong product
portfolio with a view to capture the
attention of a large number of persons.
Weaknesses
 The shift in demographics has led to a
massive negative impact upon the
brewery sector. This is so as a large
number of persons are shifting to UK of
which some are strictly against the
consumption of alcoholic content.
 The ban that has been placed upon
drinking within the workplace and
during travelling has a large impact
upon the sale of beer.
Opportunities
 Adnams stands the opportunity to gain
access into non-alcoholic market place
for such people who do not possess
likelihood towards the consumption of
drinks with alcoholic content.
Threats
 The gradual rise in quantum of health
conscious persons across the world has
led to strict regulations being imposed
upon this sector with regards to
consumption of alcohol.
 Adnams face immense competition
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 Further, this company can gain access
into unexplored locations so as to
enhance its existing market share and
position.
from strong and market dominating
players such as Tuborg and Kingfisher
(Aldea and. et. al., 2015).
 An irregular increase in tax may also
serve as a threat for Adnams.
Strategic options and directions for sustaining future growth
There are a number of strategic options available to a company in order to achieve
growth and success in market place. Such strategic directions that are available to Adnams are as
follows:-
Market Penetration: This is a strategy which focuses upon provision of current offerings
in existing market places. In reference to Adnams, this company can reach untouched customers
by making use of this strategy, thereby building a loyal customer base and enhancing the existing
share in market.
Market expansion: This is a growth strategy that is focussed on provision of current
offerings in new geographical locations. This helps in enhancing the base of customers for
company by gaining access into a new market place. In relation to Adnams, company can easily
increase its market share as well as positioning by making use of this strategy.
Product expansion: In this strategy, company focuses on offering new product in
existing market. In context to Adnams, it can be said that if this company will acquire this
strategy they develop a new product on the basis of customer demands. This will help in
grabbing attention of customers and maximising its profits (Cacciolatti and Lee, 2016).
Diversification: This is a strategy that lays focus upon provision of new offerings in new
markets. The chances of failure and success are found to be equal here. Thus, this is very risky,
however if it gains success the company's position in market as well as its profits gets inflated by
a fair margin.
Recommendations for development of company in next 10 years
On the basis of above analysis of Ansoff Matrix strategies, it is recommended that
Adnams should adopt market expansion as the growth strategy. This is so because this will help
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the organisation to enhance its share in brewing market and consequently the profits also. With
this, the entity will successfully be able to carry out its development within the next 10 years.
CONCLUSION
It can be concluded that organisational strategy assists a company to attain its goals and
objectives within the stipulated course of time. The PESTLE analysis has revealed that there are
a number of regulations that surround the brewing industry owing to which the entity should
undertake essential measures. Further, it has been analysed with SWOT that the entity has a
strong presence within domestic market place.
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REFERENCES
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and firm performance: The moderating role of market orientation, marketing strategy
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planning on managers’ creation of budgetary slack: The mediating role of autonomous
motivation and affective organisational commitment. Management Accounting
Research.29. pp.1-12.
Heffernan, M., and. et. al., 2016. Exploring the HRM-performance relationship: the role of
creativity climate and strategy. Employee Relations.38(3). pp.438-462.
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Management: A Review of Literature. Library Philosophy and Practice.1(2015). pp.1-
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Wang, W., Liu, W. and Mingers, J., 2015. A systemic method for organisational stakeholder
identification and analysis using Soft Systems Methodology (SSM). European Journal
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Willis, C., and. et. al., 2017. Guidance for organisational strategy on knowledge to action from
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REFERENCES
Books and Journals
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