Key Challenges Faced by Adnams in the External Environment

This report discusses the key challenges faced by Adnams in their external environment, such as strict regulations, discouraging alcohol consumption, and evolving consumer tastes. It also explores the key internal factors of the business and provides strategic decisions and recommendations for Adnams' growth and development.

Table of Contents
INTRODUCTION.....................................................................................................................................3
MAIN BODY.............................................................................................................................................3
Key challenges faced by Adnams in the external environment................................................................3
Explains the key internal factor regarding the situation of the business...................................................4
Strategic Decision which can be taken by the ADNAMS to grow...........................................................5
Recommendations for Adnams’ development over the next ten years.....................................................6
CONCLUSION..........................................................................................................................................8
REFERENCES........................................................................................................................................10

INTRODUCTION
Organizational Strategy is the set of action which are taken to improve the performance and to
achieve the long term organizational goal. Adnams is a regional brewery founded in 1872 by the
founder George and Ernest Adnams. These report highlights the Key challenges which are faced
by the Adnams in their external environment. Further these report explain the key internal factor
of the Adnams. These report also contain the strategic decision which can help the business in
growing the business in global market and in the end report recommend ate the development
policy for ADNAMS.
MAIN BODY
Key challenges faced by Adnams in the external environment.
Despite the regular research and development work carried out by the R&D department of
Adnams; the recurring changes in the market always presents challenges which have to be dealt
with in the external environment. Some of the key challenges faced are: -
Strict Regulations: - Alcohol industry has always been the one which has been strictly
monitored by the government. The trade practices are not easy to carry out and the deals and the
negotiations carried out in this industry are always keenly scrutinized by the government.
Discouraging Alcohol Consumption: - People have become wiser and more educated about
how they should spend their hard earned money, especially after the recession period. The
income generated by pubs has declined. The rise in the prices of beer at Adnams has also been a
major reason for the downfall in the sales of their beer.
Evolution in Consumer’s tastes: - Over the time, there has been a change in the idea behind
relaxation. Earlier people preferred a bottle of beer after a hard day’s work. Now a day, people
have refined their tastes and a glass of wine is a more preferred source of relaxation than a beer
pint.
Preference for Drinks Containing Higher Alcohol: - People have shifted from Adnams’ low
alcohol containing beers to something stronger. Pubs have also reported increased sales of cask
ale and since it is more profitable, they have increased its supply. Though Adnams has ventured
into providing caked drinks, it has not been able to shake the image of its good old beer
company.

Increasing Health Consciousness: - Due to so many health activists and health awareness
programs being held, people now understand that beer is an extremely unhealthy drink. This has
become a major challenge for Adnams as it has reduced their sales drastically and their market
has been replaced slowly by wines and other organic drinks.
Innovative Beer packaging strategies of Competitors: - Various competitors of Adnams have
evolved their beer bottles and the raw materials used to manufacture it making it more attractive.
They have reduced the weight of the beer bottles and have replaced the glass used in
manufacturing earlier with the plastic and later Amcor used a material called Bind-Ox which
prevented the beer by blocking oxygen from reaching to it. This increased the shelf life of their
beer which further increased the competition for Adnams.
Supply Chain Management: - Adnams need to improve their mechanisms which they use in
production of beer and despite their Old Country vibes which their advertisements try to portray,
their lack of interest towards CSR Activities and refusal of proper waste treatment have created a
negative impact on its customers.
Explains the key internal factor regarding the situation of the business.
Human Resources: The main aspect of Adnams Internal business situation is there human
manpower as the employee loves to work for the company as the culture of the company helps
them to showcase their ability more proficiently as company also looks for the need and
requirement of the employee in the organization and the performance of the employee is always
interrelated with the success of the organization as the employee are the one who carries out the
business activity of the organization.
Working environment and free flow communication: Karen always try to build a good
working environment for the employee through the free flow of communication in the
organization for that Karen has also introduced a plan in the organization called ‘pods’ in that all
the manager and Karen used to sit and discuss about all the future and current policy also
sometime they use to take breakfast together which helps the employee in discussing the issue
and also helps the Karen in communicating the solution to them freely in the organization.
Efficient resources: efficient resources are the main reason of the Adnams to be successful in
the organization as Adnams in the year 2000 has invested heavily in updating their internal

resources which has proved very crucial point in the success of their business as these has helped
in reducing the wastage for the business by 90 percent which is very big thing for the
manufacturing organization and also helped the business in recycling the wastage for reusing
them in the organization.
Financial Stability: Due to the regular growth of the business and increasing profitability in the
past years, and good relationship with the stakeholder of the organization has helped the business
in establishing good financial stability in the eye of the interested party, which help the business
in gaining good goodwill in the market.
Leadership: Decision and leadership style used by Karen has proved well for the organization as
under the leadership of Karen only organization is able to make an effective change in the
organization. As the decision taken by the Karen help the organization in reducing the wastage
and improving working environment of the organization.
Mission and goal: Clarity of Goal in the organization has also helped the Adnams in gaining the
success in the market as it helps the employee in knowing what to do how to do and till when to
do to achieve the organizational goal.
Working relation and Behavior: Karen has always tried to create a good relationship with the
employee in the organization and with the client and also tried to improve the trust factor
between the employee which has affected the business in the positive way.
Strategic Decision which can be taken by the ADNAMS to grow
There are many ways through which Adnams can grow in the market after going through case
study it has been noticed that Adnams is doing well in their decision and have a good market
area coverage in the local market, Adnams should also now look to enter into global market.
Ansoff Matrix can be the best practice which can be used by the Adnams to have a better idea of
the risk associate with the global market and will also help in adapting the new market very
comfortability as it covers variety of aspect such as:
Market Penetration: These strategies will help the ADNAMS to grow their current product and
current market as these products will help them to use different marketing policy to promote
their product in their current market which will generally increase the market share of the

organization and will also help them to reach more customer and will also promote the
awareness.
Market Development: It can be the best strategy which can be used by the Adnams as it will not
cost that much to the Adnams as compare to the other two policies as in these policy does not
require the new production in these policy they just need to sell their old product into new
market which will also help them to cover wider market area. These policy as proved very
crucial for other organization in the past also these strategy is generally used by the organization
to grow in the developing countries as developing country always laid to increase in the standard
of living in the organization.
Product Development: These is the strategy in which company used to develop the product
according to the taste and preference of the customer in the new market which helps the
company in developing the product which is customer friendly which help the organization in
attracting customer toward the organization which will certainly increase the sale of the business
and will increase the profit. These strategy is sometime risky as the taste used to change rapidly
and coping up with the changing taste is sometime proves difficult for the business.
Diversification: These is the strategy in which company used to grow their business through
providing new product to the new market this strategy will help the Adnams to attract the
customer as these is the technique which will help the organization in changing the product
according to the customer. This strategy is generally used by the company who are in food and
beverage industry, as Adnams is in the Beverage industry it can help them. Domino’s success is
always relating to this strategy.
Recommendations for Adnams’ development over the next ten years
Introduction of Green management: - Adnams has already begun taking baby steps in the
direction of improving their supply chain and adopting of sustainable and environment friendly
practices. This has improved their image already and consumers are appreciating their efforts.
Introducing proper waste management mechanisms and getting involved in CSR activities would
be a positive action from the company’s management. However, they need to work more on this
and increase their value in the eyes of the customers.

Diversification: - Adnams should start diversification of its activities and try to enter new
markets with an entirely different product line. Though they have introduced a new product line
by launching their kitchen ware, it has not been much successful. The reason behind this is that
they have not focused much on its branding. They have still kept brewing beers and wine as their
core activity. But seeing the future market trends, they should seriously start considering
investing in some new markets.
Accepting Change: - Adnams should identify the changing trends in the market through a more
relevant environmental scanning and try to modify itself as per the emerging trends. To stay in
the market and compete with the competitors, it is necessary that they provide what the customer
demands. This will help them in keeping at par the brand image of Adnams within their customer
base.
Going International: - Adnams has established a great position in the European market.
However, it also has the opportunity of expanding its business overseas targeting the various
international markets. This expansion will prove to be highly profitable for Adnams in the
coming decade as it will establish the brand internationally.
Building Social Image: - Adnams is primarily known as a brewing company and through its
beer. However, with growing consciousness towards health, it is necessary that Adnams adopt
some brilliant marketing tactics in its promotional activities and also improve the product quality
by changing the ingredients with either organic ones or with other healthier options.
Pricing Benefit: - Due to increased taxations and other restrictions on the alcohol consumption
by the legislation, the prices of beer have soared lately. Adnams, through its policy of direct
contact with the manufacturer of raw material can capture the market by maintaining the prices
of its product and gain an upper hand over their competitors.
Bringing Innovations: - With continuous evolution of the technology, the process of
manufacturing the beer has been regularly modified or upgraded. Adnams should also keep itself
up to date with such modifying technology and should not hesitate in incorporating such
advancements in its manufacturing process as when required. This will improve the quality of
their product and also help in cost reduction.

CONCLUSION
After going through the various aspects presented in this report, it can be concluded that Adnams
having sufficiently established its name in the European market, has a great potential in the
international markets. At present, there are a lot of challenges which the company is facing but
by controlling both the internal as well as the external aspects concerning the business, it can
become an even better success. Lastly to conclude, the various strategic options and
recommendations which the company could adopt in order to maintain its status quo were
discussed in the report. All the relevant data needed for assessment was taken from the case
study ‘Adnams: A Living Company’, unless stated otherwise.

REFERENCES
Books and Journal
Zokaei, K. and et.al., 2016. Creating a lean and green business system: techniques for improving
profits and sustainability. Productivity Press.
Skellern, K., Markey, R. and Thornthwaite, L., 2017. Identifying attributes of sustainable
transitions for traditional regional manufacturing industry sectors–A conceptual
framework. Journal of cleaner production. 140. pp.1782-1793.
URVISH, T.G., 2016. Diffusion of brewing technology since 1900: Change and the
consumer. History of technology. 18. p.139.
Keenan, L.F., 2017. Financialisation, the brewing industry and the changing role of the pub in
Britain and Germany (Doctoral dissertation, Newcastle University).
Watson, R., Wilson, H.N. and Macdonald, E.K., 2018. Business-nonprofit engagement in
sustainability-oriented innovation: What works for whom and why?. Journal of
Business Research.
Ferguson, E., 2018. Drink London. White Lion Publishing.
Thurnell-Read, T., 2015. Beer and Belonging: Real Ale consumption, place and identity.
In Drinking Dilemmas.(pp. 61-77). Routledge.
Online
Adnams proves ale and hearty after investment.2015.[ONLINE] Available through :<
https://www.ft.com/content/4c6f19d0-0385-11df-a601-00144feabdc>