Strategic Report: Analyzing Old Monk's Entry into the UK Market

This report provides a comprehensive analysis of Old Monk's potential entry into the UK market. It begins with a situation analysis, covering company strengths, weaknesses, market dynamics, and the competitive landscape, focusing on key players like Captain Morgan and Bacardi. A SWOT analysis identifies internal strengths like customer loyalty and low cost, and external opportunities such as the growing Indian migrant and student population in the UK. The report also addresses threats, including intense competition and the need for effective marketing. It outlines international and market objectives, target market segmentation, and branding strategies. The promotion strategy emphasizes digital advertising to mitigate competitive pressures. The report also includes a formal project plan for implementation and appendices detailing cost and competitive structures. Desklib provides access to similar solved assignments and study resources for students.

Old Monk in England 1
Name of the student:
Name of the institution:
Roll No:
Date of Submission:

Old Monk in England 2
Table of Contents
1.0 Introduction..........................................................................................................................4
2.0 Research Methodology...................................................................................................4
3.0 Situation Analysis................................................................................................................4
3.1. Company Analysis..........................................................................................................4
3.2 Organization’s Assets and Skills......................................................................................4
3.3. Market Analysis..............................................................................................................5
3.3.1 Business and Environment Analysis.........................................................................5
3.3.1.1 Political/Legal/Institutional Environments........................................................5
3.3.1.2 Regulatory Environment....................................................................................5
3.3.1.3. Social and Cultural Environment......................................................................6
3.3.1.4. Demographic Environment...............................................................................6
3.3.1.5. Technological Environment..............................................................................6
3.3.1.6. Natural Environment.........................................................................................6
3.3.1.7. Physical Environment......................................................................................7
3.3.2. Nature of Demand....................................................................................................7
3.3.3. Size and Extent of the Demand................................................................................7
3.3.5. Structure of Industry................................................................................................7
3.4 Competitor Analysis.........................................................................................................8
4.1 Internal Company Strengths and Weaknesses.................................................................8
4.3 Implications of SWOT Analysis......................................................................................9

Old Monk in England 3
5.1. International Objectives................................................................................................10
5.2 Market Objectives..........................................................................................................10
6.1. Target Markets Identification and Segmentation strategy............................................10
7.1. Product/Service and Branding Strategy........................................................................11
7.4 Promotion Strategy.........................................................................................................12
8.0 Planning Budget.................................................................................................................12
8.1 Planning Assumptions....................................................................................................12
8.3 Forecast profitability......................................................................................................12
9.1 Formal Project Plan for Implementation of Recommendations.....................................13
10 Bibliography........................................................................................................................14
11.0 Appendices.......................................................................................................................17
11.1 Situation Analysis........................................................................................................17
11.2 SWOT Analysis...........................................................................................................18
11.3 Cost Structure...............................................................................................................19
11.4 Competitive Structure..................................................................................................20

Old Monk in England 4
1.0 Introduction
Old Monk is one of the most iconic brands in India. Started in 1954, it is a firm that
specializes in Dark Rum. It has an alcohol content of 42.8% and is produced in Ghaziabad in
Uttar Pradesh. Old Monk has been one of the most established rum brands in the country, and
is sold by retailers all over the world (Hoover, 2016). The company’s primary target are
Indian consumers, and those who wish to have alcohol, but are not willing to shell out the
money for expensive liquor. The primary entry strategy would be through bars and pubs, and
local distributors in the UK. The primary target audience in the UK would be Indians,
students and those who might not be able to afford expensive alcohol.
2.0 Research Methodology
The main research methodology that will be used will be a situation analysis and a SWOT
analysis as well.
3.0 Situation Analysis
3.1. Company Analysis
Old Monk is one of the most recognized brands in India. Started in 1954, it is one of the most
recognized Indian-Made Foreign Liquor Brands in the country. The company is estimated to
be worth over US $240 million (Kong & Chen, 2018). The company does not believe in
advertising, but instead in word of mouth spreading of the name of the brand. Thus, it is one
of the only alcohol brands that believes in the loyalty of the customers.
3.2 Organization’s Assets and Skills
The organization’s main asset is the loyalty that the customers have towards the company. By
gaining customer loyalty, they have ensured that they do not need to spend the money on
advertising, but can rather come up with better products (Koos, 2011). The main skill and
asset is the product itself, which has been known to be extremely inexpensive.

Old Monk in England 5
3.3. Market Analysis
The current market in the UK for foreign alcohol is quite large. Old Monk is one of the few
companies that is known to almost every Indian. The UK also has a large foreign migrant
population, which is why Old Monk can have a very large potential market of customers
(Aggarwal & Kumar, 2012). There are not many cheap alcohol brands that are available in
the country, which is why this is a large part of the organization as well.
3.3.1 Business and Environment Analysis
The Business Environment in the country is versatile. Due to Brexit, the UK government has
decided to set up rules and guidelines that make it easier for foreign private companies
operating in the country. This has been found to be extremely beneficial, as it would open up
the country for Old Monk (Arora, 2106).
3.3.1.1 Political/Legal/Institutional Environments
The Political, legal and institutional environments allow the organization to succeed in the
country (Aw & Lee, 2017). There are no laws regarding the setting up of distilleries by
foreign private companies in the country. There are no legal or institutional hoops to jump
over for the company.
3.3.1.2 Regulatory Environment
There is a strict regulation of the alcohol that is served in the country. The regulation to serve
alcohol requires licensing by the local regulatory body. There is no particular department that
deals with alcohol and sprits in the country (Guivarch & Hallegatte, 2013). However, due to
alcohol overuse and abuse, these regulations can increase in the future, and they can become
very strict.

Old Monk in England 6
3.3.1.3. Social and Cultural Environment
Drinking alcohol has been socially favourable in the country for a long time. One of the
leading trends in the society in the UK is social drinking (Casico, 2017). Thus, the social
environment and the cultural environment is beneficial to the organization in terms of the
trends in the country.
3.3.1.4. Demographic Environment
The main demographic would be Indians who are living in the UK, other migrants who prefer
cheap alcohol, and students. The number of Indians living in the UK are about 1.4 million
people, and the number of students factor in at over 2.28 million students. This makes for a
very large market in the country as well.
3.3.1.5. Technological Environment
The UK has the latest technology that is available. This would include the distillery
equipment that is needed for the organization to survive as well. Since the UK has been a hub
for many distillery brands, Old Monk should have no issues in finding the equipment that is
necessary for them to start in the country (Aharoni & Grinstein, 2017). The technological
environment would suit the start of a distillery in the country.
3.3.1.6. Natural Environment
The natural environment of UK is a cold. It is often snowing and unusually cold or raining in
the country, which is of immense benefit for Old Monk, since it is able to support drinking as
well. In most cold countries such as the UK and Russia, it is normal to drink alcohol in order
to keep warm, so that they can survive in the cold weather as well (Ambrose, Diop &
Yoshiba, 2014). This is extremely important, as rum has been known to warm the body down
to a large extent.

Old Monk in England 7
3.3.1.7. Physical Environment
There is enough infrastructure in the country to be able to support the brand. In most villages,
or on the outskirts of the city, Old Monk will be able to ensure that they are able to efficiently
have the infrastructure to have a large distillery.
3.3.2. Nature of Demand
Alcohol is in immense demand in the country, and the presence of students, and immigrants,
who might not have the pockets to afford expensive alcohol means that the demand for Old
Monk might only increase over time as well.
3.3.3. Size and Extent of the Demand
As mentioned earlier, the size and extent of the demand for Old Monk alcohol is only bound
to increase, since it is one of the cheapest forms of alcohol that is available to the general
public (Ali, Metz & Kulik, 2015).
3.3.4. Product Category Stage of Product Life Cycle
The product is in the introduction stage of the product life cycle, since it has only been
introduced in the country. There are 4 main stages of the product life cycle, which include
Introduction, Growth, Maturity and Decline. Since the product has not even been introduced
officially in the market, it is still in the Introduction stage of the product life cycle as well.
3.3.5. Structure of Industry
The structure of the alcohol industry has been provided in Appendix 11.3. The alcohol
industry structure in the UK is the same.
3.3.5.1 Cost Structure of the Industry
The cost structure of the alcohol industry is given in Appendix 11.5. The cost structure for
rum industry follows the same structure.
3.3.5.2 Competitive Structure of Industry

Old Monk in England 8
The alcohol industry is extremely competitive. Appendix 11.4 shows the major brands of
alcohol that are served in the UK. The revenues show how competitive the market is as well.
3.4 Competitor Analysis
The main competition to Old Monk in the UK would be Captain Morgan and Bacardi as well.
Thus, they are ones that have the most revenues from the rum that is sold in the UK as well.
More than 47% of the population that drinks rum has been known to drink Bacardi rum, and
more than 43% has been known to drink Captain Morgan. Thus, these two brands have most
of the rum market almost cornered. They have an immense market share, and the reason for
this is the advertisement that they have on a regular basis as well. Thus, it is extremely
important for the market to ensure that the organization is capable of reclaiming the market
share in the organization.
4.0 SWOT Analysis
4.1 Internal Company Strengths and Weaknesses
The Internal Strengths and weakness would include the death of the owner. Kapil Mohan,
who had been the head of the organization, died in 2018. This would create a large amount of
chaos for the organization, and could lead to the creation of many issues for the organization
as well (McAdam, 2006). The other weakness would be the lack pf advertisement. Old Monk
is one of the biggest and most well-known brands in India, and this can have an immense
impact on the organization as well (Tales of an Old Monk, 2018). The profits of the
organization have been tied to the product, but in the UK, there might not be many
organizations or individuals that have heard of the brand, which could lead to decreased
profits as well. It is also dependent on the product itself. The organization prides itself on
being one of the cheapest brands of alcohol in the country, which is why it is essentially one
of the biggest strengths of the organization as well.
4.2 External Market Opportunities and Threats

Old Monk in England 9
The main threat is the two main competitors to the market, which include Captain Morgan
and Bacardi. They have most of the market covered, which means that it would be extremely
difficult for the organization to have a share of the market. This coupled with the fact that the
organization does not advertise the products would be the difference between ensuring that
the company succeeds or fails. However, most of the people in the country are extremely
loyal, and Old Monk has often depended on customer loyalty (Yangy, 2010). It is because of
the customer loyalty that the company has reached where it has reached. Another opportunity
that is in the hands is the increasing number of Indian migrants and students in the country.
Due to globalisation, there has been a huge amount of immigration, and due to Brexit, there
are many people in the country who would have to downsize on the amount of money that
they spend on alcohol ( Lukianova, 2014). This would mean that they would prefer to have an
alcohol that is not extremely expensive, which is of immense benefit to the organization as
well.
4.3 Implications of SWOT Analysis
The SWOT Analysis implies that the organization should consider advertising in the country
as well. Old Monk might have been the biggest alcohol brand in India, but it is not able to
capture the international market as well it should because of the effect of their advertising and
marketing strategies. If the organization does not wish to spend on direct advertisement, they
can spend on digital advertising, which is of immense benefits to many brands. By investing
in digital advertising, the brand might be able to successfully mitigate the effects of the
competition (Canetli, et al., 2017). The biggest strength for the brand however, is the cheap
cost. They should be able to maintain these costs in UK as well. This should be a strength that
might be the tipping point in the success of the brand. By ensuring that the alcohol stays
cheap and affordable, they are able to target a larger amount of people as well.
5.0 Objectives

Old Monk in England 10
5.1. International Objectives
The main international objective should be to make sure that the organization is able to offer
the standard that is has offered in India, and also keep in line with their internal values as
well. They should be able to keep the price of the alcohol down, and should be able to
provide a quality that is in line with the international standards as well (Minichilli, Zattoni,
Nielsen., & Huse, 2011).
5.2 Market Objectives
The should be able to capture at least 10% of the market within the first year of introduction.
It would be hard to capture more than 45% of the market in the first 5 years of their launch,
however, this must be one of the main strategies that the organization should have in ensuring
that they are capable of operating in the country (Lucarelli, 2018).
6.0 Recommended Marketing Strategy
6.1. Target Markets Identification and Segmentation strategy
The target market, as mentioned earlier would be immigrants, especially those of Indian
origin and students. Thus, the segmentation would be based on two main factors, cost and
nostalgia. Cost is one of the major factors, which means that the brand would have to market
itself as being affordable to not just the middle class, but also to the working class as well. It
is important to keep this marketing strategy in mind, since the target market could change as
the immigration and student laws in the country change (Liu & Shi, 2015). Thus, it would be
also essential to ensure that they are able to target the citizens of the country, so that they can
effectively have the market share (Ryan & Mizerski, 2010).
6.2. Market Positioning
The main market position that Old Monk should take would be the price. By marketing itself
as one of the cheapest brands of alcohol on the market, it is able to successfully be different

Old Monk in England 11
from the other brands as well. Thus, by having this as the major position, it would be
extremely different from the other brands as well (Singh, 2018).
6.3. Market Entry Strategy
The market entry strategy that is adopted by the organization would be by licensing and
franchising. By licensing the brand and allowing pubs and bars to have the license to sell
their products, they would be able to successfully capture a larger market than before. This
would mean that the organization would be able to effectively capture a larger segment of the
population as well (Czinkota, Ronkainen, & Sutton-Brady, 2018). The organization would
also be able to franchise to stores that would require there to be a franchising. This would
mean that the organization is able to successful capture those who are not capable of going to
the pubs and bars due to the cost, but buy their liquor from stores as well.
7.0 Marketing Mix Strategy and Tactics
7.1. Product/Service and Branding Strategy
The brand would market the product under Old Monk, which is the name of the company. It
would be branded as alcohol, or specifically as Dark Rum (Sokolinskiy, Sopranzetti, Rogers.,
& Leuschner 2018). The main long-term goal that can be achieved with the brand would be
the inclusion of the brand in one of the top alcohol brands in the UK. This would mean that
they have been successfully able to capture the market there (Gupta, Rodirgues & Mathew,
2018).
7.2. Place or Distribution Strategy
The distribution would be through bars and pubs, and through local liquor stores as well. This
would ensure that the product is given everywhere.
7.3. Price Strategy Structure

Old Monk in England 12
The price would be in terms of pounds. The 0 ml, 180 ml, 375 ml, 500ml, 750 ml, and 1 litre
bottles, would be sold for £5, £10, £15 etc. The larger 1 litre bottle would be sold for £15
pounds as well.
7.4 Promotion Strategy
The promotion would be through word of mouth, which is why it is essential for the
organization to promote the brand through the method that is given effectively (Huslid &
Becker, 2010).
8.0 Planning Budget
8.1 Planning Assumptions
The main assumption would be that the students and Indians, drawn by the affordable rates
and nostalgia would buy the product as well.
8.2. Forecast Sales and Cost
The expected sales in the first quarter would be around £10 million pounds. The cost should
be around £2.5 million pounds.
8.3 Forecast profitability
The profit that the company has would be £5 million pounds. This would mean that the
organization is would have an expected profit of 50%.
8.4 Sensitivity Analysis
The sensitive areas would have to be the areas that are regarding the sales, and the
advertisement.
9.0 Implementation and Control