Guinness Industry

Introducton

We will apply Porter’s Five Forces to analyse the nature of the competitive enviroment of an irish company we have chosen – Guinness and Co. In 1759, Arthur Guinness signed a 9000 – year lease for the St. James’s Gate Brewery, Dublin at an annual rate of £45. Ten years later, despite competition from imported English beers, Arthur began to export his berr to England. By 1888 the Guinness Brewery was the largest in the world producing over 1.2 million barrels a year. Guinness is the biggest selling stout in the world. 10 million pints of Guinness is drank daily worldwide. Brewed in 50 countries and sold in 150 countries worldwide. Guinness and Co makes €2 billion annually.

The rivalry of existing competitors

Traditionally there has been intense competitive rivalry between irish beer companys in Ireland and internationally. This is mainly due to price competition and advertising campaigns. Stout brewed by Guinness and smaller irish brewers Murphy’s and Bleamish once dominated beer consumption in Ireland, with lager and ale having much smaller shares. However, lager subsequently became Irelands favorite beer stlye. 63% of beer sold in Ireland is lager. stout makes up 32% of the market, with Ale the remaining 5%. It is estimated that Guinness alone makes up 30% of the irish beer market. On average half of all pints consumed in Ireland every day is a pint Guinness. However Guinness faces tough competition from lager and ale manufacturers abroad. The current competitors in Great Britain are Carling, Fosters ans Stella Artois who rank in the top three, while Guinness stout ranks lowest, with the lowest market share and the lowest value. The total Great Britain beer sales rank stout as lowest with 6.6% market share overall compared with standard lager with a top market share of 34.4%. Overall, there remains aggresive competitive rivalry within the alcohol sector in both Ireland and abroad.

The treat of substitutes

Organisations compete not only with...