The macro-environment of the UK brewing industry are the major external and uncontrollable factors that influence its operating organization’s decision making, as well as its performance and strategies. To identify and assess its key factors, using the PESTLE framework will provide a comprehensive list of influences and key drivers in six main categories, which are: political, economic, social, technological, legal, and environmental. This method allows businesses to consider and explore how their external environment might change so that they are prepared if things should change.
PESTLE analysis of the UK Brewing Industry
Political
Changes and reforms of Licensing Laws in line with Government policy
Relaxation of opening hours and late night opening
National minimum wage increase affecting salaries and wages
EU influence and legislation regarding measures of drinks
EU and National Government guidelines regarding health
Local and National Government concerns regarding negative aspects of ‘binge drinking’
Budget increases in duty on alcohol
Government plan to increase taxes equating to around £8million
Increased duty on beer to 9% and inflation by 2%
Economical
National and international economic downturn means people generally have less disposable income for socialising
Rise in staff wages due to National Insurance and Minimum Wage increases
Cut price offers for alcohol in supermarket promotions
Increases in transport costs in line with Fuel pricing
Steadily falling employment
Pubs create 18 jobs per pint than the supermarkets who only create 3
Rising costs of energy, food tax and employment
Social
Culturally pubs are the centre of social life, place to meet friends and for locals to socialise
Easily accessible as pubs are generally situated close to Town Centres or on main routes
Localised venue known for gigs, live music, themed nights for younger consumers
Demographically increased local student population
Media concern with negative aspects of ‘binge drinking’
Increased awareness of health concerns
Increased advertising on mainstream media of consuming alcohol responsibly
Wider choice and taste of alcoholic drinks in supermarkets for consumers
Technological
Developments in delivery of cold beers and chilled ale
Development of wide range of flavoured alcoholic drinks
Local interest in nightlife promoted via multi-media, websites, blogs and social networking
Advertisements for alcohol awareness and responsible drinking on mainstream media
Increased advertisement for alcohol brands via multi media
Legal
Smoking Ban
Stronger enforcement of underage drinking regulations on local and national level
Changes in Drink Driving Laws
EU legislation on measures of drinks served
Environmental
Recycling
Waste, litter, refuse produced in local area
Transportation and delivery costs of goods
The Macroeconomic Environment??
Key Drivers
The Changing Nature of the Competitive Environment
Present a Five Forces analysis of the competitive environment of the UK beer industry and discuss the changing nature and effect of these forces (30 marks)
The brewery industry is highly competitive and highly saturated business. There are a number of forces at work here all of which can provide an insight into how appealing the brewery industry is, in terms of whether it is the type of industry to enter or leave; if there is room to exert any type of influence and how the competitors within this industry affect its performance (Johnson,2009). To help provide an analysis of the brewery industry and develop a business strategy, using Michael E. Porters Five Forces Model will determine its competitive intensity or attractiveness of a market.
Porter’s Five Forces Analysis for the UK Brewery Industry
***NOTES FROM WORKSHOP: The industry is unattractive and unprofitable, the forces reduce the profits the firm can make…it’s getting worse
The Strategic Directions of Adnams
Against the background of a declining industry, the brewer and pub operator Adnams seem to be bucking the trends. Assess the strategic directions chosen by Adnams that have aided their progress. (40 marks)
Adnams is a British brewery founded in 1890 in Southwold, Suffolk. In 2008 in spite of the economic downturn, Adnams began to make changes in how the brewery process operates to reduce its impact on the environment. In doing so Adnams decided to work more closely with local farmers and producers who supply their breweries and hotels; in addition to this through a partnership with a local business Adnams installed an anaerobic digestion plant to turn brewery and food waste into biogas, which has been a huge success.
CONCLUSION
Table of Appendices
Meeting Logs
Meeting Title:
Strategic Management Assignment
Date:
22ndFebruary 2011
Time:
12:00
Location:
Kingston Hill Campus (Library Resource Centre)
Meeting No.
1
Attendees:
Alfred Okanlawon, Andrina Beau-Pierre, Damian Brooks, Rosetta Azah-Thomas, Jermaine Randolph
Topics:
Familiarize ourselves with one another and exchange contact details
Ensure everyone has a copy of the case study
Skim over the case study and brainstorm possible routes for questions 1, 2 and 3
Next meeting date: 1stMarch 2011
By the next meeting everyone should have read and understood the case study fully, and made bullet points for each question.
Meeting Title:
Strategic Management Assignment
Date:
1stMarch 2011
Time:
12:00
Location:
Kingston Hill Campus (Library Resource Centre)
Meeting No.
2
Attendees:
Alfred Okanlawon, Andrina Beau-Pierre, Damian Brooks, Rosetta Azah-Thomas, Jermaine Randolph
Topics:
Gather all the notes made for each question
Decide who will do which question
Next meeting date: 8thMarch 2011
By the next meeting everyone should have made a start on their assigned question so that everyone can read over it and offer suggestions
Meeting Title:
Strategic Management Assignment
Date:
17thMarch 2011
Time:
14:00
Location:
Kingston Hill Campus (Mid Level)
Meeting No.
3
Attendees:
Alfred Okanlawon, Andrina Beau-Pierre, Damian Brooks, Rosetta Azah-Thomas, Jermaine Randolph
Topics:
Combined the work that everyone has done so far individually for each question
Whatever is left to do everyone should do, and we will bring it together for the next meeting
Next meeting date: 22ndMarch 2011
By the next meeting all the questions will be answered by everyone and put together collectively and everyone will read the assignment and take notes on which sections they feel are irrelevant so that it will be cut down to make relevant together so that everyone is happy with its content
Meeting Title:
Strategic Management Assignment
Date:
22ndMarch 2011
Time:
11:00
Location:
Kingston Hill Campus ()
Meeting No.
Attendees:
Alfred Okanlawon, Andrina Beau-Pierre, Damian Brooks, Rosetta Azah-Thomas, Jermaine Randolph
Topics:
To discuss why sections of the assignment are irrelevant
To take out sections that everyone agrees are irrelevant
Next meeting date:
Meeting Title:
Strategic Management Assignment
Date:
24ndMarch 2011
Time:
13:00
Location:
Kingston Hill Campus ()
Meeting No.
Attendees:
Alfred Okanlawon, Andrina Beau-Pierre, Damian Brooks, Rosetta Azah-Thomas, Jermaine Randolph
Topics:
To write up the introduction (preface) and conclusion as a group
Hand in the assignment
Next meeting date:
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