Y-B METALO_Team_Thompson Strategic Recommendation2016IBS

THOMPSON’S STRATEGIC REVIEW AND

RECOMMENDATION Camille PROLA – Yves-José RAGOT – Marion TREMOUILLOUX – Susene KIRILY – Juliette PIALAT

– Yves-Bernard METALO

14 DÉCEMBRE 2015 INSEEC BUSINESS SCHOOL PARIS

Strategic Marketing – Gabor Nagy

Camille PROLA – Yves-José RAGOT – Marion TREMOUILLOUX – Susene KIRILY – Juliette PIALAT – Yves-José RAGOT - Yves-Bernard METALO

EXECUTIVE SUMMARY Thompsons’s Current Business Model ...................................................................................................................................................................... 2

Market and Situation Analysis .................................................................................................................................................................................. 3

PESTEL ....................................................................................................................................................................................................................... 3

Global spirit industry: market shares % and BCG ............................................................................................................................................... 4

Key spirit markets: 2019 forecasted market value and BCG ........................................................................................................................... 5

Global Spirit industry 5 Forces. .............................................................................................................................................................................. 6

Spirit market category segmentation in 2015 .................................................................................................................................................... 7

Point of difference vs competitors. ...................................................................................................................................................................... 8

SWOT synthesis. ....................................................................................................................................................................................................... 9

Market Segmentation and Customer Analysis .................................................................................................................................................... 10

Customer Analysis. ............................................................................................................................................................................................... 10

Target Market........................................................................................................................................................................................................ 11

Objectives and goals .............................................................................................................................................................................................. 14

5 Corners Business Strategy. ................................................................................................................................................................................ 14

New Product & Market Strategy: Next 3 years. ............................................................................................................................................... 15

BIBLIOGRAPHY .......................................................................................................................................................................................................... 16


Thompsons’s Current Business Model


Market and Situation Analysis

PESTEL


Global spirit industry: market shares % and BCG

On a Global scale, the spirit business is experiencing a maturity of consumption levels: steady growth of 3% in the last 5 years; Forward looking, it is expected

to grow at a 4% CAGR and reach $ 394bn market value by 2019.

Americas and Europe are very mature, thus explaining their position. Germany, accounting for the biggest part to the region’s performance, has actually

explained the region’s weak performance. There is a progressive shift towards less alcoholic constituted products. The European spirits market is fragmented,

with the top three players holding just 22.8% of the total market by volume. • Therefore, the new challenge is to shift the focus to emerging economies (China, Mexico, Brazil, Nigeria, South Africa) which are experiencing

an average of 7% growth in the same time period. In that case, China and India are boosting their industry area. • The Americas, which includes North and South America, have had a 2% growth from 2010-2014. USA is leading the pack with a 87% market

share. • In the same period, Europe has experienced a 1, 8% CAGR.

The main markets remain: France with a share of 14%, UK 17%, Germany 20% and a staggering « other » that accounts 36% of the European market overall.

• Asia-Pacific is the most promising market, which is already catching up with other regions. With China holding a 48% market share and India 23% with growths exceeding the 5%.

• Middle-East and North Africa is the unpenetrable market due to its socio-religious stance, thus explaining the 1% market value.

GROWTH

SHARE

1

%

Asia-Pacific

34%

Europe

35%

Americas

31%

Middle East &

Africa


Key spirit markets: 2019 forecasted market value and BCG

• The USA is expecting a 1,8% market growth by 2019. the UK, and Germany are facing similar destinies with a 1,6% and 1,1% expected

growth.

• Surprisingly enough, France is raising the bar at 2,6%.

• But those numbers are still relating to what is considered as a stable market.

• On the other side, India and China are expected to grow CAGR 4,6% and 5,3% respectively in the same time frame. The two reunited,

will count for almost the same size as all four other countries. This represent a significant jump in about 20 years only. The emergence of

the middle and upper-class being the main driver.

GROWTH

SHARE

India

$ 32bn

Germany

$ 24bn

France

$ 17bn

USA

$ 75bn UK

$ 12bn


Global Spirit industry 5 Forces.

The global spirits market is fairly fragmented, with the top three players holding 15.3% of the total market volume.

On overall, competitive rivalry is HIGH. There is numerous manufacturers in the market, as well as specialty sellers, and

they are all targeting the same customer segments. There is a low level of product differentiation, thus forcing brand

identification and awareness to be the main element that increases rivalry.


Also, there is an overall consolidation in terms of product segments and brands. M&A deals are being closed every year by

acquisitions of the main players that establish themselves in emerging countries.

The exit barriers are very high due to manufacturing PP&E expensive costs as well as regulatory requirements.

Spirit market category segmentation in 2015

Looking at this market segmentation, we can clearly understand that Whisky, Vodka and Rum are leading the pot in terms of

market sales value.

Although, the specialty segment often remains the strongest. The late generally includes local brands, small companies and

« traditional » spirits which are not discernable within the spirit arena. Those represent huge challenges in terms of changing

customer habits, especially in emerging countries like China, or mature French markets where there is deep-rooted local

traditions on spirit making.


Point of difference vs competitors.

Concerning Whiskies, Thompson should try to be affordable for the whole population and maybe take example on Johnie

Walker or Jack Daniels. The company has to propose a new whisky at a more affordable price to be known by the general

public.

French wine industry is losing market share to the “new world”, represented by countries such as Australia, South Africa or

China. Thompson should focus on those markets to sale their wines. They should also develop a marketing plan for tourism

business and increase their products line to meet other consumers’ demands.


SWOT synthesis.


Market Segmentation and Customer Analysis

Customer Analysis.

The Spirit business have high barriers of entry, notably the hardship of having direct access to the final customer base.

Therefore, we will build our brand identity through online platform that is our website. Even though our products are to

be considered as super-premium, it should attract the right customers as long as we construct targeted content.

Off-line, we will focus on the distribution channels that are less common: still no hyper and super market. The specialists

will be key in positioning us on the shelves.


VISION: Within the next 5 years, Thompson's is to be recognize as one of the only spirit brand that reflects modern day's

cultural diversity.

MISSION: Between France and the United-Kingdom, there is not only historical link, but also the vision of an English man

that migrated to become French as well.

GOAL: By pursuing this vision, we aim at becoming a 1 billion dollar company within the next 5 years. With a positioning

on French, UK and Chinese market, we shall end-up in a position to either be acquired by a market leader or to pursue

partnerships to further grow business in China.

Target Market




Objectives and goals

5 Corners Business Strategy.


New Product & Market Strategy: Next 3 years.


BIBLIOGRAPHY

http://thompsons.fr/

http://www.euromonitor.com/spirits

http://www.thespiritsbusiness.com/2014/01/top-10-spirits-trends-for-2014/

http://www.thedrinksbusiness.com/2015/07/top-5-biggest-brandy-and-cognac-brands/

http://brandy.underthelabel.com/

http://www.reportlinker.com/report/search/theme/brandy

http://www.euromonitor.com/spirits-in-the-united-kingdom/report

http://wsta.co.uk/publications-useful-documents/71-wsta-market-overview-2014/file

Documents

Y-B METALO_Team_Thompson Strategic Recommendation2016IBS