Murphy Brewery Strategic Ananlysis of Guiness Grand Met Merger
INTRODUCTION This case analysis is a comprehensive outline of Murphy Brewery`s current situation and possible outcomes for the problem with their two major competitors merging. Grand Met and Guinness are set to merge together this year and our marketing team has developed possible solutions to counteract this problem. SITUATION AUDIT Corporate Mission and Objectives Murphy’s need to introduce a new policy in response to the GMG merger, which will threaten their position in the market, considering that the two merging companies (Guinness and Grand Met) are two of the four largest distillers. In addition to this, Guinness was Murphy’s most formable competitor Worldwide. ... This lead to the purchase of Murphy’s by Heineken international in 1983, which allowed Murphy’s to expand and sell its product in approximately 63 countries, including it’s origin in Ireland. This allowed a growth of 700% in Murphy’s product outputs in the last decade. However, this mission statement is quite broad and doesn’t offer a clear guide for the manager to follow in order to define the product markets of interest to Murphy’s. Murphy’s main objective was to achieve 20% of the World’s stout market by the year 2000. This case study was written prior to this date, but from information gathered, although Murphy’s was improving dramatically, they were not making a big impact of their increased shares. This result was mainly concluded because James Murphy’s distraction by his upcoming competitors captured his attention and caused him to loose focus on his main objective. ... For example, Murphy’s market share rose to 15% in the United States, and approximately 7% in America. It seems apparent that Murphy’s brewery does not attain frequent research in order to analyse reviews for their corporate progress. This is concluded through the fact that Murphy did not pull up information quarterly or monthly in order to better understand their positioning, whereas, it took the merger of GMG to push the company to run intense research on the situation. Business Unit Analysis Murphy’s was originally an individual company which gradually evolved into a subsidiary brewery, with a couple of segments owned by different corporations. After its receivership in 1982, Murphy’s Brewery Ireland Limited became a wholly owned subsidiary of Heineken International. In addition to this, an establishment of Murphy’s Trading GmBH is a wholly owned subsidiary of Murphy’s, located in Germany. Murphy’s major product (MIS) is distributed in three main markets which are in Ireland, UK and the US. ... As for the distribution strategy, Murphy’s has developed Irish-themed pubs, competing against the Guinness introduction of the idea. As there is a positive perception of Irish Pubs in many parts of the world, Murphy’s brewery attempts to use this idea in order to increase its distribution. In constant competition with its strongest competitor, Murphy’s is priced at approximately the same price as Guinness in all markets found throughout Ireland. ... Taking into account that Guinness takes 89% of the market share in Ireland, selling to its “loyal customers”, Murphy’s similar Irish appeal, pricing and distribution may not be an advantage. ... These results were beneficial for Murphy’s Brewery because it enabled them to rely upon their innovative bottled and canned packaging. Due to the deterioration of quality in the draught version of stout compared to its version in a can or bottle, Murphy’s has begun to use the draught bottle as this unique brand icon. ... Murphy’s Brewery’s market share in the UK is approximately 15%, with a continued growth. ... The distribution of Murphy’s products is achieved by the Whitebread Beer Company in Luton, to over 27,000 pubs in the country. In addition to this, Whitbread has opened a series of themed bars, which represents the desired image for Murphy’s, aiding the brand recognition in the UK. Murphy’s advertising segment is also quite successful in the UK in comparison to its other International markets. It attacks its strongest competitor by advertising a “Like the Murphy’s, I’m not bitter” campaign. ... Murphy’s decision was to “build slowly” and gain acceptance by customers, rather than making an attempt to buy their market share with expensive mass advertising. ... In September 1996, Murphy’s introduced their unique draughtflow bottle for the “more premium” look, at a standard of $1. ... Murphy’s pricing strategy is to price in parity of its major competitors in each market, usually slightly below the competition. As for its promotional strategy, Murphy tends to reinforce its Irish heritage and origin with the preferred tactical advertising rather than larger-scale strategic campaigns. ... They are considered as highly brand loyal buyers, so those pub customers might include: · Business people-who have an after-hour meeting with business partners · Social activity seekers · Entertainment seekers However, pub sales fell recently, so Murphy has pursued market growth in the development of export and development of the take home market. ... Key Competitor Analysis It is apparent that Murphy’s two direct competitors in the marketplace are Guinness and Beamish & Crawford. ... At the current time it is Murphy’s biggest threat. Guinness and Grand Met are set to merge into a new firm entitled GMG which could prove to be a problematic issue for Murphy’s. ... The fact that Guinness is an older firm than Murphy’s is also disadvantageous as it is more respected and well known as people have been drinking it for hundreds of years.