Pernod-Ricard: Strategic analysis

Résumé du document

Established in 1975 after the merger between Pernod SA and Ricard SA, Pernod-Ricard has 18,226 collaborators throughout 70 countries. Pernod-Ricard is the world leader on the market of premium and prestige spirits, and the co-leader on the wine and spirits market. The company is the leader on the Asian markets, which are the most dynamics. Pernod-Ricard has a large portfolio of premium wines and spirits in whiskies, anis-based spirits, liqueurs, cognacs and brandies, white spirits and rums, bitters, wines. Pernod-Ricard puts emphasis on 14 flagship brands that are 14 strategic spirits and champagne brands. The company also puts emphasis on 4 wine brands.

Pernod-Ricard's strategy is built around 4 main axes:
-Invest heavily on strategic brands with a worldwide vocation
-Turn the portfolio into a premium portfolio in order to accelerate growth and profit
-Continue development on emerging markets which are offering stronger growth perspectives
-Continue external growth after reducing debt in order to stay a dynamic actor of the consolidation of the Wine & Spirits sector

Extraits

[...] Long term What? Why? How? Who? When? How much? References Reports - Pernod Ricard, September 2011, Registration Document 2010/2011; - Xerfi, Allessadro Ravina and Aurélien Duthoit, December 2010, Global Markets and Competiton: World Alcoholic Beverage Compnies 2010-2015 trends; - Xerfi,November Enterprises: Pernod Ricard; - Pernod Riccard Entreprendre UK: the magazine for Pernod Ricard shareholders, Asia a growth engine for the group; Pernod-Ricard is between the 2nd and the 4th place, the company tackle every market successfully. [...]

[...] They indeed have a portfolio made of industry's most prestigious brands (ABSOLUT, Ricard, Scotch Whiskies led by Chivas Regal, having a long and strong history for most of them. Pernod Ricard focuses its strategy on selling premium brand, with a global strategy. Pernod- Ricard strategy in mature market is going towards higher prices through innovation and brand prestige. Furthermore the group also aims at taping emerging markets that are just beginning to adopt wine culture, such as India and China, which offer the strongest growth outlook and represent the most important part of the world luxury market. [...]

[...] Pernod-Ricard puts emphasis on 14 flagship brands that are 14 strategic spirits and champagne brands. The company also puts emphasis on 4 wine brands. Activities' portfolio Pernod-Ricard's strategy is built around 4 main axes: - Invest heavily on strategic brands with a worldwide vocation - Turn the portfolio into a premium portfolio in order to accelerate growth and profit - Continue development on emerging markets which are offering stronger growth perspectives - Continue external growth after reducing debt in order to stay a dynamic actor of the consolidation of the Wine & Spirits sector. [...]

[...] It rather wishes to increase profits by increasing profit margins (by increasing its prestige), than reducing costs through increased efficiency in the Global Value Chain. Having being through the external analysis of Pernod-Ricard, it is interesting to see how the company is positioned in the several markets where it evolves. Financial performance of Pernod-Ricard The company follows for years its reducing debt policy. Commercial and financial aptitudes, master of investment and working capital needs as well as the sale of several non-strategic assets had allowed them to reduce their net debt. Pernod-Ricard is performing well in 2011. Sales increased, such as profit. [...]

[...] The group was formed after the merger of Louis Vuitton and Moët et Chandon and Hennessy (cognac producer). Premium wine and spirit specialist, as Pernod- Ricard, LVMH is a luxury drink specialist. The Group is the World leader in Cognac segment with 44% of the activity in 2009, and holds a strong position in United-states and in Asia (2nd in Singapour, and 3rd in China). It is also the leader in Champaign segment. LVMH focus its strategy on star brands, diversification of activities and worldwide expansion. [...]