Market Plan of Smirnoff Vodka

In: Business and Management

Submitted By zklapadaki
Words 3804
Pages 16
Introduction

When local markets mature and opportunities are not coming up as they used to, firms must reallocate their position and their strategy. Entering new markets offers advantages and developing opportunities. In order to achieve profitability Michael Porter established a 4 strategy matrix, three of which might be found very useful to a company that wishes to follow international headway (Michael Porter, 1980). Through this assignment Porter’s matrix and his proposals are about to be presented as a helpful tool for any enterprise that whishes development off its country’s borders. Two major companies, worldwide known for their products in beverage market segment are about to be analyzed as representative examples of their differentiative and cost leadership character. VIN and Spirit, a Swedish firm which was the creator of Absolut Vodka compared with Diageo, Smirnoff’s enterprise. VIN and Spirit Company without the basic knowledge of a global strategy, it managed to obtain one of the leading market beverage segments being also a very representative example of advertising and packaging differentiation (Vin & Spirit Annual report, 2007). The second company, DIAGEO is producing popular products ne of which is Smirnoff Vodka. Because of its well known products worldwide, Diageo does not concentrate on a specific product (DIAGEO Annual Report, 2007).Instead it uses very good organized mechanisms of production, promotion packaging and distribution with lowest cost which offers the advantage of selling cheaper than the competitors, without spoiling product’s quality (Michael Porter, 1980). Information about the mentioned enterprises was taken from their 2008 annual report, before VIN & Spirit sold “Absolut” to Pernoid Ricard Company.

Differentiation versus low cost

Companies that are sharing the same market haven’t necessary the same…...

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