scotch cluster2012 gr7v6
DESCRIPTION
Microeconomics of competitivenessTRANSCRIPT
( )ScotchWhisky Cluster 2012
Group 7
Aimée Tañón, Amit Rawat, Ataol Oktem, Loreto Scaff
1Wednesday, February 22, 2012
( )Scotland
⊛ Scotland
⊛ Scotch Whisky Cluster
⊛ World Scotch Whisky Market
⊛ Challenges for Growth & Recommendations
2Wednesday, February 22, 2012
( )ScotlandCountry History ✣ Microeconomic Performance ✣ National Diamond
3Wednesday, February 22, 2012
( )Scotland
Five periods that shaped the country
1. The Scottish Wars of Independence 1286-1328
2. The Age of Reformation, 1542-1603
3. The Treaty of Union, 1689-1740
4. Migration and Empire, 1830-1939
5. Impact of the Great War, 1914-1928
4Wednesday, February 22, 2012
( )Economic Indicators
Indicator Objectives Today´s performance
Economic Growth
Productivity
Participation in the UK labour market
To raise the GDP growth rate to the UK level by 2011
2010,Q3: -1,1 2010,Q4: -0,8 2011,Q1: -0,5 2011,Q2: -0,4
To match the GDP growth rate of the small independent EU countries by 2017
2010,Q3: -1,22010,Q4: -1,72011,Q1: -1,82011,Q2: -2,0
To rank in the top quartile for productivity against theirs key trading partners in the OECD by 2017
2006: -17,9%2007: -16,7%2008: -17,5%2009: -13,7%
To maintain their position on labour market participation as the top performing country in the UK
2008: 73,9%2009: 72,1%2010: 70,5%2011: 71,4%
To close the gap with the top five OECD economies by 2017
2007: 3,3%2008: 3,7%2009: 5,0%2010: 3,7%
Source: Scottish Government website
5Wednesday, February 22, 2012
( )National Diamond
6Wednesday, February 22, 2012
( )The Scotch Whiskey ClusterIntroduction Scotch Whiskey Cluster ✣ History & Evolution ✣ Scotch Whisky Cluster
7Wednesday, February 22, 2012
( )The Gaelic "usquebaugh", meaning "Water of Life", phonetically became "usky" and then "whisky" in English.
8Wednesday, February 22, 2012
( )Historic Timeline
⊛ 1100 First distillation occurred in Scotland in the early Christian monastic sites.
⊛ 1495 - First written mention of Scotch whisky is in the Exchequer Rolls of Scotland. 'whisky' derives from uisge, which is an abbreviation of uisge beatha, the Scots Gaelic for 'Water of Life' and was used for medicinal purposes.
⊛ 1644 first taxation on scotch whisky, illegal moonshine era
⊛ 1770‘s first whisky export
⊛ Early 1800’s new taxation (financed the war with France, industrial revolution
⊛ 1920‘s Prohibition created a high demand for the export of whisky
⊛ 1995 tax was reduced on scotch whisky
9Wednesday, February 22, 2012
( )"Why do some nations succeed and others fail in international competition?" Double Diamond Theory (Porter)
10Wednesday, February 22, 2012
( )Scotland’s Food/Drink & Whisky Cluster ~ 2010 ~
• Fragmentation of the Food & Drink industry • Strengths are within the whisky industry
sector• Low investment in R&D and innovation• Little collaboration and cooperation • Weakness of links between organizations
and the whisky sector • Lack of connectivity between the areas of
strength and those of weakness
11Wednesday, February 22, 2012
( )Scotland’s Food/Drink & Whisky Cluster ~ 2010 ~
Source: Scottish Government website
12Wednesday, February 22, 2012
( )Scotland’s Whisky Cluster ~ 1500 to 2012 ~
Distilleries
Bottlers & Distributors
Farmers
Scotch Whisky
UK/Scotland
Media / Publishing
Tobacco
EU
Entertainment
Education
Tourism
GlasswareHospitality(Casinos,
Restaurants)
Transportation
Mixers (Soda/Juices)
Snacks (Chips)
Nuts
Supplier : Casks
Airline Industry
Corporations
13Wednesday, February 22, 2012
( )World Scotch Whiskey Market Scotch Global Market ✣ Whisky Making Process ✣ The Scotch Regions and Their Distilleries
14Wednesday, February 22, 2012
( )Global Sales Statistics Exports
Country/ RegionExports in million
Euros (2010)Exports in Million
Euros (2011)% Change
Asia
USA
France
Central & South America
Taiwan
Brazil
Total Exports
€317.7 €422.5 33%
€233.7 €267.6 14%
€192.5 €219.5 13%
€143.9 €214.4 49%
€48.2 €70.0 45%
€28.7 €44.8 56%
€1,470.0 €1,800.0 22.4%
Source: BBC
15Wednesday, February 22, 2012
( )Top 10 Export Markets by Value[ January - June 2011 ]
Country Exports in Million Euros % Change
USA
France
Singapore
Spain
Taiwan
South Korea
South Africa
Germany
Brazil
UAE
€267.60 14%
€219.50 13%
€148.50 64%
€97.20 (-16%)
€70.30 45%
€65.80 (-13%)
€65.50 24%
€62.10 22%
€44.80 56%
€41.90 29%
Source: Scotch Whiskey association SWA
16Wednesday, February 22, 2012
( )Scotch Whisky Process
17Wednesday, February 22, 2012
( )⊛ Malting
⊛ Kilning
⊛ Grinding
⊛ Wort
⊛ Yeasting
⊛ Distillation
⊛ Condensing
⊛ Bottling
Steps to Making Whisky
18Wednesday, February 22, 2012
( )Scotch Regions
Source: The Drinks International Report, 2011
19Wednesday, February 22, 2012
( )⊛ Age
⊛ Small Batches
⊛ Organic
⊛ Best Comeback
⊛ Old Faithful
My Whisky Cellar
20Wednesday, February 22, 2012
( )The Scotch Whiskey ClusterCluster Competitiveness ✣ Diamond Analysis
21Wednesday, February 22, 2012
( )“Geographic concentrations of interconnected companies, specialised suppliers, service providers, firms in related industries, and associated institutions (for example, universities, standards agencies, and trade associations) in particular fields that compete but also co-operate” (Porter).
22Wednesday, February 22, 2012
( )Scotch Cluster Diamond
23Wednesday, February 22, 2012
( )The Scotch Whiskey ClusterInternational Competition ✣ Challenges for Growth ✣ Strategic Recommendations
24Wednesday, February 22, 2012
( )International Competition
There was a reduced demand for cheaper products due to economic downturn, within the spirits market.
25Wednesday, February 22, 2012
( )International Competition
Vodka and cognac are the best performers in sales within the premium spirit market.
Source: The Drinks International Report, 2011
26Wednesday, February 22, 2012
( )International Competition : India
Whisky is the fastest growing spirit in India.
Source: The Drinks International Report, 2011
27Wednesday, February 22, 2012
( )National Challenges
⊛ Poor Performance in UK market
⊛ Increased competition from other spirits
⊛ Trade barriers
⊛ Legal protection
⊛ Social responsibility issues
⊛ Minimum pricing
⊛ High Taxation
⊛ Foreign ownership
⊛ Movement of bottling operations overseas
28Wednesday, February 22, 2012
( )Most Important Challenge? High Taxation
ABV 2008 2009 2010
284 ml Beer
125 ml Table Vine
25 ml Scotch Whisky
3.52% £16.14 £16.46 £17.31
12.50%£15.54 £17.12 £18
40.00%£21.35 £22.64 £23.8
Approximate amount of duty on a normal measure of three kinds of alcoholic drink, each containing
approximately the same amount of alcohol
29Wednesday, February 22, 2012
( )Strategy & Recommendations
KEY CHALLENGES RECOMMENDATIONS
Increased competition from other spirits
Trade barriers
High Taxation
Align the price of whisky with the strategy of the cluster, and reduce price to prevent the increase in market share of other spirits (especially vodka and other whisky types).
Related parties will lobby international activities and improve regulations to eliminate discrimination through trade barriers.
UK Government apply a fair and responsible taxing schema for all alcoholic drinks as per their alcohol content.
30Wednesday, February 22, 2012
( )Thank you! Go raibh maith agat!
31Wednesday, February 22, 2012