Whats Brewing at Whitbreads
Business Applications
What’s Brewing at Whitbread?
Although beer is still a popular alcoholic drink in the UK sales are still falling. They have dropped by eight million pints a day since the last peak in 1979. Sales of beer in pubs are at their lowest since the poorest days of the 1930s recession, with pubs closing at an astonishing rate of 35 a week, according to the British Beer and Pub Association. Some 44,000 jobs have been lost in the British brewing industry over the past five years and a further 43,000 are expected to go within the next five. Since 1997, 37 major breweries have been sold or merged. (The guardian 2012)
One of these major breweries was Whitbread’s. In 2001 Whitbread’s sold off their brewing and pub operations, to further diversify the company to focus on growth areas of the hotel and restaurant industry. They have now grown to become the UK 's leading hospitality business after the ending of their brewing and pub-owning tradition, started by Samuel Whitbread over 250 years earlier. (Whitbread Wikipedia 2012)
Below a graph 1 illustrates the declining number of pubs in UK from 1980 to 2010. (See figure 1).
Figure 1 (BBPA 2012)
There are a number of key macro factors affecting the brewery industry that may have influenced Whitbread’s decision to exit.
PESTEL analysis
One tool to analyze the broad macro-environment is the PESTEL analysis. In the PESTEL analysis environmental influences are categorized into political, economical, social, technological, environmental and legal aspects. It helps to identify how current and future trends might have influenced an organisation. (Ian Worthington and Chris Britton July 2009)
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Political
2
In 2001 Whitbread’s PLC began the journey to become the company they are today. They sold their flagging breweries and left the pub and bar business, refocusing on the growth areas of hotels and the coffee market. Premier Inn and Costa Coffee are two market leading businesses.
What’s Brewing at Whitbread?
Although beer is still a popular alcoholic drink in the UK sales are still falling. They have dropped by eight million pints a day since the last peak in 1979. Sales of beer in pubs are at their lowest since the poorest days of the 1930s recession, with pubs closing at an astonishing rate of 35 a week, according to the British Beer and Pub Association. Some 44,000 jobs have been lost in the British brewing industry over the past five years and a further 43,000 are expected to go within the next five. Since 1997, 37 major breweries have been sold or merged. (The guardian 2012)
One of these major breweries was Whitbread’s. In 2001 Whitbread’s sold off their brewing and pub operations, to further diversify the company to focus on growth areas of the hotel and restaurant industry. They have now grown to become the UK 's leading hospitality business after the ending of their brewing and pub-owning tradition, started by Samuel Whitbread over 250 years earlier. (Whitbread Wikipedia 2012)
Below a graph 1 illustrates the declining number of pubs in UK from 1980 to 2010. (See figure 1).
Figure 1 (BBPA 2012)
There are a number of key macro factors affecting the brewery industry that may have influenced Whitbread’s decision to exit.
PESTEL analysis
One tool to analyze the broad macro-environment is the PESTEL analysis. In the PESTEL analysis environmental influences are categorized into political, economical, social, technological, environmental and legal aspects. It helps to identify how current and future trends might have influenced an organisation. (Ian Worthington and Chris Britton July 2009)
.
Political
2
In 2001 Whitbread’s PLC began the journey to become the company they are today. They sold their flagging breweries and left the pub and bar business, refocusing on the growth areas of hotels and the coffee market. Premier Inn and Costa Coffee are two market leading businesses.
Bibliography: Books David Stevenson (20 Feb 2012) Ian Worthington and Chris Britton (July 2009). The Business Environment. Julian L Baker (9 Feb 2012). The brewing industry. Michael E. Porter (19 Jan 2004). Competitive Strategy: Techniques for Analyzing Industries and Competitors. Michael E. Porter (19 Jan 2004). Competitive Advantage. BBPA - Home . 2013. BBPA - Home . [ONLINE] Available at: http://www.beerandpub.com/. [Accessed 15th December 2012]. BBPA Home - Statistics . 2013. BBPA Home - Statistics . [ONLINE] Available at: http://www.beerandpub.com/statistics. [Accessed 15th December 2012]. Business Strategy - Porter 's Generic Strategies. 2012. Business Strategy - Porter 's Generic Strategies. [ONLINE] Available at: Corporate engagement - Steria UK Costa. 2012. Costa. [ONLINE] Available at: http://www.costa.co.uk/. [Accessed 20th December 2012]. Financial Times - FT.com. 2013. UK news, comment and analysis from the Financial Times - FT.com. [ONLINE] Available at: http://www.ft.com/world/uk. [Accessed 10th January 2013]. Halifax Share Dealing | Accounts | Share Dealing Account. 2013. Halifax Share Dealing | Accounts | Share Dealing Account. [ONLINE] Available at: http://www.halifax.co.uk/sharedealing/our-accounts/share-dealing-account/. [Accessed 10th January 2013]. Market research | Media | Whitbread. 2013. Market research | Media | Whitbread. [ONLINE] Available at: http://www.whitbread.co.uk/whitbread/media/marketresearch.html. [Accessed 10th January 2013]. PESTEL analysis of the macro-environment. 2012. PESTEL analysis of the macro-environment. [ONLINE] Available at: http://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_12.htm. [Accessed 15th December 2012]. Whitbread Annual Reports. 2013. . [ONLINE] Available at: http://miranda.hemscott.com. [Accessed 9th January 2013]. Whitbread. 2012. Whitbread. [ONLINE] Available at: http://www.whitbread.co.uk/whitbread.html. [Accessed 14th December 2012]. Whitbread - Wikipedia, the free encyclopedia. 2012. Whitbread - Wikipedia, the free encyclopedia. [ONLINE] Available at: http://en.wikipedia.org/wiki/Whitbread. [Accessed 12th December 2012].