Corporations and conglomerates are artificial beings in the eyes of law which regulates and, if warranted, disciplines these business giants. As a matter of course, inside these entities are still the natural persons who conceptualize the vision, set the directions and execute the plans of these invisible parties created by the operations of statutes.
This simply means that the bulwarks in the corporate jungle are still humans who are generally and commonly insatiable. Despite the good harvest plus the gravy, company executives still aim and strive for more. In the process, focus on an otherwise important objective is forgotten as business decisions and actions become concentrated in meaningless distractions. This paper therefore brings to light the significance of focus, one characteristic which is sometimes undermined and neglected in business. (Bookkeeper. Perspective. Business Mirror. [internet]. That is focus where focus should be.
Focus in Business
Key facts and information
This work has reference to a company engaged in the business of producing and selling wines and other spirits, Diageo plc or Diageo for short. The material and significant facts or data which are considered here may be divided into three sets.
The first set of the said facts are those appurtenant to the grape farms which have a direct relation to the maintenance of a strong and stable inventory of the needed raw materials for the processing and preparation of special upscale brands intended to be produced.
Next is the matter of divesting all exposures in investments not belonging to the wines and spirits niche. As is indicated in the submitted case, stock market excitement is experienced in the divestiture of Diageo’s interests in a concern (Pillsbury) which is not in the wines and spirits venture.
The last set, and for sure not the least, are those information leading to the ultimate goal of concentrating and focusing on the wine aspect of the business enterprise
The issues in the case to be discussed here cover the same three sets of materials facts and information mentioned above albeit there are actually more than three issues involved in the case. In short, the three sets of facts are reconciled with the issues to be debated upon in this accomplishment.
May it be worthy of note that the issues are in the order of the chronological presentation as set forth in the study.
The company’s considerably vast acreage of grapes plantation is a serious point of business strategy. No less than the President of a segment of Diageo has stressed this in an announcement. Diageo Chateau & Estate Wines is Diageo’s remaining wine portfolio. It will play a very important role in the near future.
If indeed the projections framework of Diageo shall give particular or special attention to the production and marketing of upscale brands, there is great need to maintain a strong and stable inventory of the materials needed to prepare and process high-end wines and spirits. Along that line, the company must have its own reservoir of those necessary merchandise or ingredients that must be readily available during any season.
This is definitely acknowledged by the top managers of Diageo. This implication is evident in the fact that when it declared the intention to sell its Glenn Ellen and MG Vallejo wine subsidiaries, what would be disposed of were only the brand names and the then existing inventories but not the vineyards and the facilities of the wineries.
The second strategic issue is that which takes up the matter of Diageo divesting all its interests in investments which have nothing to do with wines and spirits. Why is this so important? For one, this will attract the prospective buyers of the company’s shares which will most likely soar in prices once this move is clearly defined and resolved. As stated earlier, the stock market movement benefited Diageo after it divested its holdings in Pillsbury.
As a matter of fact, the subsequent downtrend pushed the company into announcing that it would also unload its interests in Burger King, likewise a non-wine undertaking. Secondly, the management and revenue synergies earned resultant of Diageo’s coming into existence will go to naught if these divestments are not made.
Why? Because cost is increased rather than reduced. It becomes synergy in reverse because functions, being unrelated, need to be done by two persons instead of one. Hamburger has nothing to do with wine. In making the two, John will cook the patty and James will ferment the grapes. (Corporate synergy. Synergy. Wikipedia. [internet]).
Lastly, Diageo’s focus must be well expressed and unequivocal. Thinking of other things that distract the more important and pressing ones will just spoil management previous time, energy and skills. If the specific products to be offered to the targeted market are upscale wine brands of high-end quality, Diageo must embrace the idea with focused actions and clearly outlined objectives. To sway right one time and sway left another time will be a short-cut to corporate perdition.
In substance, the recommendations are implied in the discussion of the issues above. To recapitulate, Diageo must continue maintaining its grape farms and possibly, depending on statistics, increase the acreage further. It must divest whatever interests which are perceived by the public to be irrelevant in Diageo’s business scope. Lastly, again not the very least, Diageo must focus on where focus belongs. In a way, it is like suggesting that it is an upscale wine brand, produced by a concentrated management, out of a raw material that can be picked up, smashed and fermented 24 hours a day, 7 days a week, 52 weeks a year.
Bookkeeper. Perspective. Business Mirror. [internet]. Available at:
http://www.businessmirror.com.ph/0713&142007/perspective01.html. [Accessed July 8, 2009.]
Corporate synergy. Synergy. Wikipedia. [internet]). Available at:
http://en.wikipedia.org/wiki/Synergy. [Accessed July 8, 2009.]