Appendix 1

SWOT analysis
Strengths
Established in 1799 in Bury St. Edmunds, have been operating pubs for over 200 years and have
gained a distinguished reputation of being one of the best ale breweries in the UK (Greene King
2013).
Greene King owns over 2,256 locations in Britain, starting from pubs and restaurants to hotels,
including renowned brands such as Hungry Horse and Loch Fyne (Thomas 2013).
The company has reported an increase in turnover of 4.8% to a total of 1,195m at the end of
2013 (Mintel 2013).
Greene King noted that it experienced growth across all of its markets with its total operating
profit rising by 5.1%; pre-tax profit rose by 6.6%; like-for-like sales had a 2.3% increase where it
saw 0.4% being driven by volume improvements and also a rise of 1.9% from the rises in price,
mix and spend-per-head (Greene King 2013). Moreover, a growth of 1.0% in brewing and own-
brewed core brands was noted as well as the revenue going up by 2.1% (ibid). Overall,
improvements in earnings, dividend growth and a strong cash flow have been registered (ibid).
The company has made investments in their core ale brands marketing so as to drive a growth in
the volume of core own brewed and also to outperform the ale market (Greene King 2013).
Greene King is expanding its Retail to 1,100 sites by reducing the number of Pub Partners that
were non-core sites as well as improving the estate quality and their offer influence (Greene
King 2013).
The company has got a strong online presence with an online shop delivering around the world,
online customer care, social media pages and websites for every core brand (Greene King 2014).
Weaknesses
The companys tenanted division where independent landlords can lease pubs from, with the
condition that they buy Greene King beer, has been struggling lately therefore the company is
planning on selling the pubs that are ill-performing (Greene King 2013).
Difficulties for pub operators without fixed management teams and long-term strategy have
been registered in the tenanted division (Mintel 2013).
Legislative and tax issues are also prevalent weaknesses as they impose restrictions as to where
alcohol can or cannot be sold as well as the on-trade prices that beer is sold at (Mintel 2010).
Since the ban on smoking has been instated, price has been most responsible for making
drinking in the pub less appealing for a night out (Mintel 2010).
Opportunities
Food incorporates an element that can boost the percentage of sales (Mintel 2010). The
company can create a relaxed and enjoyable environment that promotes responsible drinking
by including themed nights such as curry night, stake night, fish & chips night (ibid). Having a
wide range of good-quality and home-cooked food can help protecting Greene King from the
growing regulatory and tax pressure on alcohol sales (ibid).
The popularity of pub poker and pub quizzes has increased by 47% and respectively 10%
resulting in uplifts in pubs turnovers; therefore having live pub poker nights as well as quiz
nights might be an opportunity for Greene King to increase turnover and revenue (Mintel 2010).
Targeting women by brewing a range of alternative beers that are more palatable and appealing
to them would help increase popularity as well as footfall and revenue (Mintel 2010).
Ales and cask beers are enjoying a period of rediscovery, outperforming other alcoholic drinks
such as lager, spirits and wines, and its attraction factor is currently facing a steady growth, with
one in five pub-goers admitting they would try beer or ales (Mintel 2010).
Threats
Low consumer confidence (Mintel 2013).
Changes in taxation due to recession and financial struggles (ibid).
Preference for soft drinks or non-alcoholic lagers (Mintel 2010).
Governments campaigns anti-binge drinking and regarding health and dieting are more visible
and convincing (ibid).
Interest in electronic game machines in pubs has decreased considerably over the last 5 years
and the popularity of sports in pubs has also fallen, which means that the number of pub goers
is likely to decrease (ibid).
Many consumers are switching their drinking habits due to financial struggle, resorting to
buying beer from supermarkets and drinking at home (Mintel 2013). 18-24 year-olds who are
the most likely to go out and drink are the demographic group most affected by the rising
unemployment rate and have difficulty in finding jobs and getting on the property ladder
(Mintel 2010).























Appendix 2
PEST analysis
Political
The approach that the UK Government had regarding the pubs and the beer market has been an
ambiguous one (Greene King 2013). On the one hand, it had a positive attitude towards pubs and
encouraged support as it realised that beer drunk in pubs is not the primary cause of the high rate of
alcohol-related illnesses in UK (ibid). Moreover, duty on beer has been cut for the first time since the
1950s after a continuous increase of 40% started in 2007 (ibid).
On the other hand, the Government has implemented a series of proposed measures to transfer 100m
of value from pub companies to licensees as opposed to self-regulation and improvements (Greene King
2013). Nonetheless, the duty tax and VAT are still at a high rate and a reform in the Progressive Beer
Duty would help rebalance the tax scale of breweries that invest in growth and pay full taxes (ibid).
Furthermore, a decision on the minimum unit price is being deliberately delayed until Scotland resolves
its legal process (Greene King 2013). Working closely with the minimum unit price, improved alcohol
education can help reduce the insensible alcohol retailing and consumption as well as lowering social
costs of the high rates of alcohol-related illnesses, crime and drunken driving (ibid).
Economic
The UK economy is still at a minimal pace of growth of 1.7% with a low GDP and household income
(Greene King 2013). The cost inflation is superior to the wage inflation therefore consumers have low
confidence in going back to the spending patterns of pre-2007 and pre-recession (ibid). Furthermore,
the on-trade market suffers from the rise of the off-trade markets and the domination of supermarkets
discounted offers and own-label products (Mintel 2010).
Social
Alcohol consumption has recently been in decline as UK consumers have become more conscious about
alcohol-related illnesses, general health and dieting, creating a wave of general hostility towards binge
drinking (Mintel 2010). Moreover, the popularity of other alcoholic drinks has increased such as wine
and spirits as well as the demand for non-alcoholic or flavoured beers and lagers (ibid). There is also a
high demand for premium products which leads to a higher import rate for beers coming from
Netherland (481%), Belgium (170%) and Denmark (300%).
Furthermore, as consumer spending and leisure habits have changed there are other alternatives to the
pub such as consuming alcohol at home (Greene King 2013). The on-trade consumption rate has been
declining by 4.6% per annum since 2002 while the off-trade consumption rate saw an increase of 0.2%
(ibid). In addition, UK consumers tend to eat out more often, go on short holiday breaks or business
related overnight accommodation, therefore they increase the value that competitors offer (ibid).
Technological
The brewing industry has seen a steady development of techniques such as maturation, manufacturing
and packaging which have greatly increased the quality of products and production efficiency as well as
helped reducing wastage and the use of human resources (Greene King 2014). As a result, the increased
production efficiency facilitates a rise in revenues and profitability. Moreover, it also leads to an easier
process of exporting abroad alongside on-line developments such as the online shop, online customer
care and social media (ibid).
















Appendix 3
Porters Five Forces
Competitors
The main competitors of Greene King in the leisure market are the other leading pub operators in the
market such as: Mitchells & Butlers plc, JD Wetherspoon plc, Spirit Pub Company plc, Marstons
Managed Pubs and Whitbread plc as well as supermarket chains that have discount offers on beer and
ales and also own-brand products (Mintel 2010). Moreover, in the beer and brewing market, the
company faces competition from brands such as Guinness, John Smith, Deuchars IPA, Murphys,
Newcastle Brown Ale, Tetleys, Caffreys, Doom Bar and Worthingtons Creamflow (Mintel 2013). Due to
the high concentration of companies, Greene King is a part of an industry in which the rivalry rate is
constantly increasing, both at a national scale as well as globally (Ranchhod & Gurau 2007).
Suppliers
Greene King requires all of their food suppliers to have accreditations from the British Retail Consortium
as well as Safe and Local Supplier Approval and strict labeling requirements and ethical guidelines must
be met alongside full traceability of the supplied products (Greene King 2014).
In addition, another category of suppliers are those who supply the brewing ingredients and are local
small businesses (Greene King 2014). The malted barley is acquired from the fertile soils of Suffolk and
East Anglia, the water is drawn from chalk wells below Brew House in Bury St. Edmunds, the hops are
sourced from Kent and Worcestershire and the yeast is made following the same recipe as the founder
of the company used (ibid).
Buyers
Greene King has a wide range of industrial buyers, starting with 199 Hungry Horse pub restaurants, 108
Old English inns and hotels, 28 Eating Inn pub restaurants, 42 Loch Fyne restaurants, 483 local pubs and
restaurants alongside 978 tenanted pubs, 253 leased pubs and 38 franchise style pubs (Greene King
2013). The latter categories offer more freedom to tenants, lessees and franchisers to have a more
hands-on approach to business which allows them to improve customer loyalty by offering a wider
range of cask ales and beers locally sourced as well as a food, drink, service and entertainment package
for the value community segment (ibid).
The majority of consumer buyers is comprised of 18-34 year-old young single men within the socio-
economic grouping C1C2 who work full-time jobs, most of them living in Yorkshire, Humberside and the
North (Mintel 2010). Moreover, the rising number of the C2DEs who have more time and are more likely
to spend it in pubs is another important buyer segment (ibid). Furthermore, another buyer segment is
made up of the 25-34-year-olds ABC1 socio-economic group who have more disposable income to
spend as well as women aged 35 and above who are considered the Sassy, Wise and Grown Up (SWAG)
market (ibid). Greene Kings main territory is Anglia and London, where research shows that 32% of all
under 34 male drinkers prefer beers and of which more than half are heavy drinkers with 8+ pints per
week (ibid).
Substitutes
The change in consumer spending, drinking and leisure habits as well as the Governments anti-binge
drinking poses a threat on Greene King as it creates demand for different categories of drinks (Ranchhod
& Gurau 2007). Due to technical innovation and performance, these substitutes often show price
differences which might make them more appealing to customers (ibid). Such substitutes are spirits,
lagers, non-alcoholic or flavoured beers and lagers as well as soft drinks and juices (Mintel 2010).
New entrants
New entrants in the market such as independent pubs and new brewers and products also impose a
great deal of pressure on Greene King as some might make strategic alliances which will lead to cost
advantages, new distribution networks and a good brand image (Ranchhod & Gurau 2007). Moreover,
product differentiation in the market will lead to Greene King having to invest more in marketing in
order to retain their customers as well as to acquire new ones (ibid). To name a few, the new entrants
are the following: N17, Independent Brewing Co and Rascals Brewery as well as new products from
foreign brewers such as Carlsberg and Coisbo Beer from Denmark, Dutch brand Heineken, American
brand Molson Coors and SABMiller which is an international brand (Mintel 2013).




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