Internal and External Environmental Analyses
As described by David Sadtler and Andrew Campbell (52-54), the situation at Grand Metropolitan at the time the case was written offered an interesting combination of strengths, weaknesses, opportunities, and threats. On the side of strengths, the firm had endured two different periods of retrenchment, coming back each time (in the 1970s and 1980s) stronger than before by reliance upon horizontal integration and the financial process known as trading property asset purchases. Strengths include a well balanced horizontally integrated portfolio with a presence in the United States, the United Kingdom (the company headquarters), France, Germany, Spain, Japan, Canada, Portugal, Greece, and the Netherlands. Other products are distributed and created in different markets worldwide and an additional strength is the firm's skilled management team which brings to the organization a wealth of experience and success in moving the firm forward in both good and bad times.
Weaknesses include the fact that the portfolio restructuring occurring under the leadership of Allen Sheppard led to major acquisitions which tended to move the firm away from its emphasis on horizontal integration which emphasizes increasing market share by taking over a similar company in one's primary or secondary operating regions ("What Is Vertical and Horizontal Integration" 2). By emphasizing the acquisition of business activities at the same level of the value chain ("Horizontal Integration," 1), Grand Metropolitan moved forward and enjoyed the benefits of synergistic branding. However, the move into marginally related activities under Sheppard in 1985 did tend to weaken the firm's traditional practice of purchasing trading property assets capable of paying the debt incurred during acquisition.
Threats include, as always, ongoing and at times heightened competition in any number of sectors including hotel...