The Aromatic Strategists

This presentation analyses the strategy adopted by Angostura

Holdings Limited to achieve competitive advantage in order to
continue its progressive and dynamic market growth in the
CARIBBEAN and the rest of the WORLD.

INTRODUCTION

Angostura Holdings Limited is based in Trinidad and Tobago

Angostura is one of the Caribbeans leading spirits producers with a superb
collection of Rum brands and is the worlds market leader for Aromatic
Bitters

WHERE IT ALL BEGAN

HISTORY IN THE MAKING

HISTORY (COntd)

SO WHAT ABOUT
TRINIDAD DISTILLERS LIMITED?

PRODUCTS MANUFACTURED
BY TRINIDAD DISTILLERS LTD:

ANGOSTURA LIMITED

Background

The Angostura Company was started in 1824 in Angostura,

Venezuela and moved to Trinidad in 1875
Currently Angostura Limited markets Angostura Bitters and Rums
locally and internationally

ANGOSTURAS MARKETING STRATEGY

The products marketed by Angostura Limited are:

Fernandes Products marketed by Angostura Limited

BRANDS of

THE ANGOSTURA BRANDS COMPRISES THE FOLLOWING :

INTERNATIONAL RUMS
TRINIDAD JEWELS
OTHER GEMS
LIMITED EDITIONS
ANGOSTURA BITTERS

VMOST VISION / MISSION /

OBJECTIVES / STRATEGIES / TACTICS

VMOST VISION / MISSION /

OBJECTIVES / STRATEGIES / TACTICS

VMOST ANALYSIS

Based on the VMOST factors the following is critically analysed;

Vision Statement is flawed, emphasis is given on the Rum Industry and not
the Aromatic Bitters. The Industry is more relatable to Angostura being the
King of the Bitters Market and as such the emphasis should have been taken
to the bitters.
The vision should have also stated to be the most profitable company in the
world and not only in the Caribbean.
The Mission statements should inherently state the importance of the
Aromatic Bitters as its niche product
The Objectives should fundamentally place emphasis on the expansion of the
Global Markets where the Aromatic Bitters is concerned
The Strategy options should again focus more on the Aromatic Bitters and it
marketable readiness towards the global markets. Additionally, the Trinidad
Jewels should be marketed more externally
The Tactics should place more detailed emphasis on the planning and
development of marketing and distribution of the Aromatic Bitters globally
and by extension seek more foreign brand ambassadors to carry on the
legacy

External Analysis

THE EXTERNAL ANALYSIS CONSISTS OF THE BROAD ENVIRONMENTAL

FACTORS THAT AFFECT THE SPIRITS INDUSTRY. THE EXTERNAL ANALYSIS
WILL BE CARRIED OUT WITH THE FOLLOWING:
PEST ANALYSIS
INDUSTRY ATTRACTIVENESS (PORTERS FIVE COMPETITIVE FORCES)
INDUSTRY LIFE CYCLE ANALYSIS
KEY SUCCESS FACTORS
COMPETITORS ANALYSIS
COSTOMER ANALYSIS
DEGREE OF TURBULENCE

PEST ANALYSIS

INDUSTRY ATTRACTIVENESS
(PORTERS FIVE COMPETITIVE FORCES)

INDUSTRY ATTRACTIVENESS
(PORTERS FIVE COMPETITIVE FORCES)

BARGAINING POWER OF SUPPLIERS

Importation of raw materials, but many suppliers

Competitive pressure is low.

High concentration of purchasers

Suppliers can easily forward integrate

BARGAINING POWER OF BUYERS

Wholesalers is essential in the market channel

Customers are price sensitive

Buyer is well-educated regarding the product

Switching cost low from one seller product to next

COMPETITIVE RIVALRY

Large variety of Alcohol Products on Market

 International Competitors: Scotch

Competitors are strategically diverse they position themselves differently
from other competitors
Low consumer switching costs
TREAT OF SUBSTITUTES
Switching costs are high
Lower prices by competitors
Differentiated Products

Rum Quality is high in the Industry

THREATS OF NEW ENTRANTS

High capital cost to set up Distillery

Government Regulations Preventative Liquor Surcharge

Customer loyalty/ Branding

Distribution Channels

Seek to enter on small scale(high profit margin)

INDUSTRY LIFE CYCLE ANALYSIS

LIFE CYCLE STAGE GROWTH

This industry is in the GROWTH stage of its life cycle
LIFE CYCLE REASONS
Industry value added growth is almost equivalent to GDP growth
Enterprise numbers in developing markets are growing
Generally growing group of products
Advanced rate of technological change

KEY SUCCESS FACTORS

CUSTOMERS- WHAT DO THEY WANT?

Price affordability

Consumers expect value for money-the higher the cost, better the quality

Product must easily available at all social events, supermarkets, liquor marts

COMPETITION-HOW CAN ANGOSTURA BEAT ITS COMPETITORS

Bitters has secret ingredients unique to its brand only-preferred by HRM

Queen of England, US consumes 750,000 four oz. bottles annually

Strong distributive network locally and internationally of bitterssold in 165

markets,95% of rum exported globally

Domestic rum positioning enhanced, new premiumisation strategy-2013

launches the first premium rum in a new limited edition range ,No.1

CORPORATION

High emphasis on branding strategies-e.g.Angostura Aromatic bitters Global

Cocktail Challenge

2010- new packaging leads to increased sales performance

Unique techniques of Production (with only the highest quality molasses) &
aging
Master distiller ,John Georges has almost a third of a century in rum making
experience

The FBI (Food and Beverage Industry )is the largest in the non-energy
manufacturing sector in T&T, Exports over TT $900 M

COMPETITORS ANALYSIS

COMPETITORS ANALYSIS

Customer ANALYSIS

MARKET DYNAMICS:
The introduction of laws against drinking and driving has brought about more
responsible drinking habits
Fall in oil prices can lead to increase in economy priced beverages
Intense competition
CUSTOMER SEGMENTATION: DEMOGRAPHIC
Market penetration achieved based on measurable statistics such as gender,
age, income and education

 Buyer Behaviour:Cultural, Social, Personal and economic and Psychological

Customer analysis

DEGREE OF TURBULENCE ANALYSIS

Internal Analysis

THE INTERNAL ANALYSIS CONSISTS OF THE BROAD INTERNAL FACTORS

THAT AFFECTS THE ORGANIZATION. THE INTERNAL ANALYSIS WILL BE
CARRIED OUT WITH THE FOLLOWING:
RESOURCE AUDIT
VALUE CHAIN
VALUE SYSTEM
MC KINSEYS 7S FRAMEWORK
VRIO FRAMEWORK
CORE COMPETENCIES / DISTINCTIVE CAPABILITIES
BOSTON CONSULTATIVE GROUP (BCG) MATRIX
FINANCIAL ANALYSIS

RESOURCE AUDIT

TANGIBLE RESOURCES
Market leader for Bitters-product unique, key secret ingredient
One of the Worlds leading rum producers-expansion has lead to the
owing of distillers in U.S., Canada, Bahamas and Suriname
AHL and TDL Ltd. are 100% locally owned
Assets (building ,plant and machinery)-valued at TT$289 M
House of Angostura -20 acre complex with Admin Facility , Museum,
Art Gallery ,Auditorium, Merchandising shop etc.
Inventory -TT$181 M,Cash -TT$190 M, Equity-$234M
New packaging and premiumisation strategy( new bitters bottling
facility opened -29th January,2014)

Resource Audit

INTANGIBLE RESOURCES
Branding of the World famous bitters and rum
(May 2001,launches international range of rums in the US)
Strong advertising presence at Carnival ,Fetes, Tobago Jazz Festival
Hosting of the Angostura Global Cocktail Challenge Competition
Winner of numerous prestigious awards internationally
Launching of the Smart phone Apps, Aromatic Bitters Cocktail (2013)
& Phone a Taxi App (2015)
CSR a top priority (Adopt a community, Laventille Steel Band,
hosting of Kids Camp and Hamper Distribution)

VALUE CHAIN

VALUE CHAIN ANALYSIS

VALUE SYSTEM

The firm's value chain links to the value chains of upstream suppliers and
downstream buyers. The result is a larger stream of activities known as the
value system. The development of a competitive advantage depends not only
on the firm-specific value chain, but also on the value system of which the
firm is a part.
For Angostura the value system is focused on the identification of
opportunities to differentiate cutting costs where necessary (hence the
removal of wholesalers and agents) but adding value wherever consumer
preferences make so doing profitable. In their system chains information is
regarded as a critical success factor in which businesses invest and are
willing to share with like-minded trading partners those with whom trust has
been built through commitment over time and with whom conversations
focus on where the opportunities for adding value exist.
Additionally,Angostura is focused on how the benefits of collaborative cost
reduction and differentiation can be shared for the longer term benefit of all
stakeholders in the chain. Notice also that in value chains, the barriers
between firms (inter-organisational silos) that are so prominent in traditional
supply chains, dissolve over time as the chain learns to pull together, as one,
united in the focus on the final consumer and the sustainability of the chain
as a whole.

VALUE SYSTEM

The Upstream Suppliers represent the supplier and agency associations.

Suppliers are the entities that consist of breweries, wineries, and distilleries
located throughout the country, region and the rest of the world. Liquor
agencies are the entities that are primarily responsible for inventory
management, sales, and product promotion. Angostura upstream
associations were consistent in that all believe that status quo is not an
option. The underlying theme of all suggestions was that free market
conditions should take precedent over fairness and equity to retailers
whereby suppliers and agents would have a greater control over how their
products were moved through the supply chain (e.g., who distributed them).
The implications of greater supplier control are that product selection and
standardized pricing could be impacted in a positive way.
The Downstream Buyers represent the retailer associations. Unlike the
upstream associations, the general consensus of this group is that fairness
and equity to retailers must be maintained (i.e., equal access to LTOs,
standardized wholesale pricing, postage stamp delivery). The suggestions are
centred on fixing the existing system rather than whole scale changes to the
underlying principles of state agency type management since its majority
owned by CL Holdings.

MC KINSEYS 7S FRAMEWORK

MC KINSEYS 7S FRAMEWORK

VRIO FRAMEWORK

VALUE ADDED - CORE COMPETENCIES

Clear distinctive brand proposition that focuses solely on a closely defined

customer group.
Skills in customer relationship management.
High manufacturing and distribution quality.
Staff training and professional development.
ISO certified in quality management and environmental management.
Producer of the world renowned Aromatic Bitters.
This company is responsible for producing the worlds most flavorful product,
and is the preferred bitters all around the world because of its high quality.
Wide span of corporate social responsibility.

 Production of consistent quality fresh distillates and finished cased product.

Innovative package design and product perception.

BOSTON CONSULTING GROUP (BCG) MATRIX

FINANCIAL ANALYSIS

Stock/Trade info

AHL VS Manufacturing

5 year financial analysis

VERTICAL ANALYSIS

Profitability ratios

ACTIVITY(short)/LIQUIDITY ratios

Gearing ratios

STRATEGIC FIT
SWOT ANALYSIS
TOWS MATRIX
EVR CONGRUENCE
ANSOFF DIRECTIONAL MATRIX
STRATEGIC OPTIONS
MAIN STRATEGIC OBJECTIVES

QUESTIONS

SWOT ANALYSIS

TOWS STATEGIC MATRIX

ENVIRONMENT, VALUES & RESOURCES [EVR] ANALYSIS

ENVIRONMENTAL, VALUES & RESOURCES (EVR) CONGRUENCE

ANALYSIS best fit

More important than the basic idea of E-V-R is the concept of congruence. For
angostura it was tried, tested and is true, that the organisation accomplish

and achieved congruence of best fit since its environment, resources and
values are mutually reinforcing;
Its strategic position is strong;
Its position in the sprits industry is solid and sturdy in local, regional & on the
Global scale;
Its place in the Aromatic Bitters industry is second to none.

ANSOFF DIRECTIONAL MATRIX

ANSOFF DIRECTIONAL MATRIX ANALYSIS

STRATEGIC OPTIONS

MARKET PENETRATION; Use Aromatic Bitters as main focal point to gain advanced competitive
advances in within the Global Market
Incorporate and encourage the use of Aromatic Bitters worldwide with
educating the masses of the history and benefits of the Aromatic Bitters
encouraging the youth to become global brand ambassadors to take the
bitters to boldly go where no bitters have gone before!
MARKET DEVELOPMENT; Develop strong relevant brand portfolios that win in the local market
Develop marketing campaign to target young drinkers
Use trend toward ready to drink beverages to develop new products

MAIN STRATEGIC OBJECTIVES MARKET PENETRATION / MARKET

DEVELOPMENT

Ready to drink beverages is the new and future trend for alcoholic drinks
compare to the traditional mixing of drinks; Angostura could develop new
products such as rum and coke in a can or bottle, or more ready to drink
mixes of products since they carry the mixture line of juices and liqueur
together.
The company has the internal resources and capabilities needed, such as
skilled employee talent, its own state of the art distillery and a reputable
position for producing innovative flexible quality products. With that in mind
the ultimate conclusion for the company is to maximize on its current
existing facility of the water purification process runned in one of its phases

of the distilling process and produce, generate, brand and market its own line
of WATER! Just imagine that! Brilliant!

MAIN STRATEGIC OBJECTIVES

Market development

Influenced either by marketing gimmicks or friends who has great credibility

With the correct marketing activities they can persuade this audience to be
dedicated to the brand.

Angostura needs to develop a Strategy that when a male consumer reaches

the legal age to drink he must want angostura SBR, it buts be a legacy and
with this strategy they can achieve that goal.

Ready to drink beverages, water with bitters (health stomach).

MAIN STRATEGIC OBJECTIVES

They should adopt Market Penetration

Some of the ways Angostura could use digital marketing are discussion
boards, polls and quizzes, videos, photos, links to offsite promotions, and
custom developed applications.

Angostura should also look at behavioral targeting as this enables the

company to develop unique,long-term relationships with individual
customers. Through ongoing data collection and tracking,marketers can
create personalized marketing and sales appeals based on a customer's
uniquepreferences, behaviours, and psychological profile.

Use Aromatic Bitters as main focal point to gain advanced competitive

advances in within the Global Market

YouTube videos on their profile pages in social media sites like Facebook or
forward them to friends is what allows a popular video to go viral.

The campaign has been a success to a point but it has not convinced
the consumers to switch from scotch as it is felt that there is no
added value to them.

QUESTIONS?

REFERENCES

1. Angostura Annual Reports (2010)

http://www.angostura.com/InvestorRelations/FinancialResults accessed online
23/2/2015 30/4/2015

2. Angostura Annual Reports (2011)

http://www.angostura.com/InvestorRelations/FinancialResults accessed online
23/2/2015 30/4/2015
3. Angostura Annual Reports (2012)
http://www.angostura.com/InvestorRelations/FinancialResults accessed online
23/2/2015 30/4/2015
4. Angostura Annual Reports (2013)
http://www.angostura.com/InvestorRelations/FinancialResults accessed online
23/2/2015 30/4/2015
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http://www.angostura.com/InvestorRelations/FinancialResults accessed online
23/2/2015 30/4/2015
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