Little World Beverages Limited's Analysis

Table of Contents

1. Overview of LWB 1

1.1. Macro Economy Condition 1

1.2. Industry Analysis 1

2. Business Strategy Analysis 3

2.1. Competitive Advantage 3

2.2. Success Factors of the Company 4

2.3. Risk Factors 4

2.4. Sustainability 5

3. Appendices 6

4. References 11

1. Overview of LWB:

Little World Beverages Limited (LWB) is an Australian Beverage and Hospitality Company. It mainly engages in brewing, packaging and selling beers and ciders in both domestic and foreign markets. Additionally, it also runs a hospitality business in the areas of Melbourne, Healesville and Fremantle in Australia (See Appendix 3.1).

1.1. Macro Economy Condition:

As revealed in Figure 1, Australian real GDP growth has experienced a highly volatile stage ever since 2000 (Department of Foreign Affairs and Trade Factsheet 2011). This dramatic fluctuation finally ended with the Global Financial Crisis, which profoundly hammered the Australian economy in the post-GFC period. Corresponding to this general trend in GDP, inflation peaked in the year 2008 (Datamonitor 2010). Due to the overall economic downturn, household consumption expenditure has dipped substantially. As is shown in Figure 2, the spending in alcoholic beverages has seen the most significant decrease. As a consequence, the industry of alcoholic drinks in generally has entered into a stagnant phase of development (Datamonitor 2011).

By looking into the development history of LWB, a slowing-down tendency can also be detected at the same time when Global Financial Crisis occurred (Figure 3 & 4). Hence, an overall economic recession impeded the LWB's performance. However, the overall growing trend of the business was still maintained.

Concerning the impact of macroeconomic environment on LWB's future development, there are some factors to be considered. Firstly, the recent Queensland floods could result in falling amount of discretional household spending. Consequently, demand for LWB's product might not see a rapid growth in the near future. Secondly, the confirmed 70% tax hike on ready-to-drink spirits can potentially hinder LWB's ambitious market expansion (Datamonitor 2010).

1.2. Industry Analysis:

Industry Life Cycle:

According to figure 5 and 6, Beer Industry