Environmental AnalysisContemporary Leadership and Management IssuesIntroduction"Diageo PLC is a British multinational alcohol company, selling alcohol in 180 countries, with a substantial presence in 30 countries. The company was formed in 1997 through the merger of Guinness PLC with Grand Metropolitan PLC (GrandMet)" (diageo.com). At that time, it was a large multinational company with interests in both food and beverages. Today, the company has abandoned most of its food interests to focus on alcohol, acquiring new spirits brands. Diageo is engaged in the manufacturing and distribution of spirits, wines and beers worldwide. With a collection of exceptional brands, Diageo is the global leader in premium drinks. The company manufactures its products under the names Smirnoff Vodka, Johnnie Walker Scotch Whiskeys, Guinness Stout, Baileys Original Irish Cream Liqueur, J&B Scotch Whiskey, Captain Morgan Rum and Tanqueray Gin. “Diageo PLC operates in over 180 markets around the world with over 20,000 employees, a market capitalization of 1.5 billion and revenues of 8 billion” (diageo.com). Diageo projects an image of itself as a clean, friendly and ethically oriented company. with a commitment to corporate social responsibility. This includes both stated concern about the harm alcohol can cause and statements about the excellent service the company provides in producing such well-loved brands. We selected Diageo to conduct an environmental scan of the industry and remote environments to identify potential opportunities and threats that could arise in the near term. We will describe and evaluate our findings and make recommendations to address the issues and opportunities we discovered during the environmental scan. Our assessment includes the following: Availability of substitute products and threats of new entrants and competition. Diageo has long been the leader in the premium drinks sector. Its brands include Guinness, Smirnoff, Bailey's, Johnnie Walker and Cuervo, complemented by a wide range of local and specialist brands from around the world. In 2002, Diageo had a 15% market share (United States-Spirits, 2002) and was by far the largest spirits manufacturer in the United States, followed by Pernod and Fortune Brands, Inc. The market is expected to hold 9 .8% (Huddleston, 2005) growth over the next three to four years, so new entrants may struggle unless they have the capital to support themselves. The ready-to-drink beverage (PRD) market is an industrial sector with good growth potential and room for competition. because it was not saturated with products.