SOE11929 – Global Economic Environment and Finance (SOE11144)

Project 1

A. Project Background

Story of Scotch
Extract taken from the Scotch Whisky Association web page.

Scotch Whisky must, by law, be distilled and matured in Scotland in oak casks for at least three years and bottled at a minimum alcoholic strength of 40% abv. The robust legal protection of Scotch – vital to safeguard a spirit globally renowned for its quality – has grown over time. The first definition of Scotch in UK law was secured by 1933, with a dedicated Scotch Whisky Act in 1988 and new Scotch Whisky Regulations in 2009.

The story of Scotch begins as early as the 15th century. The earliest documented record of distilling in Scotland occurred in 1494 in the Exchequer Rolls.

In the 19th century whisky was brought to the British Empire and far beyond, creating global demand from Hong Kong to Hanoi, Sydney to San Francisco, Montreal to Mumbai, Bogota to Berlin, and Cape Town to the Cape Verde Islands. A stroke of luck also aided expansion: in the 1880s the phylloxera beetle destroyed French vineyards, causing wine and brandy to vanish from markets. By the time France recovered, Scotch Whisky had become the preferred spirit.

In 1994, the Scotch Whisky industry celebrated 500 years of production, marked by exports surpassing £2 billion for the first time. Today, Scotch Whisky is enjoyed in 175 countries, with 42 bottles shipped every second, supporting thousands of jobs in Scotland.

B. Current Situation

Extracts from:
Global Scotch Whisky Market: By Product Type, Distribution Channel & Region – Forecast & Opportunities 2025, ReportLinker, The Courier, and the BBC.

Long-term forecasts for the global Scotch whisky market remain favourable due to rising disposable income, growing demand among male consumers, and increased preference for premium and super-premium categories. Population expansion and lifestyle changes further support market growth.

The market is segmented by product type—bottle blended, bulk blended, single malt bottle, bottle single/blended grain, and others—and by distribution channel and region. Europe dominated the market in 2019, with Spain, France, and Germany leading consumption. Asia Pacific is an emerging market, driven by rising per-capita income and evolving consumption patterns.

However, major challenges exist. The 25% tariff imposed by the Trump administration on Scotch single malts and the uncertainty surrounding Brexit pose significant risks. A hard Brexit could disrupt trade and create UK-EU export gridlock, potentially causing a volatile demand spike in 2020 followed by severe contraction in 2021.

C. Project Specifications

Prepare a consulting report on the Scotch Whisky industry. The report should identify possible profit areas for an independent firm from your chosen country to enter the Scottish Whisky industry. It must include:

1. Supply-Side Analysis

• Identify the product, its internal differentiation sources, and key producers.
• Identify substitute products in the chosen target country.
• Both markets must be supported with statistical data.

2. Demand-Side Analysis

• Analyse the political and economic environment (internal and external perspectives).
• Identify microeconomic demand factors and trends.
• Support analysis with statistical data.

3. Economic Theory Integration

The practical analysis must be strongly supported by economic theory.

Using your analysis, sketch an initial proposal to exploit profitable opportunities in the target market and build a sustainable business model.

D. Project 1 Submission Guidelines

The quoted price covers up to 3000 words. For custom requirements: Live Chat or WhatsApp ← Click Here