Understanding the Strategic Limits of Hospitality in Alcohol Sector Growth
(2025) MGTN59 20261Department of Business Administration
- Abstract
- This thesis examines why forward integration into hospitality remains a selective rather than widespread strategy in the alcohol industry. While strategic theory suggests that owning the point of consumption can strengthen brand control and reduce coordination risk, most alcohol producers continue to rely on third-party venues. This study explores why that gap exists.
Drawing on transaction cost economics and the experience economy, the research investigates how firms weigh operational risk against symbolic brand value when considering hospitality ownership. A qualitative single case study was conducted using Guinness as the focal brand within the wider Diageo structure. Nine semi-structured interviews were carried out with senior... (More) - This thesis examines why forward integration into hospitality remains a selective rather than widespread strategy in the alcohol industry. While strategic theory suggests that owning the point of consumption can strengthen brand control and reduce coordination risk, most alcohol producers continue to rely on third-party venues. This study explores why that gap exists.
Drawing on transaction cost economics and the experience economy, the research investigates how firms weigh operational risk against symbolic brand value when considering hospitality ownership. A qualitative single case study was conducted using Guinness as the focal brand within the wider Diageo structure. Nine semi-structured interviews were carried out with senior executives, venue operators and industry practitioners to understand how integration decisions are interpreted in practice.
The findings show that hospitality is not avoided, but used selectively. Integration is pursued only where brand heritage, cultural authenticity and internal capability align. In the case of Guinness, flagship venues such as the Storehouse function as controlled brand spaces designed to reinforce identity and long-term emotional connection rather than to drive scalable revenue growth. Beyond these symbolic environments, the firm relies on carefully managed third-party partnerships to influence customer experience without absorbing the operational complexity and reputational exposure of full ownership.
The study contributes to literature on vertical integration by showing that decisions in experience-sensitive industries extend beyond efficiency logic. Strategic fit, organisational readiness and brand authenticity shape the boundary of the firm as much as cost considerations. The research demonstrates that forward integration into hospitality is viable only under tightly defined conditions, where control enhances brand meaning and the organisation has the capability to deliver consistently. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/student-papers/record/9223214
- author
- Dolan, Ben LU
- supervisor
- organization
- alternative title
- Selective Integration and Brand Experience
- course
- MGTN59 20261
- year
- 2025
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Forward integration Vertical integration Hospitality strategy Alcohol industry Brand experience Experience economy Transaction cost economics
- language
- English
- additional info
- N/A
- id
- 9223214
- date added to LUP
- 2026-02-27 13:48:02
- date last changed
- 2026-02-27 13:48:02
@misc{9223214,
abstract = {{This thesis examines why forward integration into hospitality remains a selective rather than widespread strategy in the alcohol industry. While strategic theory suggests that owning the point of consumption can strengthen brand control and reduce coordination risk, most alcohol producers continue to rely on third-party venues. This study explores why that gap exists.
Drawing on transaction cost economics and the experience economy, the research investigates how firms weigh operational risk against symbolic brand value when considering hospitality ownership. A qualitative single case study was conducted using Guinness as the focal brand within the wider Diageo structure. Nine semi-structured interviews were carried out with senior executives, venue operators and industry practitioners to understand how integration decisions are interpreted in practice.
The findings show that hospitality is not avoided, but used selectively. Integration is pursued only where brand heritage, cultural authenticity and internal capability align. In the case of Guinness, flagship venues such as the Storehouse function as controlled brand spaces designed to reinforce identity and long-term emotional connection rather than to drive scalable revenue growth. Beyond these symbolic environments, the firm relies on carefully managed third-party partnerships to influence customer experience without absorbing the operational complexity and reputational exposure of full ownership.
The study contributes to literature on vertical integration by showing that decisions in experience-sensitive industries extend beyond efficiency logic. Strategic fit, organisational readiness and brand authenticity shape the boundary of the firm as much as cost considerations. The research demonstrates that forward integration into hospitality is viable only under tightly defined conditions, where control enhances brand meaning and the organisation has the capability to deliver consistently.}},
author = {{Dolan, Ben}},
language = {{eng}},
note = {{Student Paper}},
title = {{Understanding the Strategic Limits of Hospitality in Alcohol Sector Growth}},
year = {{2025}},
}