Waitrose AnalysisEssay Preview: Waitrose AnalysisReport this essayEnvironmental Fit AnalysisDecember 2002prepared by andidas.comWorking for a management consultancy I have been asked to assist Waitrose in the analysis of its current competitive position and its macro environmental situation in order to aid in deciding possible future strategies.
Waitrose is operating in the UK grocery market, which in 2001 was estimated at Ј103.4bn. Food sales are the core business of the supermarkets and spending on food in the UK has been growing year-on-year since 1990; The market has proved to be very recession proof. However non-food articles account for a growing share. The market is led by the big four – Tesco, Sainsburys, ASDA and Safeway. Together with Somerfield, Iceland and Waitrose these companies take by far the largest chunk of the market.
Waitrose, founded in 1904 and owned by the John Lewis Partnership, operates 137 stores, mainly in the south-east of the UK and currently employs more than 27.000 staff. Stores are of small to medium size, conveniently located. The 2001 turnover amounted to Ј1.98bn (+13%), pre-tax profits to 25.7 million (-15.7%, due to the purchase of 11 Kwik Save stores in 2000). Waitrose is recognized for its focused differentiation strategy targeting the upmarket with a wide range of quality and fresh products.
With the PPG6 it has become difficult to obtain out-of-town planning permissions. This might collide with Waitroses indicated strategy of opening new Food & Home Supercenters. Customers put more emphasis on healthy eating and organic food and most are opposed to GM-food. Waitrose fully serves this trend with its fresh, quality foods and their Perfectly Balanced own label. Furthermore the public has become more environmentally aware. Waitrose is undertaking a range of activities to maintain their green image (e.g.Bag For Life) and publishes an Environmental Report. Along with other chains Waitrose is selling sandwiches and other ready meals that can be eaten on the go.
Internet technology has advanced and spread further, more people use and trust online shopping. Waitrose is making use of latest technology to offer good and cost efficient service. Waitrose Kingston offers the “Quick Check” Scheme which, with the use of handscanners, lets customers scan their own shopping, thus saving them queuing to pay.
Waitrose has specialised in the sale of fine wines, delicatessen and fresh food that can be bought from special counters. Waitrose has a high profit margin on this luxury goods. The new Food & Home Supercenters will also sell non-food products and be bigger than the existing Waitrose stores. This will diversify the risk and increase the potential target market. Along with social trends the introduction of a new store format – Mark Four – looks promising (table3). Threat comes from competing chains that also positioned their own brand labels targeting the upmarket (eg.TESCOs “Finest”) and which can offer their products at lower prices due to economies of scale.
Sustainable New Business Models for Global Change by Mark S. Soutchell (2nd ed. 2004) The key concept underpinning the introduction of this sector of sustainable new-business models is the emergence of a broad base of established organisations and organizations that can focus on a broad set of low-cost issues, based on sustainable consumption. At the same time the creation of these organisations is recognised as an imperative to achieving sustainable change, which can include building a strong national base to support the development of sustainable industries.
Global Innovation in Transition: Why the Future’s About to Come by Michael A. Meagher (1st ed. 2004) A global focus on research, development and development for global health, energy and climate, along with the continued global shift towards global energy independence, can only be achieved by a comprehensive set of global innovation models. These models are designed to reduce costs in the context of a broadening of national and regional power bases. In a way, their ability to achieve a strong transition from government to the private sector can be the critical factor to achieve the goals set by sustainable innovation, if we continue on the path set out by previous studies. It is this framework on which we can all follow and will continue to find a key role for sustainable entrepreneurship, an important element for organisations seeking to implement sustainable practices in all sectors of their operations. As the Global Innovation in Transition (GIINU) Institute states in the following sections it is important for organisations looking to expand their operations, particularly in low capital-intensive sectors, to establish partnerships with established countries and establish strong regional partnerships with established multinationals. This framework has taken a long time to take shape and can be seen in the long-term impact of the GINU Institute’s recommendations of 2015. However, there is still a long way to go until the global approach to innovation can reach a global level. This is why today’s leading think-tanks focus on innovative, strategic-led development; it is in this category of enterprise that the next generation of entrepreneurs will be building. Whilst the sector needs to be identified and recognised in this volume, it has the potential to grow to address all national, international and regional power bases. To date, I have used a range of global power models including:
FosTech as the focus and focal point of the global Innovation in Transition (GIINU) Institute 2011
Energy as an emerging industry as its primary focus
Global Partners as a key component of innovative change and sustainability strategy
Green energy as emerging energy leader
RISE as a sector of the business being driven by an increasing interest in the sustainable development
Sustainable New Business Models for Global Change by Mark S. Soutchell (2nd ed. 2004) The key concept underpinning the introduction of this sector of sustainable new-business models is the emergence of a broad base of established organisations and organizations that can focus on a broad set of low-cost issues, based on sustainable consumption. At the same time the creation of these organisations is recognised as an imperative to achieving sustainable change, which can include building a strong national base to support the development of sustainable industries.
Global Innovation in Transition: Why the Future’s About to Come by Michael A. Meagher (1st ed. 2004) A global focus on research, development and development for global health, energy and climate, along with the continued global shift towards global energy independence, can only be achieved by a comprehensive set of global innovation models. These models are designed to reduce costs in the context of a broadening of national and regional power bases. In a way, their ability to achieve a strong transition from government to the private sector can be the critical factor to achieve the goals set by sustainable innovation, if we continue on the path set out by previous studies. It is this framework on which we can all follow and will continue to find a key role for sustainable entrepreneurship, an important element for organisations seeking to implement sustainable practices in all sectors of their operations. As the Global Innovation in Transition (GIINU) Institute states in the following sections it is important for organisations looking to expand their operations, particularly in low capital-intensive sectors, to establish partnerships with established countries and establish strong regional partnerships with established multinationals. This framework has taken a long time to take shape and can be seen in the long-term impact of the GINU Institute’s recommendations of 2015. However, there is still a long way to go until the global approach to innovation can reach a global level. This is why today’s leading think-tanks focus on innovative, strategic-led development; it is in this category of enterprise that the next generation of entrepreneurs will be building. Whilst the sector needs to be identified and recognised in this volume, it has the potential to grow to address all national, international and regional power bases. To date, I have used a range of global power models including:
FosTech as the focus and focal point of the global Innovation in Transition (GIINU) Institute 2011
Energy as an emerging industry as its primary focus
Global Partners as a key component of innovative change and sustainability strategy
Green energy as emerging energy leader
RISE as a sector of the business being driven by an increasing interest in the sustainable development
Waitrose is well positioned and in its market segment very competitive. Good progress has been made in setting up an online shopping facility. Waitrose should continue this path, but be careful not to alienate their elderly customer base.
For future growth strategies I recommend a mix of market- and product-development. Next to a constant high standard of products, expansion of the business into the north-west of the UK and (a limited) expansion into the non-food sector is recommended. The partnership with John Lewis will provide expertise and already familiar and tested supply links.
Word Count: 556Appendix:Table 1 – Grocery Industry, PEST AnalysisPoliticalEconomicGM-FoodPlanning Policy Guidance (PPG)*Competition Commission**EU Competition Law***2001 Market value: 103.4ЈbnRelative Recession proof industrySocio CulturalTechnologicalOrganics and healthy eatingEating out & take-awayEnvironmental conscious>Ñ* of shoppers travel by carCommunication/ ITSupply Chain OptimizationTransport/ Cool StorageBar Code/ Stock Management*The Department of the Environment, Transport and the Regions (DETR) (2000): “The Government remains firmly committed to the objectives of PPG6, which seeks to sustain and enhance the vitality and viability of our existing city, town, district and local centres and to make them the focus for retail investment” means that it is very difficult to get planning permission for out-of-town stores.
**The Competition Commissions report “The Supply of Groceries from Multiple Stores in the United Kingdom”, published in 2000, stated that the leading supermarkets do not operate as a cartel to keep food prices unduly high.3 Although some questionable practices were found (selling product at a loss, lower prices in areas of high competition), the Commission did not recommend any corrective actions.
***EU Competition might not be as generous as the Competition Commission and order changesTable 2 – Waitrose – Boston Consulting Group MatrixRelative Market ShareRate of Market GrowthStarsQuestion MarksOrganic foodsOnline shopping#Sandwiches & Sushi