Strategic Marketing at Waitrose - Case Study Example

 Step 1 Executive Summary ( 400 words) Summarise the key findings in your readings. Waitrose is in the business of retailing fresh fruits and vegetables with a market share of more than 2% in UK, with 143 stores. In order to further strengthen its position in the market, the company is in the process of implementing the ‘category leadership’ program for the last four years. Waitrose was able to sell 20% more fruits against an industry average of 2%. FINDINGS: SWOT Analysis. The findings show the strengths, weaknesses, threats and opportunities. The top 2 strengths of the company are: Waitrose is part of a strong John Lewis Partnership plc group, which is a supplier of consumer goods in the fashion, household and food markets(No author, 1999). Company’s main focus area is UK. Having the backing of a strong group helps not only in the form of giving it an identity, but also in the form of experience, reaching out to potential customers, clubbing the marketing decisions, planning out marketing communication strategies etc. And, the company has been able to establish itself quite well, despite squeezing of the profit margins(No author, 1998). The category leadership strategy in particular has provided it with more than 5% of the market share The weaknesses of the company are: still the company is primarily is concentrated within the south of England. Despite having been in the business for so many years. The company requires to strengthen its presence in other markets as well, to take on the competitors. And, Waitrose doesn’t take stock of its business on quarterly basis(No author, 1999). The opportunities of the company are: UK is just about 20% self sufficient in fruits, and the demand for fruits is on the rise gradually. Though traditionally UK is not known to be a fruit lover nation, but with growing number of consumers, better opportunities will certainly emerge. The threats of the company are: UK consumers have a lesser appetite for fruits as compared to European counterparts. If sufficient efforts are not made to widen the consumer base, this may result in lesser intake of fruits, which will ultimately lead to less than expected sales of fruits. And, with the number of suppliers becoming less, the leveraging power of the supermarket stores may be affected as well. Also, the UK supermarket industry is fiercely competitive, with the likes of TESCO, Sainsbury, Asda and Safeway holding the lion’s share of the market’s SWOT analysis is necessary tool for decision making(No author, 2000). Step 2 Alternative Identification and discussion ( 2000 words) Identify the strengths and weaknesses of each of the alternatives and how such alternatives will solve the problem. Describe ALTERNATIVES: 1. Still the company is primarily is concentrated within the south of England. Despite having been in the business for so many years. The company requires to strengthen its presence in other markets as well, to take on the competitors(Hunger, 1996). If the company will set up shop in the north, east and west of England and the larger United Kingdom, then there is a strong probability that the revenues will increase by three times the current revenues generated from the South of England alone. Although the expenses will also increase by three times the current expenses, the net income will surely increase by three times under its current location in the South of England if the company will set up shop in the North, East and West part of England and the wider United Kingdom(Thompson, 1999). Waitrose is implementing a well known competitive marketing strategy. Price waterhouse coopers stated that “Marketing strategy is the most significant planning challenge regardless of industry or size of company. Our goal will be to re-evaluate and examine constantly our marketing position. Our emphasis will be on market strategy, technique and product innovation.” When they did a research on two hundred fifty corporate officers. The managers of Waitrose are implementing the marketing strategy used by these many officers since the 1980s. The Waitrose marketing strategy envelopes numerous and diverse issues, most of which relate directly or indirectly to how successfully you can compete in a combative market place. The company strategy includes the level of customer relationships that you have cultivated. Also, it included how effectively the company’s new products and services match the needs of targeted customer groups. And, the commitment to competitive intelligence, which is the underpinning of competitive strategy. Furthermore, it includes the awareness of changing demographic and shifting buying patterns. And, it includes where your company or product line is on the product life cycle. Finally, it includes the Waitrose’ responsiveness to emerging, neglected and poorly served markets; supply chain issues; Internet and technological changes and the globalization of markets and products. The Waitrose manager was highly skilled for it was able to consciously take into action the above competitive strategies(Paley, 2006). The weakness of implementing this choice will be to lessen its focus on the south of England for the company will be too busy setting up its store it he north, east and west of England and the United Kingdom. also, the company will be too busy generating sales, incurring expenses and increasing net income of the three new areas. 2. Waitrose doesn’t take stock of its business on quarterly basis. In this competitive era, when companies have in fact started taking stock of their business on a monthly basis, as this helps in taking a corrective course, whenever slight deviation appears. With the help of quarterly review, the company could have taken on the competitors much more effectively(Papows, 2002). By strictly studying the movement of its inventory, the company will know when to order the next batch of goods from its suppliers in the United Kingdom. The company should also use past sales amounts one of the basis for decision making. Decision-making includes determining when to order materials that the company will use in order to create finished goods that will be sold or to simply sell the goods bought from the supplier without changing the form of the purchases(Campbell, 1998). One such method of inventory study that will pinpoint the safety stock level and the time for reorder schedule and the Economic Order Quantity. The weakness of this alternative is that it is less assuring than an inventory count taken every month of the year. 3. Increase the UK self sufficiency in fruits. The United Kingdom is just about 20% self sufficient in fruits, and the demand for fruits is on the rise gradually. Traditionally, the United Kingdom is not known to be a fruit lover nation, but with growing number of consumers, better opportunities will certainly emerge. The natural tendency of the company is to increase the production of its highly wanted products to cope up with the customers’ orders. If the company does not increase its production, then the customers may look for other suppliers to fill their needs. This will surely increase the net income of the company. The company should advertise in the radio, television and newspapers in the United Kingdom. The advertisement will create a wake up call to the residents of the United Kingdom as to the advantages of eating fruits and vegetables to improve their health conditions(Luchs, 19998). The weakness of such marketing strategy is that after producing so much goods, the demand suddenly slows down. There will result an oversupply of fruits which will just expire and get rotten(No author, 1998). Also, the company has a weakness in that many of its raw materials may have stayed idle for more than 3 months under the current inventory system(Zeiler, 2004). For, many of the items that are gathering dust in the warehouse could have been sold and converted into cash. And, the warehouse will be more spacious with the removal of non-moving items. These obsolete items could be sold at a low price. The other thing a person sees is risk - with that static inventory, there is a higher risk that obsolescence and damage will occur. Finally, to get that inventory (cash) moving requires taking decisive steps toward increasing its speed. Inventory speed is typically measured as how long cash can be converted to raw materials. 4. The category leadership strategy has so far given good results, it may well prove to be more fruitful in the near future, particularly in view of the research initiatives taken up by the company. Since the company has performed well in the company’s category leadership strategy. As a result the company should increase its production output in order to maintain its leadership. The danger here is that if the company does not produce the goods demanded by the customers, then the customers may look for other suppliers to fill their needs. This will surely increase the net income of the company. The weakness of choosing this alternative is that the company will lose its market share in the other market arenas. Meaning, the company will not be able to expand the marketing of its products in other arenas of the business environment. 5. Waitrose has been continuously trying towards a better co-ordination with the suppliers. If such a co-ordination works well, then the company must be able to get a better deal. In order for the company to maintain the constant supply of goods to the customers, the company has to search for one or more suppliers that will supply the raw materials that Waitrose needs to produce its finished goods. This will surely increase the net income of the company. The weakness of this strategic system is that concentrating only on communication system will cause a delay in the other revenue and expenses activities. 6. If the company can establish a joint mechanism with some of its suppliers, it can check the costs, quality and timeliness of its products quite well. The company can contact its suppliers and inform them of the types, design, quality and specifications of the raw materials it needs to be incorporated in its finished products. For, the company will be able to incorporate these raw materials in its finished products. For, high quality raw materials will literally translate into high quality finished products. And, high quality finished goods will translate to higher demand for its products. Finally, the high product demand will generate high sales and high net income. The weakness of this strategy is that company may be putting all its money on one phase of the business cycle. If business fails in this part, then all everything is lost. But if the business will distribute its money in many market segments, then the lost in one segment will be helped by the gains in the other successful business arenas. 7. Research and implement procedures to lessen or even eliminate the many threats to the company. The company had the threat of the UK consumers have a lesser appetite for fruits as compared to their European counterparts. And, if sufficient efforts are not made to widen the consumer base, this may result in lesser intake of fruits, which will ultimately lead to less than expected sales of fruits. Also, with the number of suppliers becoming less, the leveraging power of the supermarket stores may be affected as well. With less number suppliers, the retail stores may not be able to negotiate for a bargain price. Particularly, if the suppliers start forming a cartel, they will then try to extract maximum out of the retailers. Furthermore, the United Kingdom supermarket industry is fiercely competitive, with the likes of TESCO, Sainsbury, Asda and Safeway holding the lion’s share of the market. These companies have been continuously trying to get hold of more and more market shares. The company must meet these threats head on and immediately. For, conquering these threats will generate more sales and increase the net income of the company. The weakness of this alternative is that the researchers may not have the expertise to gather the much needed data and interpret the data in the proper way. Worst, the researchers may not even know how the frame the research proposal at the start. 8. Perform all of the above alternatives. This last choice is a combination of all the prior seven (7) choices. The seven choices seem to be very good alternatives for the company. The strength in this choice is that since there are more work to be done, then there will be more benefits to reap at the end of the day. However, the weakness of this choice is that since there are too many actions to take at the same time, the there will no mastery of one or two choices. In a nutshell, we must craft strategic management steps in order to understand the above eight choices. Strategic management ( some call it Stra-Ma) represents management’s answers to such gut business issues as whether to concentrate on a single business or build a diversified group of business, whether to cater to a broad range of customers, like in our Waitrose case here, or focus on a particular market niche., whether to develop a wide or narrow product line, whether to pursue a competitive advantage based on low cost or product superiority or unique organizational capabilities, how to respond to changing buyer preferences, how big a geographic market to try to cover, how to react to new market and competitive conditions, how to profitably grow the enterprise over the long term of its existence. The Waitrose strategy must then reflect the choice or choices of management among many viable or even not so viable alternative selections. Management of Waitrose must use strategic management concepts discussed here to signal all the departments of the organization to combine their resources to in a organization wide commitment to meet deadlines as well as quality and quantity benchmarks as they are divided into particular products, markets, competitive approaches and ways of operating the system. Waitrose must craft a winning management strategy that needs to be a top priority managerial task any organization especially Waitrose in our case study. For Waitrose must be proactive in shaping how the company’s business will be conducted. Waitrose has a compelling need to mold the business decisions and competitive actions taken across various parts of the company that will be transformed into a well oiled and coordinated compatible pattern. Waitrose’ strategic management must involve the efforts and decisions of many divisions, departments, managers and employees. As the saying goes, the jack of all trades is a master of none. Frankly speaking, though, a jack of all trades can also be, in a few instances, be a master of some of his trades being practiced. In our case, the sales people can be masters of customer psychology, accounting, finance, economics, laws, rule & regulations and others because they need a well rounded personality to get the nod of that hard to get customer. CONCLUSION: Step 3 Recommendation (1,600 words). Of all the above alternatives, the best choice is alternative no. 8. which is to perform all of the alternatives from no. 1 to no. 7 above. The strength in this choice is that since there are more work to be done, then there will be more benefits to reap at the end of the day. And, the weakness of this choice does not materially overturn or make a dent on the reasons for choosing alternative no. 8. Also, alternative no. 1. Still the company is primarily is concentrated within the south of England. Despite having been in the business for so many years. Since the company is concentrating on South only, then there will lesser operating expenses and employees to pay as compared to setting up shop in the North, South, West and East of London as well as engulping the entire United Kingdom market. But the company surely has to expand to the other three parts of London and the United Kingdom for there is a ready market waiting to be pampered by the product of Waitrose. Also, the company requires to strengthen its presence in other markets as well, to take on the competitors. If the company will set up shop in the north, east and west of England and the larger United Kingdom, then there is a strong probability that the revenues will increase by three times the current revenues generated from the South of England alone. Although the expenses will also increase by three times the current expenses, the net income will surely increase by three times under its current location in the South of England if the company will set up shop in the North, East and West part of England and the wider United Kingdom. It is then true that Waitrose should still implementing a well known competitive marketing strategy. The statement by Price waterhouse coopers that “Marketing strategy is the most significant planning challenge regardless of industry or size of company. Our goal will be to re-evaluate and examine constantly our marketing position. Our emphasis will be on market strategy, technique and product innovation.” is very realistic in our current business environment in their research on two hundred fifty corporate officers. The managers of Waitrose can continue implementing the marketing strategy used by these many officers since the 1980s. The Waitrose marketing strategy envelopes numerous and diverse issues, most of which relate directly or indirectly to how successfully you can compete in a combative market place. The company strategy includes the level of customer relationships that you have cultivated. Also, it includes how effectively the company’s new products and services match the needs of targeted customer groups as well as the commitment to competitive intelligence, which is the underpinning of competitive strategy. Also, the Waitrose manager was highly skilled for it was able to consciously take into action the above competitive strategies(Paley, 2006). The weakness of implementing this choice will not make a stir on the strengths of choosing this alternative. Also, the company will be too busy generating sales, incurring expenses and increasing net income of the three new areas to notice any such weaknesses. Furthermore, alternative no. 2 Waitrose doesn’t take stock of its business on quarterly basis is a good choice also. In this competitive era, when companies have in fact started taking stock of their business on a monthly basis, as this helps in taking a corrective course, whenever slight deviation appears. The company will continue to implement a quarterly review, the company could have taken on the competitors much more effectively. By strictly studying the movement of its inventory, the company will know when to order the next batch of goods from its suppliers in the United Kingdom. It is proper for the company to use past sales amounts one of the basis for decision making for decision-making includes determining when to order ingredients and other necessities that the company will use in order to create finished goods that will be sold or to simply sell the goods bought from the supplier without changing the form of the purchases. One such method of inventory study that will be to use of the safety stock level and the time for reorder schedule and the Economic Order Quantity in determining when to order and how many to order products from the company’s suppliers. The weakness of this alternative is that it is less assuring than a inventory taken every month of the year is not so material to affect the strengths of choosing alternative no. 8. Also, alternative no. 3 the should increase it self sufficiency is a good alternative. For the United Kingdom is just about 20% self sufficient in fruits, and the demand for fruits is on the rise gradually is good alternative. For, the United Kingdom is not known to be a fruit lover nation, but with growing number of consumers, better opportunities will certainly emerge. The natural tendency of the company is to increase the production of its highly wanted products to cope up with the customers’ orders. The company should advertise in the radio, television and newspapers in the United Kingdom. The advertisement will create a wake up call to the residents of the United Kingdom as to the advantages of eating fruits and vegetables to improve their health conditions. The weakness of such marketing strategy is that after producing so much goods, the demand suddenly slows down will not put a dent on the strengths of choosing alternative no. 8. For, many of the items that are gathering dust in the warehouse could have been sold and converted into cash. And, the warehouse will be more spacious with the removal of non-moving items. These obsolete items could be sold at a low price. For the other thing a person sees as risk - with that static inventory, there is a higher risk that obsolescence and damage will occur. Finally, to get that inventory (cash) moving requires taking decisive steps toward increasing its speed. Inventory speed is typically measured as how long cash can be converted to raw materials. And, alternative no 4 the category leadership strategy has so far given good results, it may well prove to be more fruitful in the near future, particularly in view of the research initiatives taken up by the company is a good choice for the company has performed well in the company’s category leadership strategy. Also, the company should increase its production output in order to maintain its leadership. The danger is present for the possibility that the company will not produce the goods demanded by the customers, then the customers may look for other suppliers to fill their needs. This will surely increase the net income of the company. The weakness of choosing this alternative is that the company will lose its market share in the other market arenas will not decrease a bit the strengths of choosing alternative no 8. For, the company will not be able to expand the marketing of its products in other arenas of the business environment. And, alternative no. 5 Waitrose has been continuously trying towards a better co-ordination with the suppliers is good reason for choosing alternative no. 8. And, if such a co-ordination works well, then the company must be able to get a better deal. In order, for the company to maintain the constant supply of goods to the customers, the company has to search for one or more suppliers that will supply the raw materials that Waitrose needs to produce its finished goods. This will surely increase the net income of the company. The weakness of this strategic system that concentrating only on communication system will cause a delay in the other revenue and expenses activities will not affect a bit the choosing alternative no. 8. Furthermore, choosing alternative no. 6 if the company can establish a joint mechanism with some of its suppliers, it can check the costs, quality and timeliness of its products quite well is a good reason for choosing alternative no. 8. The company can contact its suppliers and inform them of the types, design, quality and specifications of the raw materials it needs to be incorporated in its finished products. For, high quality raw materials will literally translate into high quality finished products. The weakness of this strategy is that company may be putting all its money on one phase of the business cycle will not overturn the choice of no 8 as the best choice of the voters. Because, if business fails in this part, then all everything is lost. Furthermore, choosing alternative no. 7 research and implement procedures to lessen or even eliminate the many threats to the company is definitely a good choice. The company had the threat of the UK consumers have a lesser appetite for fruits as compared to their European counterparts. And, if sufficient efforts are not made to widen the consumer base, this may result in lesser intake of fruits, which will ultimately lead to less than expected sales of fruits. Also, with the number of suppliers becoming less, the leveraging power of the supermarket stores may be affected as well. With less number suppliers, the retail stores may not be able to negotiate for a bargain price. Particularly, if the suppliers start forming a cartel, they will then try to extract maximum out of the retailers. For, conquering these threats will generate more sales and increase the net income of the company. The weakness of this alternative is that the researchers may not have the expertise to gather the much needed data and interpret the data in the proper way will not affect the decision of preferring alternative no. 8 References Paley, N., Manager's Guide to Competitive Marketing Strategies, Thorogood Press, London, 2006 Zeiler, J., The NEED for SPEED.(Inventory movement), Operations & Fulfillment, April, 2004 No author, Harvard Business Review on Measuring Corporate Performance, Harvard Business School Press, US, 1998 No author, Harvard Business Review on Measuring Uncertainty, Harvard Business School Press, US, 1999 No author, Harvard Business Review on Corporate Strategy, Harvard Business School Press, US, 1999 No author, Harvard Business Review on Managing Value Chains, Harvard Business School Press, US, 2000 Thompson, A., Strickland A., Strategic Management, McGraw-Hill, N.Y. & London, 1999 Hunger, J., Wheelen, T., (1996), Strategic Management, New York, Addison-Wesley Papows, J., Enterprise.Com, Perseus Books, N.Y., USA, 2002 Campbell, A., Luchs, K., Strategic Synergy, Thompson Press, N.Y. & London, 1998 No author, (1998), Strategies for Growth, Harvard, Harvard Business School Press, Read More