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Waitrose SWOT Analysis Essay

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Introduction

Waitrose is a supermarket based in the United Kingdom. It is owned by John Lewis partnership that is a British retailer and is valued as one of its food division. The supermarket has record a tremendous growth in the UK market over the recent years. It had about 228 branches across the UK by June 2010 and the number is expected to grow with time.

Waitrose is the 6th largest grocery retailer in the UK and has a current market share of about 3.45% of the respective market in UK. The company offers quality food and customer service which gives it a competitive edge over its competitors. The customer especially the middle class people are ready to pay for the quality foods and services they get. The company is regarded as being expensive but people still go for the quality (Kotler, 2001, 8).

The company was started in 1904 as part of John Lewis partnership in the south west of the UK. The company has a vast work force and employs over 27,000 persons. The stores are conveniently located and are of medium size and other are of small size. It has been recording a strong turnover and pretax profit. In 2002, for instance, it recorded 9.7% increase from the previous year and 60.1 million pounds.

The company’s performance seems to continue strengthening over the coming years. The long-term goal of the company is to open many branches across UK. For instance, by 2017, the company is targeting to open 400 branches in the United Kingdom. By the year 2016, the company is also aiming at increasing its revenue to 8 billion pounds.

Waitrose SWOT analysis

This paper aims at analyzing the SWOT analysis of Waitrose Company. The SWOT analysis analyzes the strengths, weaknesses, opportunities and threats that the company is exposed to. The company has a very strong position in the United Kingdom and has the opportunities to grow even further. Under the strengths, the focus is made on the qualities or team that the business has over others businesses in the same industry.

The weaknesses focuses on the disadvantages that the company has compared to others operating in the same industry. The opportunities are the chances that the company has in the external environment to expand its sales or profit within the given environment. The companies also face threats from its competitors and other elements in the environment that may cause problems in to the business.

Waitrose marketing strategies gives it a strong edge over its competitors. For instance, the company focuses on the differentiation strategy for the product and customers. It offers own brand quality products that satisfies a big market share. The company has high specialization in quality products that includes fine wines and fresh foods that earns a high profit margin for the company.

The Waitrose portal Waitrose.com is a strong site that is efficient in marketing the company products. It has variety of foods advertised in it and customers are able to learn more about them (McGoldrick, 2002, 5). The distribution of distribution of Waitrose products has also been enhanced by the collaboration of the company and the online grocer Ocado through its site, Ocado.com. The site for waitrose offers both the product information and also the purchase opportunities to the online customers (Grande, 2000, 22).

The SWOT analysis for waitrose is summarized in the table below. It is divided into internal factors that include strengths and external factors that include opportunities and threats.

SWOT analysis table

Internal factors
Strengths Weaknesses
1. Own Labels “Perfectly Balanced– the company has pioneered in developing own brands that carry a wide variety line of products. The introduction of perfectly balanced brand in 2001 helped the company to win more customers. The brand gave people a fresh and health lifestyle to many people who became royal customers. This makes the company to be stronger in the market than its competitors (Mendis, 2001, 26).

2. Work Delivery Scheme- the company has a strong work delivery scheme that ensures that the employees are qualified and works to deliver the best services. This helps the company to deliver services in a better way than the other companies in the industry.

3. Fresh/ Quality Food (own farms) – the company offers fresh foods to the customers which are of high quality and fit for the needs of the consumers (Solomon, 1999, 8). The company also own farms where it produces such foodstuffs for consumption. It is therefore possible to offer more fresh and quality foods compares to the other companies in the industry.

4. Wide Range of products- waitrose satisfies a wide rage of needs for its customers by offering them a wide rage of food products. Fine wines, food stuffs etc, offers a wide rage of benefits to the customers. It therefore becomes easier to maintain the customers and build a stronger customer royalty compared to other companies in the same industry.

5. Service- besides selling high quality products, the company accompanies that with quality services through online selling (Chen, 2001, 12). For instance, product information is available to the customers in the company’s website (Hoffman, 1997, 43). Customer can even buy the products online via Ocado.com which is an online grocer.

6. Customer loyalty: despite the fact that the company targets the high class people, it is still liked by many. This shows a strong relationship it has with the customers.

1. Online-Shopping– the online shopping undertaken by the company may not be very effective as compared to other methods. Not all customers can be able to shop online as it contains a lot of logistics and can also be expensive. Over concentration on online shopping may put off some customers who may not be able to access internet or may not have knowledge about online shopping (Nielson, 2000, 3).

Expansion is difficult due to existing

Store coverage– waitrose already has wide store coverage and chances of expansion within the united kingdom are minimal. The competition is still stiff in the industry and other companies in the industry still have chances to expand their stores (O’Keeffe & Fearne, 2005, 296).

Very dependant on the performance of own labels– overdependence on own label may pose a challenge to the company because it does not give the company the taste of other labels. The customer may get overused to one label and therefore they may not experience the value added (Kleindl, 2001, 23).

External factors
Opportunities Threats
1. Expansion into the north-west– the company has the opportunity of opening more stores and expanding its operations in the north-west UK region.

Retail Partnerships– waitrose has the opportunity to strengthen its partnership with the company like Ocado.com in order to enhance its operations online.

Internet shopping (ocado.com) – waitrose has the opportunity to improve its online shopping through Ocado.com which is an online selling grocery. This will enable the company to reach out to many customers across the UK and other (Navarro, 2005, 4) suitable countries.

Further exploiting the Non-food sector– the company has mostly concentrated with food items but with the current customer royalty within the UK, the company can venture into the non-food sector and excel better. This would improve its growth in to the other sectors.

4. Proper advertisement: the company has a well development website that it uses to advertise its products. This helps in creating awareness to people in other countries and also the domestic market. The company has the opportunity of fetching a bigger market share if in could improve its marketing strategies through other means like radio, television etc.

1. Cheap-chains targeting the high end Market– waitrose concentrates much on the upper end of the market and therefore neglects the bigger market that is dominated by the lower class people. This is a big threat as other companies are indiscriminately targeting the entire market (Hanson, 2000, 6).

2. Overseas groups entering the market– the company is facing treats from the overseas grocers that are entering the UK market. This means the market is becoming smaller.

3. Manufacturers are still seeking to legally slow down the penetration of Own brands– since the company over relies on the own brands, it may have a big challenge as the penetration of the own brands is being slowed down in the market.

4. Market share. It shows that the supermarket has a relatively small market share(3%) compared to other supermarkets in the UK market like The Big Food Group PLC 6%, Wm Morrison Supermarkets PLC 5% and others. The supermarket has therefore to work extra hard to outsmart others.

Reference List (cited sources)

Chen, S., 2001. Strategic Management of E-Business. Chichester: John & Wiley, Grande, C., 2000. Waitrose plans online service for homes. UK: Financial Times.

Hanson, W., 2000. Principles of Internet Marketing. Cincinnati: South-Western College Publishing.

Hoffman, D. & Novak, T., 1997. A New Marketing Paradigm for Electroinc Commerce. The Information Society. Special Issue on Electronic Commerce. Vol 13, 43 – 54.

Kleindl, B., 2001. Strategic Electronic Marketing. Cincinnati: South-Western College Publishing.

Kotler, P. et al., 2001. Principles of Marketing. Harlow: Pearson Education Limited.

McGoldrick, P., 2002. Retail Marketing. Berkshire: Mc Graw Hill.

Mendis, G., 2001. Bought my life on the internet. UK: Evening Standard, 2003, p. 26.

Navarro, A., 2005. Effective Web Design. Alameda: Sybex Inc.

Nielson, J., 2000. Designing Web Usability. USA:New Riders Publishing.

O’Keeffe, M. & Fearne, A., 2005. From Commodity marketing to category.

Management: Insights from the Waitrose category leadership program in fresh produce. Supply Chain Management, 7(5), 296 – 301.

Solomon, M., 1999. Consumer Behavior, International Edition. 5th Ed. New Jersey: Prentice-Hall International, Inc.

Bibliography (sources not cited)

Arthur, C., 2003. The Independent: Internet grocery shopping shrugs off the basket case Image. New Jersey: Prentice-Hall International, Inc.

BBC News., 2008. . London: BBC News Channel. Web.

Clapperton, G., 2003. Supermarket switch. The Guardian. p. 42.

Cunningham, S., 2002. Cash Online: Net yourself a yueltide log-on. The Observer. p. 15.

Evening Standard. 29-4-2002. Left on shelf: Cyber stores failing to deliver the goods. New Jersey: Prentice-Hall International, Inc p. 39.

Evening Standard. 21-5-2003. Mendis, Gita. I bought my life on the internet. New Jersey: Prentice-Hall International, Inc p. 26.

Evening Standard. 17-11-2003. Trolley Good: Women wise up to the web. New Jersey: Prentice-Hall International, Inc p. 18.

Finch, J., 2000. . London: Guardian. Web.

Gail, R., 2008. Waitrose improves stockholding reduces waste. US: SAS Institute Inc. Web.

Mahbubur, R., 2000. Electronic Commerce: Opportunity and Challenges. London: Idea Group Publishing.

McClellan, J., 2003. Sweet smell of success. The Guardian. p. 24.

Porter, M. E., 2001. Strategy and the Internet. Harvard Business Review. Vol 2. March. p. 63 – 78.

Rayport, J. F. & Jaworski, B. J., 2002. Cases in E-Commerce. New York; McGrawHill.

Rettie, R., 2002. How will the Internet Change Marketing? Waitrose environmental Report. Mimeo: Kingston University.

Rosenfeld, R. & Morville, T., 1998. Information Architecture for the World Wide Web. Sebastopol: O’Reilly.

Ryle, S., 2001. “Delivering the goods brings success”. The Observer. p. 6.

Smithers, R., 2007. . London: The Guardian. Web.

The Economist. 2002. “Off their Trolleys?” Waitro24 se, vol. 365. No. 8300. p. 58.

Venkatraman, N. 2000. Five Steps to a Dot-Com Strategy: How to find your Footing on the Web. Sloan Management Review. Vol 2. p. 15 – 27.

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