GROUP ROYALSLECTURER : MR. HECTAR JOHN DELA VICTORIA

STRATEGIC MANAGEMENT

GROUP ROYALS DEBRAJ SEDAI 39836 NASEERUDDIN MOHAMMED 39844 ANOSH ASHIK THAI KANDY 39273 AMAL THARANGA 39795 SAFRAZ AHMAD 39989 CHRISTIAN CHIGIZIE OHALE 39758

: INTRODUCTION

Waitrose is one of the leading supermarket chain of UK with 219 supermarkets and 4 convenience stores.

Waitrose is in partnership with The John Lewis, one of the UK’s top ten retail businesses with 28 John Lewis full line department stores.

It is also the country’s largest employee co-operative, with 72,000 employees. The Partnership aims to ensure that everyone who works for it enjoys the experience of ownership, by sharing in the profits, by having access to information and by sharing in decision making.

: HISTORY

 Wallace Waite, Arthur Rose and David Taylor opened their first small grocery shop at 263 Acton Hill, West London in 1904.

The John Lewis Partnership acquired the Waitrose in 1937, opening the first Waitrose supermarket in 1955. 

: MISSION

Waitrose have very simple objectives; it is an action plan for organic farming that aims to ensure 30% of agricultural land in England and Wales and 20% of the food we eat is organic by 2010. It will also make a commitment to deliver organic food that is more affordable to everyone.

Waitrose aims to combine the convenience of a supermarket with the expertise and service of a specialist shop. We also offer you a Price Commitment to ensure you always get good value for money when shopping at Waitrose

: VISION

 Waitrose vision is to be a successful business powered by its people working for it and its principles defines unique company today. The profits and benefits created by Waitrose success are shared by all the Partners.

: : BUSINESS MODEL

BUSINESS MODEL:Aim is to employ the eligible workers who can work as a partners

Provide customers with best possible shopping experience

Distribute a share of profit to all partners

PARTNERS

CUSTOMERS

PROFIT

:

PESTEL ANALYSISPOLITICALECONOMICAL SOCIOCULTURETECHNOLOGICALECOLOGICALLEGAL

EXTERNAL ENVIRONMENT

: : PESTEL

POLITICAL :- The fallout from the financial crisis has led to significant changes in government policy.

Banks has reduced interest rates to their lowest point in 57 years. vat has been gone down to 15% for a period of time.

In 2007 John Lewis and Her Majesty’s Revenue and Customs agreed a scheme to allow partners to receive their bonus tax free.

ECONOMIC: Waitrose has responded to the recession by investing £30 million in price cuts, and the heavy promotion of its “As good as going out” range, in the hope that customers will substitute eating in with going out.

: PESTEL

SOCIOCULTURAL : Waitrose’s customer age profile is skewed towards the 45-64 group In the long term, therefore, Waitrose could be expected to benefit from the UK’s aging population.

With increasing awareness of sustainability issues, recent years have seen significant growth in the organic and fair trade foods. Although Waitrose only has an overall market share of 3.9%, its share in the organic market stands at 18% and fair trade 8.6%.

TECHNOLOGY : The key technological concern to supermarkets is

the continued growth of internet shopping, its growth is ten times higher than the traditional market. Including sales through Ocado, Waitrose currently holds 20% of the online grocery market share. The recently extended five year contract between Waitrose and Ocado is geared to allow Ocado to concentrate its efforts within the M25, where it is the market leader, and to allow Waitrose Deliver to concentrate on other areas.

: PESTEL

ENVIRONMENT : The Government has set clear targets for the reduction of CO2 emissions, and these will have a significant impact on the supermarket industry.

The Partnership has a number of policies aimed at ensuring environmental sustainability, in particular it is leading the industry in the implementation of “green IT” and has developed a framework for the sustainable construction of its new stores in association with “Forum for the Future” to ensure that its new stores meet the BREAAM “excellent” status. The Partnership has won numerous awards for its approach.

LEGAL : The Competition Commission recommended the implementation of a new planning policy which will favour new entrants to the local market. As a smaller operator in the grocery market this legislation could provides new opportunities for growth for Waitrose as new sites become available.

PORTERS FIVE FORCES

COMPETETIVE RIVALRY: The UK supermarket sector is fiercely competitive, led by the “big four” Tesco, Asda, Sainsbury’s and Morrison‘s. Waitrose is seen as operating at the premium end of the supermarket with Marks and Spencer. Waitrose has recently indicated that it will target the convenience store market, following successes by Tesco, Sainsbury’s and Marks and Spencer.

BARRIERS TO ENTRY: The UK Supermarket sector is well developed, and has a small number of successful companies who account for the vast majority. significant investment required to set up and market a supermarket, along with the significant economies of scale and aggressive tactics employed by the existing companies, the barriers to entry are very high.

PORTERS FIVE FORCES

THRERS OF SUBSTITUTES: The key substitution effect in the industry is the move from shopping in stores to shopping online With the exception of Ocado, all of the major online supermarkets are operated by bricks and mortar supermarkets. It is questionable whether Ocado could have succeeded without the support of Waitrose, but as Ocado grows it becomes more feasible that it could eventually become independent. This may explain the continued growth of Waitrose Deliver in tandem with Ocado. The key substitution effect in the industry is the move from shopping in stores to shopping online. With the exception of Ocado, all of the major online supermarkets are operated by bricks and mortar supermarkets. It is questionable whether Ocado could have succeeded without the support of Waitrose, but as Ocado grows it becomes more feasible that it could eventually become independent. This may explain the continued growth of Waitrose Deliver in tandem with Ocado.

BUYER POWER: is particularly high in the supermarket industry, largely because the market is very competitive and people are increasingly mobile.

PORTERS FIVE FORCES

SUPPLER POWER: Supplier power is low, because of limited differentiation, particularly in dry goods, where products can be almost generic. This has led to loss leader marketing of essential lines such as bread in order to try and differentiate by price. Waitrose has typically tried to differentiate through quality and ethics in order to appeal to its premium market segment.

: SWOT

STRENGTS: Reputation: Waitrose and the John Lewis Partnership as a whole have an excellent reputation both with customers and suppliers. Waitrose has shared the top two positions in the Verdict Customer Satisfaction Index with John Lewis for a number of years.

Structure: The corporate structure of the John Lewis Partnership is unique for a company of its size in the UK, and its emphasis on its employees earns it much admiration

: SWOT

WEAKNES: Scale: Waitrose is a relative minnow when compared to the big four supermarket groups. In the past this has made it difficult to find sites suitable for expansion. Waitrose’s size will also have limited the economies of scale available to it.

Price: Waitrose is typically seen to be more expensive than all of its competitors.

: SWOT

OPPERTUNITIES: New branches: The opportunity to extend Waitrose’s reach beyond its traditional market in the South East is a real one

Internet: Internet shopping is the fastest growing area of retailing, and Waitrose is well placed to take advantage of this with its partner, Ocado and its own Waitrose Deliver service.

Overseas: Waitrose has entered a licensing deal with Spinney's in Dubai, which will see the established Spinney's supermarket brand rebranded as Waitrose.

: SWOT

THREATS: Economic uncertainty: The John Lewis Partnership has an “upmarket” reputation, and given that the trend in the economy for the past 50 years has been for increased wealth, “upmarket “could have been considered a solid area for growth in the mid to long term during that entire period.

Money Supply: The Partnership had its sights set on rapid expansion. Its plans may be thwarted to some extent by the impact of the Credit Crunch and the availability of loans for development.

: SUGGESTED STRATEGIES

: CONCLUSION

Waitrose is part of a corporation unlike any other in the UK. Its guiding principle, that it is there for the benefit of the employees, sets it apart from the usual business models, and certainly from its competitors.

The reputation for quality and service clearly differentiates Waitrose from the big four supermarket chains and appears to give Waitrose some upward flexibility in its pricing.

Waitrose’s success can be aligned with its reputation as a premium brand. The key concern is for Waitrose in the near future is likely to be maintaining a premium brand in very uncertain times.

THANK YOU

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