Key External Environment Analysis

Because the retail grocery market is typically low margin, “typically in the mid-single digit range”.(VALUELINE, 2013) It is critical for companies to have some type of cost advantage over peers, the larger chains may be able to obtain better and cheaper access to products than the independent stores(economies of scale). Labor is also a significant cost to retail grocers, representing 50% to 53% of total operating costs (EHOW, 2013). Other operating costs (including rent, utilities, transportation, and technology) are controllable by the company. Lastly, technology costs are key in the retail grocery industry in order to increase efficiency in operations and aid marketing aids. Point-of-sale systems can help to increase inventory turnover and sales and lead to better targeted customer marketing (COUNTERPOINTPOS, 2013)

However, this is not the case for many other businesses as they see recession as actually creating an opportunity for making long-term profits. The recession has helped businesses to come out stronger than ever. Waitrose had seen sales fall as customers chose to buy from rivals such as Asda/Tesco. In response to that Waitrose launched its 'essential Waitrose' range in an attempt to win over customers that have abandoned the chain in favour of cheaper outlets such as Asda or even Lidl and Aldi. Waitrose has woken up to the recession and they realized that they need to make their value message clearer. The performance of Waitrose,

But the social factor is affecting on the supermarket and because of its customers. People who shop in Waitrose are people middle age or older. It is fact that the population in UK is ageing and `this trend is projected to continue`. The increase in the number of old people is increase in the number of the Waitrose`s customers. http://www.statistics.gov.uk/cci/nugget.asp?id=949 accessed 21/03/2011

Open an online store where customers can order and pay online and the product delivered to them.

The main purpose of this paper is through the company 's external and internal environment analysis to evaluate the company in the industry and future developments. Assess the external environment mainly through PESTLE Analysis and Porter 's 5 Forces. Strategic Recourses & Capability Analysis for internal environmental assessment is conducted. Finally, the company somehow SWOT analysis, concluded ••••

The organic food industry has seen a huge spike in growth that is expected to continue into the future due to an increase in consumption. This will provide Whole Foods Market with huge opportunities. In addition, a wave of ethical and responsible consumption has swept across America. Whole Foods’ decision to pursue sustainable activities will certainly give consumers an added incentive to purchase its organic products.

Technology is/and still playing a vital role in any business. The growth of online selling in the UK and the world has led to large increase in its online sales. The raising numbers of people, who own computers, smartphones and tablets; and having access to internet which has a high positive impact for their online sales. As there is an increase in demand of new technology, developments of new tablets, computers are rising in popularity and John Lewis sells a wide range of these. For John Lewis to keep up with the demands of their customers they had to move in-line with the recent development of new

The UK supermarket industry is a very competitive and profitable industry. It is made up of four main players with significant share of the market, and then various smaller companies who focus on smaller niches in the market such as the bottom of the market discounters and the top of the line speciality stores. It is an interesting market and this report evaluates the attractiveness of the industry using Porter’s five forces model with an insight into how market nicher Waitrose sustains a competitive advantage. Next this report looks at how major player Sainsbury’s successfully competes against its rivals using differentiation strategies, and analyses current consumer trends and problems can effect this industry.

Scanner data, Loyalty card data, Web Shopping provide bring significant new capabilities to the customer service in the grocery industry. All of these innovations were crucial components for a modern grocery store. They unified by an information system platform which supported the daily running of the entire store. Scanner data was the fundamental of the whole system. All the products in the store will be digitalized

This will benefit John Lewis as sales for the good quality products would be increasing which furthermore could lead to John Lewis recovering from their losses if they were in one and go into break even or begin to start getting profits. John Lewis would buy more stock from its suppliers at this period of the economic environment as when demand increases you must get more supply to meet that demand. Also John Lewis at the time since they buy in bulk from their suppliers they can benefit from getting more stock at a good price that gives good value for money, as usually suppliers would offer you extra amounts of stock if you buy in large quantities. During this period of time interest rates would be low compared to in recession because there isn’t as much financial institutions to try get as much finance as they can from small amounts of borrowings from their company in this period as customers, business etc intend to borrow more money in this period of time as they are fairly financially stable, so to encourage the businesses and customers to begin taking sources of finance they lower the rates. So John Lewis is more likely to start borrowing sources of finance if needed then in the period of growth.

Larger stores also offer people the convenience of additional services along with their shopping, for example post office, pharmacy and opticians. By addressing consumer’s expectations and using their buyer power they can offer a choice of products to reflect consumer’s diverse budgetary, dietary, ethical and environmental requirements. Furthermore their global buyer power enables consumers to benefit from choosing exotic produce all year round. With 30,000,000 customers (Bevan cited in Allen, 2009) choosing to use the big four supermarkets on a weekly basis it would suggest that they provide a format that consumers want.

Tesco also have social factors that affect them, as the business have charity centre in helping the less privilege people and the more these people gets poor, the more they will have to stretch to help out which also spending money.

Technology is a major macro-environmental variable which has influenced the development of many of the Aldi products. The new technologies benefit both customers and the company: customer satisfaction rises because goods are readily available, services can become more personalised and shopping more convenient.The launch of the Efficient Consumer Response (ECR) initiative provided the shift that is now apparent in the management of food supply chains (Datamonitor Report, 2003). Aldi stores utilise the following technologies:

TAXATION: The Waitrose is imposed taxes on its business profit and over selling the goods to its customer. This can even affect its strategic plan if there is a fluctuation.

When Waitrose was taken over by John Lewis, the status of Waitrose improved in the eyes of the consumer and the market. With the help of John Lewis, Waitrose strengthened its supply chains