An Analysis of Waitrose's Market Share and Strategies
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AI Summary
To succeed in the competitive UK grocery market, Waitrose and Tesco employed different strategies. Waitrose focused on providing tailored experiences for customers, operated online businesses, and optimized costs and benefits analysis of pricing strategies. In contrast, Tesco diversified its product offerings, promoted non-food items, and utilized aggressive visual campaigns to capture more market share. Both companies used SWOT analysis, PESTLE, and Porter's Five Forces to inform their strategies. Waitrose needs to diversify and expand globally or domestically to capture more market share, while Tesco has sustained its position through thoughtful planning and economic market knowledge.
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A Study Of
Tescos & Waitrose,
UK
Name
Date
1
Tescos & Waitrose,
UK
Name
Date
1
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Executive Summary
This paperwork relays the methodology and research of the development professionals from the
University. The research was performed in order to define and develop an assessment tool to
monitor assessment. After in-depth work on research groups, & case studies, we were able to
identify two important retailers of UK which are Tesco PLC &Waitrose which have a strong
presence across & how they compete in the same market. This report covers external & internal
factors, resources surrounding Tesco & Waitrose Company. It conducts an in-depth analysis &
identifies implementation of retail strategy mix which could differentiate Tesco & Waitrose
existing in the same environment. The core emphasis lies in the strategy planned & marketing
mix used by both in key highlighting their strength & weakness.
Both the companies are leading companies in super market stores especially in food & drink
industry. Even after having knowledge of know how techniques of handling resources in
manufacturing, management of supplies, trained staffs how they are both able to distinguish
themselves & still provide unique essence of retailing industry.
For understanding the research we measured various parameters & the scope of project by
reading reports, magazines, books & online searches.
2
This paperwork relays the methodology and research of the development professionals from the
University. The research was performed in order to define and develop an assessment tool to
monitor assessment. After in-depth work on research groups, & case studies, we were able to
identify two important retailers of UK which are Tesco PLC &Waitrose which have a strong
presence across & how they compete in the same market. This report covers external & internal
factors, resources surrounding Tesco & Waitrose Company. It conducts an in-depth analysis &
identifies implementation of retail strategy mix which could differentiate Tesco & Waitrose
existing in the same environment. The core emphasis lies in the strategy planned & marketing
mix used by both in key highlighting their strength & weakness.
Both the companies are leading companies in super market stores especially in food & drink
industry. Even after having knowledge of know how techniques of handling resources in
manufacturing, management of supplies, trained staffs how they are both able to distinguish
themselves & still provide unique essence of retailing industry.
For understanding the research we measured various parameters & the scope of project by
reading reports, magazines, books & online searches.
2
Table of Contents
Table of Contents
Executive Summary 2
Introduction 3
Situation Analysis 5
i. PESTLE Analysis 5
1. Political Factor 5
2. Economic Factor 6
3. Social Factor 6
4. Technological Factor 6
5. Legal Factor 7
6. Environmental Factor 7
ii. Porter’s Five Forces 7
1. Bargaining Power of Suppliers 8
2. Bargaining Power of Buyers 8
3. Threat of New Entrants 8
4. Threat of Substitute Products 8
5. Competitive Rivalry 8
iii. SWOT Analysis 9
1. Strengths 9
2. Weaknesses 10
3. Opportunities10
4. Threats 11
Objectives 12
Positioning, Targeting, and Image 13
i. Target Market of Tesco vs. Waitrose 13
ii. Positioning Strategy of Tesco vs. Waitrose 13
iii. Image of Company of Tesco vs. Waitrose 13
Retail Mix 14
i. Range of Merchandize Mix 14
ii. Pricing 14
iii. Communications 15
iv. Location 15
v. Store Design and Layout (should include visual merchandising, and atmospherics)
16
vi. Customer Service 17
3
Table of Contents
Executive Summary 2
Introduction 3
Situation Analysis 5
i. PESTLE Analysis 5
1. Political Factor 5
2. Economic Factor 6
3. Social Factor 6
4. Technological Factor 6
5. Legal Factor 7
6. Environmental Factor 7
ii. Porter’s Five Forces 7
1. Bargaining Power of Suppliers 8
2. Bargaining Power of Buyers 8
3. Threat of New Entrants 8
4. Threat of Substitute Products 8
5. Competitive Rivalry 8
iii. SWOT Analysis 9
1. Strengths 9
2. Weaknesses 10
3. Opportunities10
4. Threats 11
Objectives 12
Positioning, Targeting, and Image 13
i. Target Market of Tesco vs. Waitrose 13
ii. Positioning Strategy of Tesco vs. Waitrose 13
iii. Image of Company of Tesco vs. Waitrose 13
Retail Mix 14
i. Range of Merchandize Mix 14
ii. Pricing 14
iii. Communications 15
iv. Location 15
v. Store Design and Layout (should include visual merchandising, and atmospherics)
16
vi. Customer Service 17
3
Conclusions 18
CHAPTER ONE: Introduction
Leading UK companies in super-markets how they compete in the same environment facing
challenges internally or externally & how they transfer it their strength & sustain their market
share. Reading about previous strategy retail mix used, analyzing it in depth through researches
online & from reports helped in translating into a live example to resolve the current
implementation of retail strategy issues & mark it as learning for the future courses of action.
Key strategy was devised which was mapped as per the challenges levels. For the external issues,
joint ventures & diversifications were recommended & for internal retail strategy issues with the
support of promotions, advertisements & tie ups attributed into streamlining strategies to
distinguish itself from the competition. The research questions to approach this hypothesis
focused on the following main themes:
Issues during implementation of retail strategy mix
Solutions to smoothly implement retail strategy mix
Strategies used in distinguishing itself
What recommendations or conclusions can be drawn while implementing
This report summarizes implementation of retail strategy mix be it in Tesco or in Waitrose UK,
ways to strategize it and optimizing it to capture maximum market share. All the key topics are
bifurcated into seven chapters which comes helpful in learning & concluding issues. First, it
highlights the key topic covered in an introduction. The next section includes situation analysis
& then it covers objectives. Chapter 4, explains the Positioning, targeting, image & Chapter 5
explains retail mix strategies to understand market & ways to capture it. Last chapters draw
conclusion part.
4
CHAPTER ONE: Introduction
Leading UK companies in super-markets how they compete in the same environment facing
challenges internally or externally & how they transfer it their strength & sustain their market
share. Reading about previous strategy retail mix used, analyzing it in depth through researches
online & from reports helped in translating into a live example to resolve the current
implementation of retail strategy issues & mark it as learning for the future courses of action.
Key strategy was devised which was mapped as per the challenges levels. For the external issues,
joint ventures & diversifications were recommended & for internal retail strategy issues with the
support of promotions, advertisements & tie ups attributed into streamlining strategies to
distinguish itself from the competition. The research questions to approach this hypothesis
focused on the following main themes:
Issues during implementation of retail strategy mix
Solutions to smoothly implement retail strategy mix
Strategies used in distinguishing itself
What recommendations or conclusions can be drawn while implementing
This report summarizes implementation of retail strategy mix be it in Tesco or in Waitrose UK,
ways to strategize it and optimizing it to capture maximum market share. All the key topics are
bifurcated into seven chapters which comes helpful in learning & concluding issues. First, it
highlights the key topic covered in an introduction. The next section includes situation analysis
& then it covers objectives. Chapter 4, explains the Positioning, targeting, image & Chapter 5
explains retail mix strategies to understand market & ways to capture it. Last chapters draw
conclusion part.
4
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CHAPTER TWO: SITUATION ANALYSIS
In this chapter, we draw comparisons between Tesco & Waitrose by understanding the situation
in which both the company coexists and for this we did extensive research in situation analysis.
i) Comparative PESTEL Analysis framework of Tesco & Waitrose
1. Political
For Tesco, UK political market has always been favorable and for Waitrose same is the scenario.
The challenge remains when it requires penetrating into new global market segments it needs a
political support & permission of targeted countries. For eg. Penetrating into India it needs to
check political stability, favorable reforms & then decide launch of new stores & products. For
this Tesco have huge resources and funds to sustain while diversifying globally but same is not
the case with Waitrose which has limited resources with optimum utilizations.
Tesco has a vision to penetrate globally & keeps a check in a peer strategy for the road blockage
while entering into new market domain & segments. On the contrary, Waitrose captures majorly
in UK & has penetrated less globally hence it only compliances with UK government rules &
reforms.
2. Economic
Favorable economic factors globally & locally are a big concern for both the companies.
Downturn in economy results in consumer changed behavior while tough reforms leads to price
dropping & no sales growth especially in non food items.
5
In this chapter, we draw comparisons between Tesco & Waitrose by understanding the situation
in which both the company coexists and for this we did extensive research in situation analysis.
i) Comparative PESTEL Analysis framework of Tesco & Waitrose
1. Political
For Tesco, UK political market has always been favorable and for Waitrose same is the scenario.
The challenge remains when it requires penetrating into new global market segments it needs a
political support & permission of targeted countries. For eg. Penetrating into India it needs to
check political stability, favorable reforms & then decide launch of new stores & products. For
this Tesco have huge resources and funds to sustain while diversifying globally but same is not
the case with Waitrose which has limited resources with optimum utilizations.
Tesco has a vision to penetrate globally & keeps a check in a peer strategy for the road blockage
while entering into new market domain & segments. On the contrary, Waitrose captures majorly
in UK & has penetrated less globally hence it only compliances with UK government rules &
reforms.
2. Economic
Favorable economic factors globally & locally are a big concern for both the companies.
Downturn in economy results in consumer changed behavior while tough reforms leads to price
dropping & no sales growth especially in non food items.
5
However food items are last dropped item form the list during high inflation & economic
downturns but still to sustain in existing scenarios & retain customer base TESCO should launch
more loyalty & warrant cards scheme (Euromonitor, 2010).
While for Waitrose it is highly dependent on UK economic reforms. As of now it has stable
prices but due to the bad recession in 2008 it resulted in customer switching & heavy losses.
Hence regular schemes, promotions, cards loyalty should be launched to maintain customer
database
3. Social
Change in lifestyle, buying behavior, improved health awareness leads to changes in pattern.
Tesco should consistently foresee changed social behavior & choose alternative plans.
For example : keeping more organic or non-organic food items for a health- conscious people.
Tesco keeps a tab on the payment methods used such as cheques, cash credit/debit card, bank
transfer or payment through customer loyalty or cards which help in serving satisfied customers.
While Waitrose has adopted itself to changed mindsets of consumer behavior because of buying
patterns, new lifestyles, habits & preferences. Waitrose follows an updated market trend of food
or non food items & has excluded outdated stuff. Keeping abreast with Waitrose focus it came
with up market promotional activities.
4. Technological
Keeping stocks fresh, introducing latest technology, maintain logistics is all tricks to penetrate
easily in the market & cater to the needs of customer (Office for National Statistics, 2010).Tesco
upgrade itself to latest style & technology in order to sustain & compete with peers.
6
downturns but still to sustain in existing scenarios & retain customer base TESCO should launch
more loyalty & warrant cards scheme (Euromonitor, 2010).
While for Waitrose it is highly dependent on UK economic reforms. As of now it has stable
prices but due to the bad recession in 2008 it resulted in customer switching & heavy losses.
Hence regular schemes, promotions, cards loyalty should be launched to maintain customer
database
3. Social
Change in lifestyle, buying behavior, improved health awareness leads to changes in pattern.
Tesco should consistently foresee changed social behavior & choose alternative plans.
For example : keeping more organic or non-organic food items for a health- conscious people.
Tesco keeps a tab on the payment methods used such as cheques, cash credit/debit card, bank
transfer or payment through customer loyalty or cards which help in serving satisfied customers.
While Waitrose has adopted itself to changed mindsets of consumer behavior because of buying
patterns, new lifestyles, habits & preferences. Waitrose follows an updated market trend of food
or non food items & has excluded outdated stuff. Keeping abreast with Waitrose focus it came
with up market promotional activities.
4. Technological
Keeping stocks fresh, introducing latest technology, maintain logistics is all tricks to penetrate
easily in the market & cater to the needs of customer (Office for National Statistics, 2010).Tesco
upgrade itself to latest style & technology in order to sustain & compete with peers.
6
Customer Loyalty programs, cards, schemes, convenient payments system result in customer
loyalty which has very well utilized by Tesco (Sun, 2009).
While Waitrose keep itself updated & adapted patterns changed technology, storage, supply
deliverables, transportation in grocery food items segment catering majorly to UK citizens.
5. Environmental
Government support & strategically encouragement resulted in Tesco promotions in the targeted
company. Carbon footprint resulted Tesco introduction in organic & non organic food items
(Wood, 2009).
For Waitrose, reduce food waste, ban of plastics & using of more environment friendly
decomposable stuff (Yuthas, 2009).
6. Legal
Service tax in food items & VAT in non-food items has been applied as per targeted countries in
Tesco.
Minimum wages pay & gender equality has been implemented in the Tesco as per the specific
country norms.
While for Waitrose its more a pro UK oriented & hence domestically it includes all laws,
reforms, taxes etc. & globally it adheres to quality standards set by institutes reforms to
strategize penetrated markets.
ii) PORTER competitive analysis for Tesco plc & Waitrose
7
loyalty which has very well utilized by Tesco (Sun, 2009).
While Waitrose keep itself updated & adapted patterns changed technology, storage, supply
deliverables, transportation in grocery food items segment catering majorly to UK citizens.
5. Environmental
Government support & strategically encouragement resulted in Tesco promotions in the targeted
company. Carbon footprint resulted Tesco introduction in organic & non organic food items
(Wood, 2009).
For Waitrose, reduce food waste, ban of plastics & using of more environment friendly
decomposable stuff (Yuthas, 2009).
6. Legal
Service tax in food items & VAT in non-food items has been applied as per targeted countries in
Tesco.
Minimum wages pay & gender equality has been implemented in the Tesco as per the specific
country norms.
While for Waitrose its more a pro UK oriented & hence domestically it includes all laws,
reforms, taxes etc. & globally it adheres to quality standards set by institutes reforms to
strategize penetrated markets.
ii) PORTER competitive analysis for Tesco plc & Waitrose
7
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These can be distinguished & analyzed on the basis of below points-:
1. Bargaining power of suppliers: Tesco strategies through low specific suppliers dealing in
the market & price rise in inputs result in producing products at higher costs while for
Waitrose switching to the alternative suppliers due to cheap supply are low since margin
are quite low.
2. Bargaining power of buyers: Since companies like TESCO exists in a perfect market
hence their end products should be of same price while for Waitrose switching costs are
readily available due to many options available (Davey and Laurance, 2008).
3. Threat of new entrants: New entrants in various sectors delivering products & services at
a cheaper prices, breaking market share of Tesco PLC. While for Waitrose it is able to
sustain in the market, capturing market share since it provides better crème class products
& services at same price Sainsbury charge its customers. Waitrose unique essence of its
product is high quality products which keeps it class apart from other competitor M&S.
4. Threat of substitute products: For Tesco, cheaper substitutes products are readily
available in the market while Waitrose caters to a specific domain of retail market hence
levels of substitutes are quite low. For Tesco, some existing players are big & dominant
in the market hence entering into a completely new domain will result in resistance &
forces. For, Waitrose if it wants to enter in a new market they should have hands on
experience & market knowledge (John Lewis, 2012).
5. Rivalry among the existing players: For Tesco, constant competition between Wal-Mart,
Carrefour, J Sainsbury, ASDA, and K-Mart & thinking of new strategies & techniques to
keep rivals at bay. (Peter & Donnelly 2002) while Waitrose competitors are M&S &
8
1. Bargaining power of suppliers: Tesco strategies through low specific suppliers dealing in
the market & price rise in inputs result in producing products at higher costs while for
Waitrose switching to the alternative suppliers due to cheap supply are low since margin
are quite low.
2. Bargaining power of buyers: Since companies like TESCO exists in a perfect market
hence their end products should be of same price while for Waitrose switching costs are
readily available due to many options available (Davey and Laurance, 2008).
3. Threat of new entrants: New entrants in various sectors delivering products & services at
a cheaper prices, breaking market share of Tesco PLC. While for Waitrose it is able to
sustain in the market, capturing market share since it provides better crème class products
& services at same price Sainsbury charge its customers. Waitrose unique essence of its
product is high quality products which keeps it class apart from other competitor M&S.
4. Threat of substitute products: For Tesco, cheaper substitutes products are readily
available in the market while Waitrose caters to a specific domain of retail market hence
levels of substitutes are quite low. For Tesco, some existing players are big & dominant
in the market hence entering into a completely new domain will result in resistance &
forces. For, Waitrose if it wants to enter in a new market they should have hands on
experience & market knowledge (John Lewis, 2012).
5. Rivalry among the existing players: For Tesco, constant competition between Wal-Mart,
Carrefour, J Sainsbury, ASDA, and K-Mart & thinking of new strategies & techniques to
keep rivals at bay. (Peter & Donnelly 2002) while Waitrose competitors are M&S &
8
Sainsbury need of middle class delivering products with freshness & crème upmarket
products.
iii) Comparative SWOT Analysis of Tesco & Waitrose
A strengths, weaknesses, opportunities and threats (SWOT) analysis of Tesco &Waitrose
has been provided below.
1. Strengths
Tesco main strength lies in-:
TESCO caters in various divisions & sub segments & has a 4,331 stores in the USA,
Europe and Asia.
After Walmart & Carrefour, Tesco captures a third largest grocery retail market share in
the world (Euromonitor, 2010).
Strong strategy adopted is the customization to products & services as per market
demands & customer needs.
Tesco introduced a loyalty scheme card as a ‘Tesco Clubcard’ for the regular customers.
While Waitrose main strength lies in-:
Waitrose Company has an exclusivity supply to Prince Charles.
With a 300 stores it’s able to capture 1/6th market share in UK.
Marketing & through strategy promotion of ‘upmarket’ it has penetrated into the minds
of consumers & proved to be a strong competitor.
myWaitrose loyalty card launch resulted in customer retention scheme.
With employee strength of 1,00,000 it got appreciated with many rewards & recognition
for best quality products.
9
products.
iii) Comparative SWOT Analysis of Tesco & Waitrose
A strengths, weaknesses, opportunities and threats (SWOT) analysis of Tesco &Waitrose
has been provided below.
1. Strengths
Tesco main strength lies in-:
TESCO caters in various divisions & sub segments & has a 4,331 stores in the USA,
Europe and Asia.
After Walmart & Carrefour, Tesco captures a third largest grocery retail market share in
the world (Euromonitor, 2010).
Strong strategy adopted is the customization to products & services as per market
demands & customer needs.
Tesco introduced a loyalty scheme card as a ‘Tesco Clubcard’ for the regular customers.
While Waitrose main strength lies in-:
Waitrose Company has an exclusivity supply to Prince Charles.
With a 300 stores it’s able to capture 1/6th market share in UK.
Marketing & through strategy promotion of ‘upmarket’ it has penetrated into the minds
of consumers & proved to be a strong competitor.
myWaitrose loyalty card launch resulted in customer retention scheme.
With employee strength of 1,00,000 it got appreciated with many rewards & recognition
for best quality products.
9
2. Weaknesses
Tesco weakness lies in:
Cut throat competition resulting in changing alternative strategies & cost cutting.
Due to the tough competition certain Tesco products could not survive with peers
competitors& had to be recalled due failed strategies & losses. It deeply affected brand
image of the Tesco as they opted for the using cheaper alternatives with high quality.
Due to the lack of geographic diversifications & market knowledge TESCO main
concentration was from UK which highlights existing systemic risks of the UK market.
While Waitrose weakness lies in-:
Niche & focus on one segment of retail. It should diversify into more market segments.
High Price wars & cut throat competition in the market resulting in slashing of prices.
Negative feedback & bad image portrayed due to the magazine Waitrose Kitchen.
3. Opportunities
The opportunity of Tesco lies in
Since TESCO has secured a global place hence its commercial portfolio should widen up.
Focusing on the geographic diversification & opening up of more stores will capture
more market share customizing to the needs of the customer.
Due to the global presence the customer base has also increased & scope is to diversify
into more customer segmentation which will generate more per unit sales.
To expand in various countries & break barriers to entry they can tie up through joint
venture & franchise options. (Daily Mail, 2010).
10
Tesco weakness lies in:
Cut throat competition resulting in changing alternative strategies & cost cutting.
Due to the tough competition certain Tesco products could not survive with peers
competitors& had to be recalled due failed strategies & losses. It deeply affected brand
image of the Tesco as they opted for the using cheaper alternatives with high quality.
Due to the lack of geographic diversifications & market knowledge TESCO main
concentration was from UK which highlights existing systemic risks of the UK market.
While Waitrose weakness lies in-:
Niche & focus on one segment of retail. It should diversify into more market segments.
High Price wars & cut throat competition in the market resulting in slashing of prices.
Negative feedback & bad image portrayed due to the magazine Waitrose Kitchen.
3. Opportunities
The opportunity of Tesco lies in
Since TESCO has secured a global place hence its commercial portfolio should widen up.
Focusing on the geographic diversification & opening up of more stores will capture
more market share customizing to the needs of the customer.
Due to the global presence the customer base has also increased & scope is to diversify
into more customer segmentation which will generate more per unit sales.
To expand in various countries & break barriers to entry they can tie up through joint
venture & franchise options. (Daily Mail, 2010).
10
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While Waitrose opportunities lies in-:
Penetrate into more diversified segments & capture more market share.
Build heavy loyal customer base & launch more schemes & loyalty cards.
4. Threats
Threats for Tesco:
Aggressive competition in the market leads to revise strategy planning & invest more
alternative strategy to save market share.
Unemployment, market down turn leads to changing behavior of consumer for non food
items hence threat lies in cost cutting techniques.
While Waitrose threats lies in-:
Competition wars & penetration into new segments will result in price wars and Waitrose
has limited funds.
11
Penetrate into more diversified segments & capture more market share.
Build heavy loyal customer base & launch more schemes & loyalty cards.
4. Threats
Threats for Tesco:
Aggressive competition in the market leads to revise strategy planning & invest more
alternative strategy to save market share.
Unemployment, market down turn leads to changing behavior of consumer for non food
items hence threat lies in cost cutting techniques.
While Waitrose threats lies in-:
Competition wars & penetration into new segments will result in price wars and Waitrose
has limited funds.
11
CHAPTER THREE: OBJECTIVES
This chapter discusses about the Tesco & Waitrose objectives & how they capitalize same
market still mark itself differently.
The objective of Tesco is to expand globally & diversify, promote more of nonfood
section/divisions, while that of Waitrose is to provide quality groceries, wine, and spirits at a
lower price & maintain a customer loyalty. Both the companies’ objectives are suitable as per the
individual orientation.
12
This chapter discusses about the Tesco & Waitrose objectives & how they capitalize same
market still mark itself differently.
The objective of Tesco is to expand globally & diversify, promote more of nonfood
section/divisions, while that of Waitrose is to provide quality groceries, wine, and spirits at a
lower price & maintain a customer loyalty. Both the companies’ objectives are suitable as per the
individual orientation.
12
CHAPTER FOUR: POSITIONING, TARGETING, and IMAGE
Through this chapter we are able to understand TESCO & Waitrose UK position, which sectors,
products its should target & how to improve their brand, company image.
i) Target Market of Tesco PLC & Waitrose
Tesco targeted UK divisions & sub segments serving lower to upper class. It promoted
aggressively & now stand as one of the cost leaders. While Waitrose only targeted UK sectors &
focused in serving high class products with high quality serving from middle to upper class.
ii) Positioning Strategy of Tesco PLC & Waitrose
Tesco PLC, when it entered market it was a focused only in grocery retail market & soon
enough it has positioned itself as diversified brand serving in major segments & sub segments.
While Waitrose, has positioned itself in the minds of consumers through the word of mouth &
by tying up with branded companies to position itself as upmarket store.
iii) Image of Company Tesco PLC & Waitrose
Tesco has imaged itself from huge mega stores, express stores to normal convenience stores it
has imaged itself as one stop shop. While Waitrose has improved its brand image consistently &
labeled itself as par, fresh & unique through intelligent promotional activities. Now it Waitrose
image is considered as one of the up market store.
13
Through this chapter we are able to understand TESCO & Waitrose UK position, which sectors,
products its should target & how to improve their brand, company image.
i) Target Market of Tesco PLC & Waitrose
Tesco targeted UK divisions & sub segments serving lower to upper class. It promoted
aggressively & now stand as one of the cost leaders. While Waitrose only targeted UK sectors &
focused in serving high class products with high quality serving from middle to upper class.
ii) Positioning Strategy of Tesco PLC & Waitrose
Tesco PLC, when it entered market it was a focused only in grocery retail market & soon
enough it has positioned itself as diversified brand serving in major segments & sub segments.
While Waitrose, has positioned itself in the minds of consumers through the word of mouth &
by tying up with branded companies to position itself as upmarket store.
iii) Image of Company Tesco PLC & Waitrose
Tesco has imaged itself from huge mega stores, express stores to normal convenience stores it
has imaged itself as one stop shop. While Waitrose has improved its brand image consistently &
labeled itself as par, fresh & unique through intelligent promotional activities. Now it Waitrose
image is considered as one of the up market store.
13
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CHAPTER FIVE: COMPARATIVE RETAIL MIX
This chapter key emphasizes in the retail strategy used in comparing Tesco & Waitrose UK. It considers
all the key factors which affect it internally & externally such as business strategies, consumer
preferences, management strategies to break competition & gain more consumer database.
1. Range of Merchandize Mix
Tesco has a variety of products to offer & has diversified in the various segments & sub-
segments. It has optimally utilized & imaged itself intelligently selling all the products &
services under one roof such as
Clothing & jewelry
Technology & gaming
Health & beauty
Home electrical
Entertainment & books
Home appliances
Baby & toddler
Garden
Toys
DIY & Car accessories
On comparison with Waitrose its product mix changes as per consumer tastes and it just
concentrates on grocery, food items or non-food items. Waitrose also introduces or remove
certain products through keeping a track of the customer records & per sales unit sold of any
labeled or non branded products and then deciding whether to include or exclude it out.
14
This chapter key emphasizes in the retail strategy used in comparing Tesco & Waitrose UK. It considers
all the key factors which affect it internally & externally such as business strategies, consumer
preferences, management strategies to break competition & gain more consumer database.
1. Range of Merchandize Mix
Tesco has a variety of products to offer & has diversified in the various segments & sub-
segments. It has optimally utilized & imaged itself intelligently selling all the products &
services under one roof such as
Clothing & jewelry
Technology & gaming
Health & beauty
Home electrical
Entertainment & books
Home appliances
Baby & toddler
Garden
Toys
DIY & Car accessories
On comparison with Waitrose its product mix changes as per consumer tastes and it just
concentrates on grocery, food items or non-food items. Waitrose also introduces or remove
certain products through keeping a track of the customer records & per sales unit sold of any
labeled or non branded products and then deciding whether to include or exclude it out.
14
2. Pricing
Sine Tesco is considered as highest profitable hence it is marked pricing leader. Tesco needs to
keep its pricing as per its business strategies. Due to the high economies of scale & low operating
costs, Tesco can keep completion at bay through smart & uniformed pricing offered to
consumers. It should still lower its operating costs since it purchases at bulk from the buyers &
can negotiate in great depth. The company also uses economy pricing, psychological pricing,
product line pricing and geographic pricing strategies.
While Waitrose is better known domestically and has kept its prices stable. But judging price
wars in specific segment, location or places it needs to keep its prices at minimum or at par to
sustain competition. Sometimes due to discounts, promotions & giving club points also helps in
pricing the product intelligently. Any differential pricing or variation is only due to the various
factors involved. For example, a Waitrose store at center of London operating at higher prices as
compared to a Waitrose store in Newark. One of the factor can be due to the high operating cost ,
transporting , logistics & stocking the products can all add to the per unit cost of product.
Waitrose studies market globally and compares it with domestic & regional pricing to understand
variation in pricing due to the changed lifestyles, customer preferences, new entry into the
market & change of habits. All these factors have to be considered when Waitrose prices it
products. Within a region, segment or division Waitrose will operate at same cost & have same
pricing but if its regionally in different location it might have changed prices.
15
Sine Tesco is considered as highest profitable hence it is marked pricing leader. Tesco needs to
keep its pricing as per its business strategies. Due to the high economies of scale & low operating
costs, Tesco can keep completion at bay through smart & uniformed pricing offered to
consumers. It should still lower its operating costs since it purchases at bulk from the buyers &
can negotiate in great depth. The company also uses economy pricing, psychological pricing,
product line pricing and geographic pricing strategies.
While Waitrose is better known domestically and has kept its prices stable. But judging price
wars in specific segment, location or places it needs to keep its prices at minimum or at par to
sustain competition. Sometimes due to discounts, promotions & giving club points also helps in
pricing the product intelligently. Any differential pricing or variation is only due to the various
factors involved. For example, a Waitrose store at center of London operating at higher prices as
compared to a Waitrose store in Newark. One of the factor can be due to the high operating cost ,
transporting , logistics & stocking the products can all add to the per unit cost of product.
Waitrose studies market globally and compares it with domestic & regional pricing to understand
variation in pricing due to the changed lifestyles, customer preferences, new entry into the
market & change of habits. All these factors have to be considered when Waitrose prices it
products. Within a region, segment or division Waitrose will operate at same cost & have same
pricing but if its regionally in different location it might have changed prices.
15
3. Communications
Tesco has a strong marketing team & uses a competitive marketing communication
correspondence with peers, customers, clients & with investors. On the contrary, Waitrose needs
to have more aggressive marketing campaign for more promotion/ visibility activities & should
strengthen its communication standards as per clients and investors. Tesco is a leading food &
drink retailer with a 2,319 stores & has employed a workforce of over 325. While talking about
Waitrose, as per February 2015 sources, it holds an "upmarket" reputation & has a 350 branches
across the United Kingdom which includes 30 convenience stores.
4. Location
If the location is high crème Tesco will also include high branded products & if its located in the
regional place where there are health conscious people then it will include organic food etc.
Whereas Waitrose supply of products depends on locations & stores sq. feet. Since keeping a
huge stock may result in the less selling in a low customer centric place & similar keeping a low
stock in a high demand place will result in spoiling of brand image due to shortages in stocks.
5. Store Design & Layout
Tesco plc has opened its stores at every corner of UK has expanded itself globally as well. It
opens its new stores after been watchful of the population density and then penetrates through
promotional activities & adding new customers to the database. Certain Tesco stores are from
25,000- 140,000 sq. feet.
In comparison with Waitrose, its stores are located in south east & far north of the UK &
Newark. Some stores are located high profiled shopping areas. The average Selling Space of a
16
Tesco has a strong marketing team & uses a competitive marketing communication
correspondence with peers, customers, clients & with investors. On the contrary, Waitrose needs
to have more aggressive marketing campaign for more promotion/ visibility activities & should
strengthen its communication standards as per clients and investors. Tesco is a leading food &
drink retailer with a 2,319 stores & has employed a workforce of over 325. While talking about
Waitrose, as per February 2015 sources, it holds an "upmarket" reputation & has a 350 branches
across the United Kingdom which includes 30 convenience stores.
4. Location
If the location is high crème Tesco will also include high branded products & if its located in the
regional place where there are health conscious people then it will include organic food etc.
Whereas Waitrose supply of products depends on locations & stores sq. feet. Since keeping a
huge stock may result in the less selling in a low customer centric place & similar keeping a low
stock in a high demand place will result in spoiling of brand image due to shortages in stocks.
5. Store Design & Layout
Tesco plc has opened its stores at every corner of UK has expanded itself globally as well. It
opens its new stores after been watchful of the population density and then penetrates through
promotional activities & adding new customers to the database. Certain Tesco stores are from
25,000- 140,000 sq. feet.
In comparison with Waitrose, its stores are located in south east & far north of the UK &
Newark. Some stores are located high profiled shopping areas. The average Selling Space of a
16
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Waitrose Store is under 1500 sq. meter, which is fairly small. Stores sq. feet preferences are
between 1500- 2000 sq meters & if at good location they prefer 2500 sq metres
6. Customer Service
Guide customers proactively & prefers self-service & While Waitrose caters to customers but
prefer they should be aware about know how services. Tesco has two modes to broadcast its
products and services: online and offline. Online sales of Tesco helps in better connect with
consumers & delivering quickly. Since its easily available & accessible hence popularity is
increasing rapidly among consumers. As per stats 2014/15, Tesco’s online grocery business
captured 20 % of market. While Waitrose has also tailored its online business as per customer
requests through Waitrose Deliver, Waitrose Cellar and Waitrose Florist.
Waitrose, make a note of customer surveys & recording customer feedbacks about products &
services helps in retailers assess market needs fast & substitute outdated stuff with preferred &
adopted life styles (take away, healthy eating, alternatives food, exotic, ethnic foods of people.
The retailers utilize these feedbacks in the modification of brand, product packaging preferences
as per the consumer taste & preferences & act faster than manufactures. This helps in better
social connect with consumers while Tesco which has expanded globally and running in a larger
scale across UK includes all the products from inferior to organic to high class products all under
one roof.
17
between 1500- 2000 sq meters & if at good location they prefer 2500 sq metres
6. Customer Service
Guide customers proactively & prefers self-service & While Waitrose caters to customers but
prefer they should be aware about know how services. Tesco has two modes to broadcast its
products and services: online and offline. Online sales of Tesco helps in better connect with
consumers & delivering quickly. Since its easily available & accessible hence popularity is
increasing rapidly among consumers. As per stats 2014/15, Tesco’s online grocery business
captured 20 % of market. While Waitrose has also tailored its online business as per customer
requests through Waitrose Deliver, Waitrose Cellar and Waitrose Florist.
Waitrose, make a note of customer surveys & recording customer feedbacks about products &
services helps in retailers assess market needs fast & substitute outdated stuff with preferred &
adopted life styles (take away, healthy eating, alternatives food, exotic, ethnic foods of people.
The retailers utilize these feedbacks in the modification of brand, product packaging preferences
as per the consumer taste & preferences & act faster than manufactures. This helps in better
social connect with consumers while Tesco which has expanded globally and running in a larger
scale across UK includes all the products from inferior to organic to high class products all under
one roof.
17
CHAPTER SIX : CONCLUSION
This chapter draws conclusion in understanding the types of strategies used by Tesco or Waitrose
how they are able to compete, survive in the market & class them apart.
Among the four leading UK retailer stores comes Tesco with a 28.1% share of market & then
remaining grocery market share is shared with other three which is Sainsbury's, Asda and
Morrisons which is approximately 28% of the UK grocery market. While Waitrose comes at
sixth position & captures only a 5.1% share of the market in the UK.
Tesco PLC is a third major global general merchandising company as per its revenue & second
largest in terms of profitability. It has diversified its business into six divisions which is Tesco
Extra, Tesco Superstars, Tesco Metro, Tesco Express, One Stop and Tesco Homeplus (Tescoplc
2009). Additionally, Tesco PLC also provides online services by the name of Tesco.com which
is also its subsidiary& its other retailing services Tesco Personal Finance. Apart from the home
shop supermarket experience in grocery & food/beverages division it also utilizes its know how
services & expanded in various non-food segments such as gas stations, consumer electronics,
clothing, telecoms, financial services, health, home and car insurance, dental plans& other
miscellaneous such as CDs, music downloads, retailing and renting DVDs, software and Internet
services operating globally. While Waitrose is a food retail division of John Lewis Partnership
parent company & a sixth-largest grocery retailer in the UK with a gross sales in 2010 of
about11.3%& profitability rose to +28.0% due to the restructuring & introducing fresh patterns
in sales. (John Lewis Partnership Reports, 2010) whereas speaking about TESCO it held a 30.7%
share of the UK grocery retail market & profitability of 14.9 % in the year 2010 (Euromonitor,
2010).Waitrose optimization strategy is to that allows it to target customers with specific,
18
This chapter draws conclusion in understanding the types of strategies used by Tesco or Waitrose
how they are able to compete, survive in the market & class them apart.
Among the four leading UK retailer stores comes Tesco with a 28.1% share of market & then
remaining grocery market share is shared with other three which is Sainsbury's, Asda and
Morrisons which is approximately 28% of the UK grocery market. While Waitrose comes at
sixth position & captures only a 5.1% share of the market in the UK.
Tesco PLC is a third major global general merchandising company as per its revenue & second
largest in terms of profitability. It has diversified its business into six divisions which is Tesco
Extra, Tesco Superstars, Tesco Metro, Tesco Express, One Stop and Tesco Homeplus (Tescoplc
2009). Additionally, Tesco PLC also provides online services by the name of Tesco.com which
is also its subsidiary& its other retailing services Tesco Personal Finance. Apart from the home
shop supermarket experience in grocery & food/beverages division it also utilizes its know how
services & expanded in various non-food segments such as gas stations, consumer electronics,
clothing, telecoms, financial services, health, home and car insurance, dental plans& other
miscellaneous such as CDs, music downloads, retailing and renting DVDs, software and Internet
services operating globally. While Waitrose is a food retail division of John Lewis Partnership
parent company & a sixth-largest grocery retailer in the UK with a gross sales in 2010 of
about11.3%& profitability rose to +28.0% due to the restructuring & introducing fresh patterns
in sales. (John Lewis Partnership Reports, 2010) whereas speaking about TESCO it held a 30.7%
share of the UK grocery retail market & profitability of 14.9 % in the year 2010 (Euromonitor,
2010).Waitrose optimization strategy is to that allows it to target customers with specific,
18
tailored experiences. Waitrose also operates online business through Waitrose Deliver, Waitrose
Cellar and Waitrose Florist.
Tesco unique strategy to diversify & promote more of non food items helped it retained its
position & visibility. Also, its aggressive visual campaigning across the world helped them
capture more of market share. Risks & mitigation of risks needs to assessed beforehand&
necessary actions should be taken (Kotler et al., 2013). Major challenges are faced by the tough
competitors& to break the stereotype image one needs to retaliate to accept it just like Tesco
faces (Ruddick, 2014). Opting for alternative strategies to compete with the competitors &
diversify to sustain during economic & business downturns. Understanding strengths &
optimizing opportunities result in the strategizing & foresee barriers. (Kotler et al., 2013).SWOT
analysis, PESTLE & Porter 5 forces highlights that Tesco is well placed globally/ domestically
& stands at par with other existing competitors such as Walmart & Carrefour due to its
thoughtful planning and economic market knowledge. Penetrating market through online
shopping portals, customer & employee centric policies, introducing more friendly loyalty cards
& schemes, heavy promotional & discount activities on products and services has all resulted in
capturing a major market share globally & domestically. As per the stats, Tesco stands 2nd in
terms of profitability after Carrefour. Even during turbulent times for e.g. recession in 2008,
Tesco leadership was able to sustain the market due to the diversified strategizing, identifying
potential markets & capturing market through product/services differentiation & highlighting
uniqueness.
On the contrast, Waitrose it needs to have an aggressive marketing campaign for more
promotion & visibility activities. It has just market itself as m an upmarket, focusing on one
19
Cellar and Waitrose Florist.
Tesco unique strategy to diversify & promote more of non food items helped it retained its
position & visibility. Also, its aggressive visual campaigning across the world helped them
capture more of market share. Risks & mitigation of risks needs to assessed beforehand&
necessary actions should be taken (Kotler et al., 2013). Major challenges are faced by the tough
competitors& to break the stereotype image one needs to retaliate to accept it just like Tesco
faces (Ruddick, 2014). Opting for alternative strategies to compete with the competitors &
diversify to sustain during economic & business downturns. Understanding strengths &
optimizing opportunities result in the strategizing & foresee barriers. (Kotler et al., 2013).SWOT
analysis, PESTLE & Porter 5 forces highlights that Tesco is well placed globally/ domestically
& stands at par with other existing competitors such as Walmart & Carrefour due to its
thoughtful planning and economic market knowledge. Penetrating market through online
shopping portals, customer & employee centric policies, introducing more friendly loyalty cards
& schemes, heavy promotional & discount activities on products and services has all resulted in
capturing a major market share globally & domestically. As per the stats, Tesco stands 2nd in
terms of profitability after Carrefour. Even during turbulent times for e.g. recession in 2008,
Tesco leadership was able to sustain the market due to the diversified strategizing, identifying
potential markets & capturing market through product/services differentiation & highlighting
uniqueness.
On the contrast, Waitrose it needs to have an aggressive marketing campaign for more
promotion & visibility activities. It has just market itself as m an upmarket, focusing on one
19
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retail grocery segment & then understanding customer needs, fine tuning to the preferences of
them & delivering in accordance to expectation resulted in Waitrose growth& capturing major
revenues.
Understanding business virtues, Swot analysis &retail mix of Waitrose it was able to optimize its
costs & benefits analysis of pricing strategies adopted.
Analyzing PESTLE, Porters five forces analysis& various other parameters of Waitrose it is well
read that it should diversify more, which help in capturing more market share & should expand
in various horizons globally or domestically.
Taking customer feedbacks, fine tuning products as per the customer feedbacks, applying know
how services resulted Waitrose capturing &positioning itself as an upmarket company.
References
Brand Finance (2014). Global 500 2014: The world’s most valuable brands. Available
at:http://brandirectory.com/league_tables/table/global-500-2014 [accessed 1 September 2014].
Blythman, J. (2012). Shopped: The shocking power of British supermarkets. London:
HarperCollins.
Bunn, P. and Ellis, C. (2012). Examining the behaviour of individual UK consumer prices. The
Economic Journal, 122(558), F35-F55.
Clarke, I. (2012). Consumer satisfaction with local retail diversity in the UK: Effects of
supermarket access, brand variety and social deprivation. Doctoral dissertation, Department of
Marketing, Faculty of Business and Economics, Monash University, Australia.
Collins, R. (2010). A graphical method for exploring the business environment. Oxford
University Working Paper 956.
Felgate, M., Fearne, A. and Di Falco, S. (2011). Analysing the impact of supermarket
promotions: A case study using Tesco Clubcard data in the UK. Kent Business School. Working
Paper 234.
20
them & delivering in accordance to expectation resulted in Waitrose growth& capturing major
revenues.
Understanding business virtues, Swot analysis &retail mix of Waitrose it was able to optimize its
costs & benefits analysis of pricing strategies adopted.
Analyzing PESTLE, Porters five forces analysis& various other parameters of Waitrose it is well
read that it should diversify more, which help in capturing more market share & should expand
in various horizons globally or domestically.
Taking customer feedbacks, fine tuning products as per the customer feedbacks, applying know
how services resulted Waitrose capturing &positioning itself as an upmarket company.
References
Brand Finance (2014). Global 500 2014: The world’s most valuable brands. Available
at:http://brandirectory.com/league_tables/table/global-500-2014 [accessed 1 September 2014].
Blythman, J. (2012). Shopped: The shocking power of British supermarkets. London:
HarperCollins.
Bunn, P. and Ellis, C. (2012). Examining the behaviour of individual UK consumer prices. The
Economic Journal, 122(558), F35-F55.
Clarke, I. (2012). Consumer satisfaction with local retail diversity in the UK: Effects of
supermarket access, brand variety and social deprivation. Doctoral dissertation, Department of
Marketing, Faculty of Business and Economics, Monash University, Australia.
Collins, R. (2010). A graphical method for exploring the business environment. Oxford
University Working Paper 956.
Felgate, M., Fearne, A. and Di Falco, S. (2011). Analysing the impact of supermarket
promotions: A case study using Tesco Clubcard data in the UK. Kent Business School. Working
Paper 234.
20
Hall, J. (2011). Tesco to offer video-on-demand services. Daily Telegraph, 21st April 2011.
Koen, P.A., Bertels, H.M. and Elsum, I.R. (2011). The three faces of business model innovation:
challenges for established firms. Research-Technology Management, 54(3), 52-59.
Kotler, P., Armstrong, G., Harris, L.C. and Piercy, N.F. (2013). Principles of marketing (6th edn).
Harlow: Pearson.
Ma, Y., Ding, J. and Hong, W. (2010). Delivering customer value based on service process: The
example of Tesco.com. International Business Research, 3(2), 131.
Piercy, N.F., Cravens, D.W. and Lane, N. (2010). Marketing out of the recession: Recovery is
coming, but things will never be the same again. The Marketing Review, 10(1), 3-23.
Retail Economics (2014). Top 10 UK retailers 2013. Available
at: http://www.retaileconomics.co.uk/top-10-retailers/ [accessed 1 September 2014].
Ruddick, G. (2014). Tesco’s new chief executive handed £700m war chest. Daily
Telegraph, 29th August 2014.
Schiraldi, P., Smith, H. and Takahashi, Y. (2012). Estimating a dynamic game of spatial
competition: The case of the UK supermarket industry. LSE Working Paper.
Stevenson, T. (2014). Tesco share slide has investors catching a falling knife. Daily
Telegraph, 29thAugust 2014.
Tesco plc (2012). Preliminary results 2011/12. Cheshunt: Tesco plc.
Tesco plc (2014). Annual report 2014. Cheshunt: Tesco plc.
Thompson, C., Clarke, G., Clarke, M. and Stillwell, J. (2012). Modelling the future opportunities
for deep discount food retailing in the UK. The International Review of Retail, Distribution and
Consumer Research, 22(2), 143-170.
Wood, S. and McCarthy, D. (2014). The UK food retail ‘race for space’ and market saturation: A
contemporary review. The International Review of Retail, Distribution and Consumer Research,
24(2), 121-144.
Wood, Z. and Gibbs, S. (2014). Tesco to launch own brand smart phone. The Guardian, 7th May
2014.
21
Koen, P.A., Bertels, H.M. and Elsum, I.R. (2011). The three faces of business model innovation:
challenges for established firms. Research-Technology Management, 54(3), 52-59.
Kotler, P., Armstrong, G., Harris, L.C. and Piercy, N.F. (2013). Principles of marketing (6th edn).
Harlow: Pearson.
Ma, Y., Ding, J. and Hong, W. (2010). Delivering customer value based on service process: The
example of Tesco.com. International Business Research, 3(2), 131.
Piercy, N.F., Cravens, D.W. and Lane, N. (2010). Marketing out of the recession: Recovery is
coming, but things will never be the same again. The Marketing Review, 10(1), 3-23.
Retail Economics (2014). Top 10 UK retailers 2013. Available
at: http://www.retaileconomics.co.uk/top-10-retailers/ [accessed 1 September 2014].
Ruddick, G. (2014). Tesco’s new chief executive handed £700m war chest. Daily
Telegraph, 29th August 2014.
Schiraldi, P., Smith, H. and Takahashi, Y. (2012). Estimating a dynamic game of spatial
competition: The case of the UK supermarket industry. LSE Working Paper.
Stevenson, T. (2014). Tesco share slide has investors catching a falling knife. Daily
Telegraph, 29thAugust 2014.
Tesco plc (2012). Preliminary results 2011/12. Cheshunt: Tesco plc.
Tesco plc (2014). Annual report 2014. Cheshunt: Tesco plc.
Thompson, C., Clarke, G., Clarke, M. and Stillwell, J. (2012). Modelling the future opportunities
for deep discount food retailing in the UK. The International Review of Retail, Distribution and
Consumer Research, 22(2), 143-170.
Wood, S. and McCarthy, D. (2014). The UK food retail ‘race for space’ and market saturation: A
contemporary review. The International Review of Retail, Distribution and Consumer Research,
24(2), 121-144.
Wood, Z. and Gibbs, S. (2014). Tesco to launch own brand smart phone. The Guardian, 7th May
2014.
21
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