Waitrose Expansion in Nepal: Market Analysis and PESTLE Factors

The report provides an analysis of Waitrose's potential expansion in Nepal, identifying various external factors that could impact its business activities. These factors include political, social, and legal considerations. Additionally, the report uses Porter's Five Forces approach to understand the competitive landscape and assess the potential impact of competitors on a new venture. Statistical data is presented to support the findings.

Business Organisations and
Environments in a Global
Context

Table of Contents
INTRODUCTION...........................................................................................................................1
Main body........................................................................................................................................1
Information on Waitrose.............................................................................................................1
Discussion of the allocated business environment......................................................................3
Application of an appropriate analytical approach ....................................................................5
Use and application of appropriate data......................................................................................7
Conclusion.......................................................................................................................................8
REFERENCES................................................................................................................................9
.......................................................................................................................................................11

INTRODUCTION
Globalisation is a process through which companies start and develop their international
business and start operating on worldwide scale. Here this present report will be prepared on
Waitrose which is planning to expand its chain of supermarket in Nepal. Waitrose is a chain of
British Supermarkets whose headquarter is in United Kingdom. Organisation has many stores all
around the United Kingdom. Establishment was founded in the year 1904 which is now the sixth
largest retailer of groceries in United Kingdom. In this present report background of the
company and its objective will be covered. In addition to this, Analytical tools will be used to
determine the business environment. Competition will also be discussed in brief that will be
faced by Company while starting business in Nepal. Furthermore, Different analytical data and
statical charts will be presented to understand data more clearly.
Main body
Information on Waitrose
Name of the selected organisation: Waitrose
Allocated country: Nepal
Objective: Waitrose has an objective of starting chain of supermarket in Nepal. Company has
major aim of increasing its sales by the end of the financial year. It has focused on analysing the
environment of Nepal so that it can determine the needs and wants along with culture and
believes of people (Kirton and Trebilcock, 2017). Major objectives of Waitrose is to expand its
business in developing nation along with that it also aims for giving employment to the people of
the country.
Like every other company Waitrose is also planning of increasing its profits and growth
of the organisation. To meet the same it is aiming to open chain of supermarket in Nepal.
Background of Waitrose
Year of establishment Waitrose was founded in the year 1904.
Products and services Waitrose is a chain of supermarket of food. Fresh vegetables, Wines,
essential items required in Kitchen, etc.
Location of
Headquarter
Waitrose has its head office is in Wallace, Berkshire, United
Kingdom.
Income of Waitrose As per the recent data, Waitrose operating income was £173.5
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million with the net income of £123.3 million.
Revenue of Waitrose The chain of supermarket has annual revenue of £5400.4 million.
Major competitors Those organisations which deals in variety of products in retail
industry are the major competitor of Waitrose. TESCO, Walmart,
Asda and Morrisons are the biggest competitor of Waitrose.
Results As per the latest survey Waitrose has become successful by 71% in
store sales whereas, it made it sales up to 74% through its online
website.
Background of Nepal
Continent Asia
Neighbour countries India, Tibet and china are the neighbour countries of Nepal
Population size As per the recent data, 2.93 Billion is the population of Nepal.
Gross domestic
product
2447.2 USD is the Gross domestic product of Nepal.
Inflation rate 4.20% was recorded in august 2018.
Unemployment rate In 2017 it has decreased from 3.40% to 3.20%.
Important sectors of
the economy of Nepal
There are different economy in every country. In Nepal, there are
different sectors in which services is the most important sector.
Agriculture – 35%
Industry- 20%
Services contributes 45% to the economy.
Background of Nepal will help the company in knowing about the growth and size of market.
Population will help in determining about the number of supermarkets company can establish in
a city. As population size of Nepal is low so it will be a bad decision if organisation comes with
a plan of opening more number of its ventures in the country (Lasserre, 2017). It will increase
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the cost of the company. So population is one of the major factor that needs to be considered
before opening new venture in any country.
On the other hand, Inflation rate is also the most important factor that should be
considered while planning for opening business in any new country (Inflation rate of Nepal,
2018). As if any nation inflation rate will be high then purchasing power of people will be low.
So due to low purchasing power business of the company will get affected. That is why inflation
rate is a major factor that is to be kept in mind and policies should be made accordingly.
Discussion of the allocated business environment
PESTLE Analysis
This is a way of knowing about the external factors that will affect the business and its
functioning. All these factors are explained below in detail.
Political factors
Nepal is considered to be the most stable country for expansion as it is a developing
country. Waitrose is planning to expand its business in Nepal where it will help the company in
political terms. On the other hand, the country has sometimes very unstable political state which
is not at all predictable. It affects all the businesses that are running in the nation. Like while
having any strike of supermarket all the organisation needs to close their business. In Nepal
sometimes strike can last for more than a week as well (DelGiudice, Carayannis and Maggioni,
2017). So malls will be closed for long time and business gets affected to a great extent.
Waitrose should consider this factor as the most important because it will result in affecting the
sales and profits of the company. Nepal has unorganized political sector which will make tough
for Waitrose in carrying out its business plans. Due to increasing inflation rate in the country it is
tough for people to increase their purchasing power. So Waitrose should make flexible policies
and procedures in order to deal with such fluctuating political conditions.
Economic factors
These factors are the most important which affects the business in great way. Economic
growth means people have good purchasing power and they will spend more on shopping. The
purchasing power of people of Nepal is low due to higher inflation rate and many other factors.
Unemployment in the nation is also a factor of low shopping trends. People of Nepal think and
make their budgets before spending (Leonov and et.al., 2018). But every company has to make
money in order to grow in long run. So Waitrose should launch its products at low prices so that
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it can be affordable by consumers. Overcrowding in city like Kathmandu will make people
switch to different supermarket if prices will be affordable. Waitrose should make customer
friendly policies and focus on customer satisfaction by delivering the best quality products. It
will help the company in expansion of business in country like Nepal where economic condition
are adverse.
Social factors
Nepal is a country of traditional phase where environment is composed of values, beliefs
and culture. Waitrose should understand the culture of Nepal and should make a detail study on
trends that prevail in the country before making its policies and procedures. In addition to this,
Waitrose should change the perception of people about the prices that prevail in supermarket.
People of Nepal have the thinking that supermarket always have prices of products. Waitrose is
trying to socialise with citizens of Nepal and trying to satisfy their needs.
Technical factors
Nepal is a developing country where there are not high technological systems.
Supermarkets and other companies does not have yet came up with higher innovative ideas. So
Waitrose should plan to come with higher technology so that it can sustain in market for long
term. As new and innovative ideas will help in attracting maximum number of people. Everyone
these days get easily attracted towards new technology (PESTLE Analysis, 2017). This will give
a way to the company in covering maximum number of people. Technology is something that
makes it easy to carry out processes in running the business. So Waitrose should plan its
development process before entering in to the market of Nepal.
Legal factors
While establishing a new venture in a country every company should go through the legal
proceedings. Each country have their own laws and regulations which are to be followed by
home countries as well as multi national company. Labour laws of Nepal along with other laws
are to be followed by Waitrose. General regulations are to be followed by company in order to
work more specifically and properly. Legal process regarding imports and exports should also be
followed by organisation in order to make the process and work smoothly. Businesses are run
always as per the law of the country. Nepal also have their own rules and regulations which must
be followed by Waitrose before starting the chain of supermarket in the country.
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Environmental factors
Waitrose should try to be more eco friendly in terms of every aspect. Company should
try to be more eco friendly so that it will make consumers more satisfied. In Nepal it is always
being followed by people to dispose off waste at its proper place (Murray, Skene and Haynes,
2017). So, Waitrose should keep this mind while making environmental policies that it keep the
nature clean. Along with that all policies followed by the organisation must be such that it
prevents eco system of Nepal. It is the duty if every citizen of the nation to keep their country
clean. But When a Multi national company establishes its business than it is the duty of the
organisation to run business in most eco friendly manner. Waitrose is also planning of increasing
its profits and growth of the organisation. It already has many stores all around the United
Kingdom. To meet the same it is aiming to open chain of supermarket in Nepal. This keeps the
environment clean and make people happy about the fact that organisation follow all the rules
and regulations of the Country. Every company has the duty of keeping environment clean by
using eco friendly ways of production (DelGiudice, Carayannis and Maggioni, 2017). Waitrose
should keep in mind that it complies with all such applicable factors and does not make any harm
to the environment.
Application of an appropriate analytical approach
Porter's Five Forces Analysis
It is an analysis of the structure of the industry in order to find the effective ways of
competitive advantage. So to determine the competitive environment of Waitrose, porter's five
has been carried out to know the same. Waitrose needs to consider all these factors for effective
functioning of its business activities.
Threat of substitute products and services:
In grocery retail market threat for food items is low as in comparison to non food items. In retail
market, small shops of food items and groceries will not be a threat for Big company like
Waitrose (Jia, Guo and Barnes, 2017). Waitrose already offers wide range of products which
makes it irrelevant for the company to be in threat of substitute products. In addition to this, This
company already offers high quality products at reasonable price. Waitrose can meet the threat of
substitute of non food items by giving the best quality services to Citizens of Nepal. Threat can
also be met by understanding the needs of consumers and deal with them accordingly. This will
help Waitrose in establishing and running with success in Nepal.
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Threat of Entry of New competitors
Threat of entering new company is low because it requires higher capital investment to
establish business in new country. In addition to this, Waitrose is planning for opening a new
venture in Nepal where threat to new entry is comparatively less. Although if any home company
in Nepal will try to expand its business in retail industry (Foreign Direct investment of Nepal,
2018). It will not affect much to Waitrose because it has enough capital and other aspects to give
a tough competition to the other companies. Technology is something that makes it easy to carry
out processes in running the business. So Waitrose should plan its development process before
entering in to the market of Nepal. Waitrose can tackle threat of new entrants by way of coming
up with innovative product is that it can attract maximum number of customers.
Bargaining Power of Buyers
It is comparatively high because products slightly differ so it gives a reason for buyer to
switch. Waitrose should make such offers and discounting policies that buyer will not switch
easily to other brand. Online shopping makes very easy for people to compare prices and select
accordingly. So Waitrose should offer products at comparatively low prices so that it can start at
low pricing in Nepal. This will attract consumers and give a grand entry to the company in
Nepal. As while making entry in any country company needs to bring something different so that
people can look at what new has come. This will allow the company to establish in the nation.
Bargaining power of Suppliers
It is low because every supplier wants to get deal with big companies like TESCO, Asda,
Waitrose etc. Even suppliers decreases prices for big companies as they purchase in large
quantity. In retail field high negotiation skills are required so that it can take out prices from
companies (Hazen and et.al., 2018). Waitrose is planning for opening venture in Nepal where it
should come with low prices and that is possible only by way of building efficient supply chain
with many suppliers. Suppliers always try to get connected with such big companies so Waitrose
has to deal with them in easy way. This will reduce the cost of the company and lowering the
prices will help in giving competition to already existing market of Nepal.
Rivalry among existing competitors
In a country like Nepal there are many small retailers which covers large market of the
nation. Due to higher competition among existing firms it is easy for Waitrose to launch its
ventures. As due to the immense competition between the firms it will lower down the prices of
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the products (Kew and Stredwick, 2017). Waitrose is planning to merge its business with small
retailers of Nepal. So that such collaborations will increase the market size and thus it will make
entry easy for the company. In addition to this, Competition can also be met by offering different
schemes and discount offers so that it will attract maximum number of people. Company should
make such policies which makes it different from its competitors. This will make an easy entry
and expansion of business in country like Nepal.
Use and application of appropriate data
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Illustration 1: Foreign Direct investment of Nepal
(Source: Foreign Direct investment of Nepal, 2018)

Conclusion
From the above report it has been summarised that Waitrose is growing chain of
supermarkets which needs to expand its business in various markets or countries. This study
identified that there are various external factors in a business environment. These factors such as
Political, social and legal etc. that affects the activities and function performed by any business
to achieve its organisational goals. In order to expand its market in Nepal, Waitrose needs to
examine and consider all these factors for effective functioning of its business activities.
Furthermore, the report described various influencing elements through porter's five forces
approach that helps in knowing about the competitors and their impact on new venture. In
addition to this, Various statistical data has also been presented for knowing the different facts
and figures.
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Illustration 2: Inflation rate of Nepal
(Source: Inflation rate of Nepal, 2018)

REFERENCES
Books and journals
Kirton, J.J. and Trebilcock, M.J., 2017. Hard choices, soft law: Voluntary standards in global
trade, environment and social governance. Routledge.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Del Giudice, M., Carayannis, E.G. and Maggioni, V., 2017. Global knowledge intensive
enterprises and international technology transfer: emerging perspectives from a
quadruple helix environment. The Journal of Technology Transfer, 42(2), pp.229-235.
Murray, A., Skene, K. and Haynes, K., 2017. The circular economy: An interdisciplinary
exploration of the concept and application in a global context. Journal of Business
Ethics, 140(3), pp.369-380.
Jia, Q., Guo, Y. and Barnes, S.J., 2017. Enterprise 2.0 post-adoption: Extending the
information system continuance model based on the technology-Organization-
environment framework. Computers in Human Behavior, 67, pp.95-105.
Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context.
Kogan Page Publishers.
Hazen, B.T. And et.al., 2018. Back in business: Operations research in support of big data
analytics for operations and supply chain management. Annals of Operations
Research, 270(1-2), pp.201-211.
Leonov, P.Y. And et.al., 2018. The Use of Analytical Tools in the Conduct of Internal
Control Procedures. KnE Engineering, 3(6), pp.18-23.
Online:
PESTLE Analysis. 2017. Online. Accessed through.
<https://www.marketresearchreports.com/countries/nepal>.
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