Iceland Supermarket Business Strategy Analysis

This assignment delves into the business strategies employed by Iceland supermarket, a well-known UK retailer specializing in food products. It examines the company's competitive edge through affordable pricing and skilled workforce. The report further explores how Iceland leverages social media platforms like Facebook and Twitter to understand customer needs and promote its offerings.

ICELAND supermarkets

Table of Contents
INTRODUCTION...........................................................................................................................1
Introduction of the company ......................................................................................................2
The current business strategy .....................................................................................................2
The products and services that is been provided by Iceland supermarket .................................3
The business environment, both internal and external, in which
information systems have to operate...........................................................................................3
The three primary activities in Porter's value chain ..................................................................7
The use of IT in order to improve business process....................................................................8
CONCLUSION .............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Iceland supermarket is a British supermarket chain in UK. In this company the frozen
food items such as prepared meal and vegetables are being sold out (The Iceland Story, 2017).
The non-freeze grocery items are also being sold by this company such as meat, dairy and dry
goods. In the UK this company have approximately 2.2 % share of market.
In this report an introduction abut Iceland supermarket will be given and also the
products and services that is being given by this company in UK will also be presented. The
business strategy that is bing used by company in order to expand its business will also be
shown. The pestle analysis of this company will be carried out in order to find out the impact it
has due to external environment. The three primary activities in Porter's value chain will also be
analysed in this report. Further more in order to enhance its businesses process the use of IT
technology will also be analysed.
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Introduction of the company
Iceland supermarket is a private company operating as supermarket chain in UK. It is operating
in retail industry. Iceland supermarket provides various products such as Frozen food, prepared
meals as well as vegetables. The organisation also sell non-frozen grocery goods such as produce
meat, dry and dairy products. Enterprise consist of approx 2.1 percent market share in food
industry of UK. The business was established in England during 1970.In February 2002 the
organisation was renamed as Big Food group. It has planned to develop focus on convenience
sector. Due to various circumstances in 2005 company had formed association with Icelandic
organisation. Again the enterprise was renamed as Iceland. Business entity have more than
20000 workforce working at different locations. The enterprise has earned 160 million dollar
income in 2014 (Blackburn, Hart and Wainwright, 2013).It has more than 8000 stores at various
locations. Iceland company has reintroduced online shopping. The enterprise has expanded it
supply chains through introducing new stores and purchasing of small stores. It has been
considered as most successful enterprise in UK.
The company has made major changes in its promotional strategy. The firm has adopted
the concept of buy one get one free this was common. So in order to attract customer the
marketing manager in Iceland has planned to introduce new offerings in bigger packs that could
be delivered at original price. There is modification in pricing strategy is also initiated by
enterprise. The manager in Iceland has planned to adopt clear cut price approach. Home delivery
option is included in marketing strategy in order to provide ease to customers. It has also
introduced Bonus card scheme. This strategy has allowed firm to attract customer and gain
loyalty. The sponsoring as a effective marketing technique in order to promote their brand in
market. This has allowed organisation to increase its market share and enhance growth. The
business have focus on sponsoring big event in order to become recognised as well as reputed
brand.
The current business strategy
In the earlier time Iceland was basically a frozen food based shop. But the organization is
being influenced to move into retail industry due to dramatic growth of business .And it is
competitor for other retail companies such as Tesco, Morrison and sainsbuury. In order to
acquire the market position many strategies are being devised by Iceland (Bloom and Van
Reenen, 2014.). The strategies such as developing massive range of frozen products , online
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shopping , corporate social responsibility , bonus card introduction, and with other relative
businesses it has merged and aligned. At a time these all strategies that is being made by this
company were effective but in order to meet out the future challenges the business need to pay
attention on its product and market position. The biggest strength of Iceland is that its market
leading position for delivering quality frozen products. In UK it is its biggest strength. So, the
strategy is that to continue develop its product and services and at an affordable price its
products and serveries are been sold out to customers. This will also help the company to gain
competitive advantage from rival companies.
The products and services that is been provided by Iceland supermarket
This company provide frozen food products and it has big market in UK. In the year
2003, 2004 Iceland was awarded as the top frozen food retailers. In that filed till 2011 they are
considered as the market leader. At affordable prices this company delivers food products. A
good at is made by Iceland in order to retains its customers through bonus cards. This company
also provide its customers with services to shop online .The customers service is also available
where any query related to this company can be made or the customers they can ask questions
regarding particular product. This company also provides with home-made delivery facilities for
its customer. The products such fruits , vegetables , frozen fish is offered by this supermarket for
its customers around the world (Leonidou and Katsikeas, 2015).
The business environment, both internal and external, in which
information systems have to operate.
SWOT
Strength:
 The company is operating in domestic
market.
 Organization is providing wide range of
products.
 Talented and skilled employees.
 It is recognized for delivering pure and
quality products.
 Organization has strong relationship
with suppliers .
Weaknesses:
 Iceland is operating on small scale.
 Ineffective marketing strategy.
 Totally dependent on domestic market
for generating profit and revenue.
 The structure of organization is critical.
 The company is still dependent on
traditional technology for its production
activities.
 It does not have focus on operational
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 Development of websites has allowed
business entity to reach wide number of
customer.
 High industry growth rate.
 High comparability with other
companies dealing in same industry.
 It has strong and big supply chain in
UK.
processes.
Opportunities
 Iceland has opportunities to enter into
new market.
 The company has chance and potential
to enter into market.
 Expansion of core business activities.
 New trends can provide firm an
opportunity to increase its market
share.
 It can conduct joint ventures or
partnership with bother firm in order to
expand business.
 Formulation of unique strategy or
product can assist organization in
discriminating its products from that of
its competitor and provided company
an opportunity to gain competitive
advantage.
 Adoption of advance technology will
help enterprise in product
development(Lloyd, 2017).
Threats
 Increase in level of competition.
 Bargaining power of suppliers.
 High bargaining power of customers.
 Lower profitability.
 Increase in cost of production.
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Pestle analysis
These techniques can be used by Iceland in order to analyses the market situation and
analyzing various business trends. This method will allow firm to identify effect of various
factors on its business operations. The various external factors are Political factors, economic,
social, technological, legal and environmental variables. All these variables have great effect on
the growth and success of firm.
Political factors-The political situation In UK is stable as such so there is less effect of these
factors on the Iceland supermarket. But various other factors such as unemployment, increase in
competition, and inflation has forced political parties to form stiff rules and code of conduct for
various industries. This thing can have great impact on the various Business activities of Iceland.
These variables have much influence on the planning and various strategies of firm. As presently
there has been decrease in tax rate which has positive impact on Iceland. It has provided
company an opportunity to lower the prices of its products and increase its profit margin.
Economic factors-This factors have great effect on financial performance of Iceland. It also has
great impact on the purchasing and selling power of organisation. It can be major challenge for
firm to maintain balance between demand and supply due to economic impact.
Social factors-These factors have great impact on the profitability and growth of organisation.
Social elements can become create challenge for enterprise in order to identify the need and
demand of their customers as their choice, taste and preference changes with the trend and
passage of time (Mohajeri and Xiong, 2014).
Technological factors-This has allowed Iceland to improve their quality of goods and services. It
has provided organization an opportunity to reach wide number of consumers, analyse their
needs as well as demands. Technological variables has enabled firm to promote their brands
using effective advertising media and communicate their objectives. With the support of these
constituents the company can able to provide additional facilities and services to its customers.
Legal factors-Legal factors includes various policies and laws that are framed by government.
Employment law may have great impact on the human resource management practices in Iceland
company. As it is dealing in supermarket which has long working hours and employees are
generally provided with lower ways. These variables can lead to increase in employee turnover
rate. It is required by company to comply with such laws in order to avoid legal obligations.
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Environmental factors-The constituents has great effect on the competencies and competitive
strength of business. The environmental elements include competitive environment, weather and
climatic conditions. It is required by Iceland supermarket to adopt effective strategy such as
innovation,. Product development and low cost pricing etc. These constituents also have great
effect on the quality of products and services (Shabani and Sowlati, 2013).
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The three primary activities in Porter's value chain
The organization carries out a set of activities in a value chain model in order to crate a
value for its customers. In order to analyse all of their activities the companies such as Iceland
supermarket can make use of porter value chain. The cost is determined when the value chain
activities are performed. The source value for organization can be understand from this model.
Inbound logistics – In the production process they are the process in which the raw materials
are being received, stored and distributed. The relationship between companies and their
suppliers are the concern of the inbound side. Everything that is been covered from suppliers is
covered in the inbound logistics . The tools, office equipments , raw materials etc are been
included in it. Iceland supermarket can use this in order to store, and distribute its raw materials.
These raw materials are supplied by the suppliers to the company(Bloom and Van Reenen,
2014.).
Operation – During this stage the raw materials are being converted into final product. In this
step the company can transform the war materials that had been supplied by the suppliers and
convert them into final products such as frozen products etc.
Outbound logistics – In this the company will be able to distributed product to its customers. The
outbound side the company gets products for its customers. Once the preparation of the products
is dome the company will able to sell out its product in the market and its store. Iceland company
also provide online shopping for its customers so they can also shop online for these products.
Marketing and sales – In this in order to target a particular group of customers the company will
do promotions .This promotion can be done by company by using various social media sites such
as Facebook, twitter and blogs etc. The company can also use its website in order to make people
aware about the products and services that is been given by this company. The advertisements
are also done by the company. The company Iceland supermarket can use various platforms in
order to promote its food products in the target market. Thy can make use of advertisements,
their company websites etc.
Service – In order to maintain the performance of product after it had been manufactures this
will performance the activities that will be needed. The installation , training , maintenance etc
are been included in this.
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Support activities The support to primary activities is been given from these activities .For an
instance with certain activities' procurement supports operation .
Procurement – In order to get resources that they need to operate the organization will purchase
it. The vendors are found and negotiation is been done in order to get that resources at n
reasonable and best price. Iceland supermarket need to select their vendors properly keeping in
mind their cost and quality.
Human resource management – The various function are been performance by human resource
in the organization. Through this organization hire ,appoint , rewards, motivate and retain its
workers and employees that are working in the organisation. With good HR practices the
businesses can create a clear advantage. By using this the company will motivate and encourage
its employees for their good performance and work. The company hire and recruit new
employees through HRM and training is given to employees that are been selected in order to
make them aware about the company. This company also provided reward to its employed for
their good work and both intrinsic and extrinsic reward are been given
Technological development – In this the information is being processed and managed And the
knowledge base of company is also protected .The information technology cost is minimized,
and the current advance technology is being used.
The use of IT in order to improve business process.
The company can make use of IT in order to achieve more growth in their business
process and also to gain more competitive advantage from rival companies such as tesco .In
order to maintain the records of customer that are visiting their store and also the employees that
are being working in the company .Iceland supermarket can make use of cloud-computing
storage. As all the necessary information that is related to customer and the employees will e
stored on the cloud. By using this the company can save a lot of their time as data updation is
automatic and also there are no issues of backup as all information is stored on cloud. In
comparison, with traditional methods that is been used for storing records and information
cloud storage will be a more secure and in case of any fire or theft all the data will be protected.
This company can also save their cost as implementation of cloud is not so costly. The only need
of cloud-storage is internet access. So at any time and at any place the company can access the
information. In a way the business will be improved by using cloud -storage (Bloom and Van
Reenen, 2014.).
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In order to increases their sells and target of market the company can also make use of
social website such as Facebook, twitter etc. By using these site the company will be stay
committed to the customers and they will also get to know about the likes and dislikes of
particular customers. By making a page on Facebook the company and also provide details about
the services that is been provided by them (Bharadwaj and Venkatraman, 2013). The customers
can click on like button and these ways the company can increase the number of customers. The
company will also be able to develop innovative products as per the needs of customers .the
artificial intelligence can be used by this company by which Iceland company can analyse the
perception of the customers.
The company can also make use of CCTV surveillance , RFID system, hand held
devices and communication technology in order to connect their stores. In the electronic point of
sale can be used (Audet, Squires and Doty, 2014). The keyboards, digital display and a scanners
in there in EPOS. The bar-code, set of sales , a credit and debit card reader will read by these
scanners. For online shopping this company can make use of digital image to its full potential
and multiple images , video content etc can be introduced in it .This will make the online
shopping more visually appealing for customers. The company can also make use of new in-
house Mobile payment app. Many companies such as tesco are using their own mobile payment
app. This will be effective for both company and its customers. The customers will be able to
download this app on their phone and when doing everyday shopping this app can be used. The
company can also make their only shopping sites more attractive by updating it son a regular
basis. As the first impression of the company will be made by seeing the company's website. So,
the company need to provide specific and accurate detail about product and services that is been
offered by the company.
In order to improve Iceland supermarket distribution service the company can make use
of mobile technology such as cell phone , laptops etc .This will give the power to customers to
select the product through their phone. The facilities of online shopping and home delivery is
been given by the company. The company can also have its self- service checkout points that
will provide convenience for customers. When the website that is loading slowly is quite
frustrating for the customers. So, the company need to make fast- loading sites by using more
text and less graphics. In order to reduced graphic size the company can make use of web
graphics optimizer (Agha, 2014).This will also maintain the quality of image. The colour
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schemes that is used for the sites need to be good so that customers will show the inters in the
site. There are many technologies that is use by the companies for promoting their products on
the better platform so that they can retain in the market for longer period. IT consulting services
are the best as this will definitely help the Iceland supermarket in promoting their product at the
best possible level. It is a supermarket that deals in the foods so it needs the perfect promotion
medium for its base success and in this IT consultancy service will provide the best platform to
promote the food product of this supermarket.
CONCLUSION
Thus summing up the above report that Iceland supermarket provides with food item
product in UK and it is a well-known company. The business strategy that is been used by this
company is to sell out its food products at reasonable price to its customers. The strength of this
company is that talented and skilled employees are working in this organization. The company
can make use of social websites such as Facebook, twitter in order to find out the needs of
customers.
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REFERENCES
Books and journals
Agha, L., 2014. The effects of health information technology on the costs and quality of medical
care. Journal of health economics. 34. pp.19-30.
Audet, A.M., Squires, D. and Doty, M.M., 2014. Where are we on the diffusion curve? Trends
and drivers of primary care physicians' use of health information technology. Health
services research. 49(1pt2). pp.347-360.
Bharadwaj, A. and Venkatraman, N.V., 2013. Digital business strategy: toward a next generation
of insights.
Blackburn, R.A., Hart, M. and Wainwright, T., 2013. Small business performance: business,
strategy and owner-manager characteristics. Journal of small business and enterprise
development. 20(1). pp.8-27.
Bloom, N. and Van Reenen, J., 2014. The distinct effects of information technology and
communication technology on firm organization. Management Science. 60(12). pp.2859-
2885.
Leonidou, L.C. and Katsikeas, C.S., 2015. Environmentally friendly export business strategy: Its
determinants and effects on competitive advantage and performance. International
Business Review. 24(5). pp.798-811.
Lloyd, I., 2017. Information technology law. Oxford University Press.
Mohajeri, B. and Xiong, G., 2014, October. The impact of social manufacturing on the value
chain model in the apparel industry. In Service Operations and Logistics, and Informatics
(SOLI), 2014 IEEE International Conference on (pp. 378-381). IEEE.
Shabani, N. and Sowlati, T., 2013. A mixed integer non-linear programming model for tactical
value chain optimization of a wood biomass power plant. Applied Energy. 104. pp.353-
361.
Online
The Iceland Story. 2017. [Online] Available through:
<http://about.iceland.co.uk/about-iceland/the-iceland-story/>.
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