Report of Tesco & Waitrose Company | Marketing Mix
Added on - 18 Sep 2019
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Executive SummaryThis report covers external & internal environment, resources surrounding Tesco& WaitroseCompany. The core emphasis lies in the strategy planned& marketing mix involved keyanalyzing company’s strength & competence.Both Tesco PLC&Waitrose are the leading companies in retail segment particularly in supermarket stores especially in food & drink industry. With know how techniques of handlingresources in manufacturing, management of supplies, trained staffs which becomes importantessence of retailing industry.IntroductionAs a background Tesco is a leading food & drink retailer with a 2,319 stores & employed aworkforce 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 30convenience stores. Among the four leading UK retailer stores comes Tesco with a 28.1% shareof 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. Waitrose comes away back at sixth largest market share & capturing only a 5.1% share of the market in the UK.Tesco caters in various divisions such as it has a range of 40,000 food products which includesits own labels from normal to finest levels, independent Britain’s largest gas stations & thenother categories includes ,non-food items, clothing, etc. While, Waitrose is a biggest employeeowned operated by JLP &opts for a different market strategy with Price commitment &delivering best products to customers with a high grade quality. To optimize this strategy,Waitrose has merged convenience supermarkets with best technical service and shopmanagement.
Marketing PlanTesco PLC is a third major global general merchandising company as per its revenue & secondlargest in terms of profitability. It has diversified its business into six divisions which is TescoExtra, Tesco Superstars, Tesco Metro, Tesco Express, One Stop and Tesco Homeplus (Tescoplc2009). Additionally, Tesco PLC also provides online services by the name of Tesco.com whichis also its subsidiary& its other retailing services Tesco Personal Finance. Apart from the homeshop supermarket experience in grocery & food/beverages division it also utilizes its know howservices & expanded in various non-food segments such as gas stations, consumer electronics,clothing, telecoms, financial services, health, home and car insurance, dental plans& othermiscellaneous such as CDs, music downloads, retailing and renting DVDs, software and Internetservices operating globally. While Waitrose is a food retail division of John Lewis Partnershipparent company & a sixth-largest grocery retailer in the UK with a gross sales in 2010 ofabout11.3%& profitability rose to +28.0% due to the restructuring & introducing fresh patternsin 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,tailored experiences. Waitrose also operates online business through Waitrose Deliver, WaitroseCellar and Waitrose Florist.ObjectivesThe objective of Tesco is to expand globally & diversify, promote more of nonfoodsection/divisions, while that of Waitrose is to provide quality groceries, wine, and spirits at alower price & maintain a customer loyalty. Both the companies’ objectives are suitable as per theindividual orientation.PORTER competitive analysis for Tesco plc & WaitroseThese can be distinguished & analyzed on the basis of below points-:Threat of new entrants: New entrants in various sectors delivering products & services at acheaper prices, breaking market share of Tesco PLC.While for Waitrose it is able to sustain inthe market & capture share since it provides better crème class products & services at same priceSainsbury charge its customers. Waitrose unique essence of its product is high quality productswhich keeps it class apart from other competitor M&S.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 keeprivals at bay. (Peter & Donnelly 2002)while Waitrose competitors are M&S & Sainsbury needof middle class delivering products with freshness & crème upmarket products.Threat of substitute products:For Tesco, cheaper substitutes products are readily available in themarket while Waitrose caters to a specific domain of retail market hence levels of substitutes arequite low. For Tesco. some existing players are big & dominant in the market hence entering intoa completely new domain will result in resistance & forces. Also, if Waitrose wants to enter in anew market they should have a hands on experience & market knowledge (John Lewis, 2012).
Bargaining power of suppliers:Low specific suppliers dealing in the market & price rise ininputs result in producing products at higher costswhile for Waitrose switching to the alternativesuppliers due to cheap supply are low since margin are quite low.Bargaining power of buyers:Since companies like TESCO exists in a perfect market hence theirend products should be of same price whilefor Waitrose switching costs are readily availabledue to many options available (Davey and Laurance, 2008).ComparativeSWOT Analysis of Tesco & WaitroseA strengths, weaknesses, opportunities and threats (SWOT) analysis ofTesco&Waitrosehasbeen provided below.StrengthsTESCO caters in various divisions & sub segments & has a 4,331 stores in the USA, Europe andAsia.After Walmart & Carrefour, Tesco captures a third largest grocery retail market share in theworld (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 mainstrengthlies 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 ofconsumers & proved to be a strong competitor.myWaitrose loyalty card launch resulted in customer retention scheme.Employee strength of 1,00,000 & got appreciated with many rewards & recognition for bestquality products.WeaknessesCut 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 asthey opted for the using cheaper alternatives with high quality.