Business Strategy Report: Marketing Analysis of Iceland Supermarket

This report provides a comprehensive analysis of Iceland Supermarket's business strategy. It begins with an introduction to marketing management and its importance for organizational success. Task 1 delves into the internal and external environments of Iceland Supermarket, utilizing SWOT and PESTLE analyses to identify strengths, weaknesses, opportunities, and threats. Task 2 summarizes the SWOT analysis, highlighting key findings. Task 3 identifies a significant marketing opportunity for Iceland Supermarket: expanding into emerging retail markets. The report emphasizes the increasing demand for frozen foods and the growth of organized retailing in developing countries. The report also discusses the company's revenue and financial aspects. The conclusion summarizes the key findings and recommendations for Iceland Supermarket's strategic development.

Business Strategy
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TABLE OF CONTENTS
INTRODUCTION ...............................................................................................................................3
TASK 1: INTERNAL AND EXTERNAL ENVIRONMENT OF ICELAND SUPERMARKET......3
TASK 2 : SWOT ANALYSIS ON ICELAND SUPERMARKET.......................................................6
TASK 3: IDENTIFIED MAREKTING OPPORTUNITY ..................................................................8
TASK 4 : ICELAND SUPERMARKET REVENUE.........................................................................11
CONCLUSION..................................................................................................................................12
REFERENCES...................................................................................................................................13
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INTRODUCTION
Marketing management comprises of functions and activities of distributing commodities. It
is a combination of planning, analysing, executing and controlling elements which are designed to
achieve the organization objectives. It is a business process to manage different marketing activities
in both non-profit and profit organizations at various management levels (Kotler and Keller, 2012).
For taking the appropriate marketing management decisions, it is important to have deep knowledge
about marketing functions and its applications. It delivers benefits to both service users and service
providers. For a company, some share of success depends on effective marketing management
because it is a source of income and revenue for the business. On the other hand, marketing
management includes different functions such as selling, purchasing, transportation, warehouse etc.
These all activities are performed by large number of group or individual people. So, it creates
opportunities of employment in community and raise standard of living. The present study focuses
on marketing management and to understand its role within the organization, Iceland Supermarket
is taking into the consideration. The objectives which will be cover in research are market
environment audit, marketing opportunities, forecasting of revenue, cash flow and profit
contribution and many other things.
TASK 1: INTERNAL AND EXTERNAL ENVIRONMENT OF ICELAND
SUPERMARKET
For creating a good and successful business strategy, company needs to analyse external and
internal environment. This assessment process shows about different factors that affect the business
activities and other operations either in a positive or negative manner. Internal environment of any
company includes the factors which are useful for the organizational growth. In order to know about
the internal business environment, managers uses SWOT analysis technique (Parasuraman, 2006).
This technique explains the major strengths, weaknesses, threats and opportunities in the context of
organization. It delivers information to the organization which helps management to match its
existing resources and capabilities with the competitive environment in which they are currently
operating its business. On the other hand, PESTLE analysis is used to analyse the external
environment where company is conducting its business operation or planning to launch a new
service or commodity (Craig and Campbell, 2012). It is known as a backbone of enterprise because
it helps in the formulation of different business strategies to achieve aim and objectives.
SWOT analysis on Iceland supermarket
Iceland is a British firm which sells out frozen fruit and vegetables in all over the world.
This company also provides dry raw materials for frozen meals. This firm has approximately 1.8%
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shares of UK food market.
 Strengths- Iceland supermarket is different from others because it is providing good and
pure quality meat with the availability of hygienic packing. The main strength of the
company is good brand image in all over the world because its products are 100% pure and
fresh (Morgan, 2014). With the impact of good goodwill in the market, company can easily
launch the new product. Sales and distribution network of supermarket is strong so
costumers easily get products through home delivery. By applying all the strategies,
supermarket increases its level of profit (Pride and et. al., 2012).
 Weaknesses- The main weakness of Island supermarket is that its product cost is so
expensive. Therefore, all kinds of people are not able to purchase it. This company is located
in Britain and as per the research, consumers are afraid to try new products. Financial status
of the organization is week; so investors are less interested to purchase the shares of
company. Further, some factors like tax format, high shipping cost, taste of the frozen
products also create negative impact on the growth of organization (Williams, 2012).
 Opportunities- Recently, Company has opened approximately 1250 retail stores in all over
the world, so it creates high purchasing power for the business. In the present time, demand
of the frozen foods in all over the world is increasing. The reason for it is that all products
are not easily available in all the season . So, trend of frozen food within the people is at
rising stage (Whitwell, 2001). Along with this, in developing nations, retail market is at
emerging stage. People want all the goods and services at a single roof. So, it is a big
opportunity for Iceland Supermarket to expand its business at international level, especially
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Illustration 1: SWOT Analysis
Source: (What is SWOT Analysis and How to do it?, 2015)

in developing countries. On the other hand, it is also a great opportunity for the
organization to popularize it as a sustainable business by ensuring the safety of environment.
The result of this, company has chanced the packaging material for frozen food as well as
grocery items to reduce its environmental impacts. These materials can be recycled again
and again.
 Threats- Unemployment is the major reason for slowing down the growth of company, so it
is increasing the cost in every department. Sometimes, unexpected problems like bad
weather put an impact on fishing and quality of raw materials. Now days, competition is
growing fast and due to this, Iceland supermarket’s profit is reducing. It is a major risk that
is facing by the company at present time (Whitwell, 2001). On the other hand, threat of new
entrants in retail market has also emerged as a fear for Iceland Supermarket.
PESTLE is used for understanding the external environment of organization. It describes
information about various macro environmental factors. It is important for the growth and decision
making process of company (Saxena, 2010).
PESTLE on Iceland supermarket-
 Political factor- Iceland supermarket is a worldwide frozen firm so, during import and
export, political issues like tax rate, legislations, and government policies put its impacts on
the company’s growth. In the UK, unemployment rate is high so, government tries to open
some more supermarkets in the country. By this, people can easily get the job and it will
reduce the unemployment rate (Giligan and Wilson, 2012). Every company has to follow all
the government rules related to the business expansion. For example, if Iceland supermarket
launches new food item then company has to follow all the guidelines that can be either
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Illustration 2: PESTLE Analysis
(Sources :Marketing Theories – PESTLE Analysis, 2016)

related to mention the details of all food ingredients on the packaging or pay right amount of
wages to the employees.
 Economical factor- Demand and supply, cost of the product, profit and prices etc. come in
economic factors. Iceland supermarket deals in food items and production of such items is
based on the economy condition as volatility in demand and supply leads to influence the
level of production. . After all these economic factors also put impacts on the price decision
making process. UK condition is not so good; therefore company cannot put their product
price so high. Further, people do not have enough purchasing power (Loyka, 2007).
 Social factors- These factors include population, culture and religion. Iceland supermarket
follows social factors and takes customer’s preference in the mind. For their new product,
they takes feedback from the customers and by doing this, company easily knows about the
demand and taste of customers. As per the customer’s feedback, they plan their new product
design, price and quality. Company also provides diversification in goods because it puts a
positive impact on sales (Keegan, 2002).
 Technological factors- Iceland always tries to adopt new technologies for the better
development. Company recently introduces new facilities for home delivery and by this,
they are increasing the number of customers. In supermarket, employees use Self-service
because it reduces the labour cost and provides more convenience for the customers.
Company creates or uses online marketing system for more profit and also increases the
level of promotion (Craig and Campbell, 2012).
 Environment factors- Now a days, company is affected by the environment factors. Iceland
super market move towards the sustainable business to reduce the its different business
operational impact on environment . During the process of dry food production, lots of
waste material exit. So, company recycles the waste material and uses in bio gas production
(Cravens and Piercy, 2008).
 Legal factors- In these factors, company has to follow all the legal rules developed by the
government of various countries. Firm has to follow various legislations related to customer
law, production law as well as health and safety related laws. In all these laws, all guidelines
are given by the authorized person. e The legal factors of conducting different business
operations for Iceland Supermarkets is very clear . They provide a proper training to the
employees related to work. (Craft and Hassan, 2015).
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TASK 2: SWOT ANALYSIS ON ICELAND SUPERMARKET
Summarized information about strengths, weaknesses, opportunities and threats of Iceland
Supermarket is depicted in the below table.
STRENGTH
 Iceland supermarket is having large
market share in UK retail market .
 .
 Costs of raw materials are cheap.
 Diversification in products.
 Excellent brand image in all over the
world (Cravens and Piercy, 2008).
WEAKNESS
 Product making cost and shipping cost
are very high.
 Increase investment in research and
development
 Unable to compete with large rival
firms
OPPORTUNITIES
 Growth in demand.
 Investment and development in new
stores.
 Change in product packaging styles.
 Achieve sustainable business.
 Business expansion on emerging markets.
THREATS
 High rate of unemployment.
 Comparative market in the Iceland.
 Dependant of fish market on the
weather.
 Shipping cost is very high in the UK.
 Product producing rate is very
expensive due to government
interference (Hollensen, 2015).
Major opportunity for Iceland Supermarket with justification
As per the SWOT analysis, major opportunity for Iceland supermarket is business expansion
in the emerging markets. Company recently opens approximately 1250 new stores in the UK and
main reason behind this is related to reduce the rate of unemployment (Goodman, 2005). Along
with this, it increases demand of products and services so company can easily earn more profit.
With the help of new stores, people get employment. Iceland supermarket is always ready to grab
all the opportunities so for this they can change their product packaging styles . The main reason
behind this is that people of the UK want something new with innovative ideas. The main reason of
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high prices of product is the frozen items of company are 100% pure and good for health (De
Mooij, 2013).
. The main reason behind this is that all the products of company are frozen. On the other hand,
number of workers who are working in Iceland supermarket is also high.
TASK 3: IDENTIFIED MAREKTING OPPORTUNITY
Marketing opportunity can be defined as a newly generated want, need, trend or demand in
the market which is taken as an advantage by the organization to enhance the level of its market
position. In other words, it can be said that it is a situation where a company try to accomplish the
needs of unsatisfied end users before its competitors. Marketing opportunity is a tool that helps in
accessing its attractiveness of opportunity for a business. It is a part of strategy or business planning
process where a company analyses the market to determine the availability of profit and loss for a
new product before launching it into a market place (Helsen, 2014).
Generally, marketing opportunity is determined from the external environment analysis. It
can be either product/service or market opportunity. It helps the enterprise to find most profitable
market segment, rate of opportunity of growth etc. In the case of Iceland Supermarket, an external
environment analysis has been conducted in the previous section. From the assessment, it has been
found that one important marketing opportunity for the company is to expand business in those
nations where retail marketing is at emerging stage. The reason of taking this chance into
consideration is due to increase the needs and demands of customers in developing countries. Trend
of organized retailing in these nations are also accelerating with high speed (Ferrell, 2012). People
want to buy numerous goods and services from a single shade. Therefore, due to all these reasons, it
is an opportunity for Iceland Supermarket to expand the business in emerging retail market.
From the external analysis, identified new marketing opportunities for Iceland Supermarket
are needed to be commercialised in the next three year period (Chand, 2016). Here,
commercialization is a process of introducing a new service or a product in the marketplace. To
commercialise the new objectives into the action, Iceland Supermarket is required to develop a
marketing plan which help in determining the process of how to expand the business in emerging
market and achieve the success. Company needs to consider four things at the time of
commercialization including time, place, target market and method for the effective implementation
of plan.
Important reason behind the commercialization of business expansion is globalization as it is
destroying the jobs of middle class in the developed countries (Neves, 2007). Along with this, it
creates a new group of consumers in the developing nations. The growth rate of middle class
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families across the world is increasing and these changes increasing the demand of products and
services in the market. So, to meet this demand gap in developing countries, Iceland Supermarket
has to take step in order to expand the business before its rivals in the next three year period. But
during this phase, company is required to give specific attentions to different areas before
transforming the idea into the action plan. These particular regions of attention are as follows (Belz
and Peattie, 2009).
Market Attractiveness: It is used to measure the possible value of specific market. There are
different ways by which a company can assess the attractiveness of market such as short and long
term profits, entry cost, competition level, growth rate and size of market, political stability etc.
There are five factors which can affect the market attractiveness: economic, market,
competitiveness and technology and environmental components. Iceland Supermarket should
consider the market attractiveness by implementing ideas of business expansion in emerging
nations. The statistics of retail market attractiveness in developing countries show that these nations
are more attractive as compare to developed regions (Dent, 2011).
For example, Brazil retail market attractiveness is about to 985 in which Russia is 94.9%,
China is 66.7% and India is about to 30.5%. Over the next 3 years period, the retail market
attractiveness of such type of nations will be increased by 8 to 10%. The political structure is stable
and entry cost in these regions is less. The market size and growth rate is also high as compare to
developed countries (Retail market attractiveness of selected countries in 2015, 2016). Beside this,
the competition level in these nations is comparatively low. Therefore, the above stated information
shows that emerging countries retail market is attractive and it will be more fascinating in upcoming
three years. The decision of expanding the business in this area will be beneficial for Iceland
Supermarket.
Market Segmentation and Market Targeting: Market segmentation is a kind of marketing strategy
which divides the whole target market into the different sections as per the needs, priorities, interest.
On the other hand, target market is a group of end users for a business to whom a company decides
to market and sell it particular product or service. It considers as first element of marketing strategy
that helps in achieving the objectives of business (Chand, 2016). Iceland Supermarket offers frozen
foods and groceries to its customers. For serving food and other products to the end users, company
should segment the entire market into four types: demographics, geographic, psychographic and
behavioural. Demographic segmentation can be based age, gender, education, income, marital status
etc.
On the other hand, geographic segmentation can be done on the basis of region, state,
community or country. Beside this, psychographic segmentation can be developed on the basis of
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customer interests or their lifestyle. Similarly, behavioural segmentation includes those people who
are price sensitive, brand loyal, looking quality or benefits etc (Fillis, 2010). For expanding the
business in different developing countries, Iceland Supermarket should adopt geographic,
behavioural and demographic segmentations. In addition to this, target market should be based on
the factors such as gender and age, lower and middle level income customers, lifestyle of the end
users and purchasing cycle for the organization. Therefore, following discussion shows that by
selecting right marketing segmentation and target markets in developing and emerging countries,
Iceland Supermarket can convert the idea of business expansion into the actions in the more
effective manner .
Impactful Brand Value Proposition to secure a competitive position: Brand Value Proposition
shows the marketing statement of a company that summarizes the reason of why a customer should
purchase a product or a service (Laja, 2016). It should be in appropriate form so that it can be easy
to convince the end user that specific commodity will be added more value as compare to offering
substitutes. Iceland Supermarket should develop an impactful brand value proposition by including
four elements such as quality, value based pricing, services and image of the firm. Along with this,
the brand value statement should be effective and appropriate which can influence customers to buy
the frozen products and grocery items (Dent, 2011). Organization should try to develop
coordination and synergy between all its core competencies because it will help in achieving
differentiation and securing a competitive position at international level in the upcoming three years
period.
Specific, relevant, marketing mix plans for the next 3 years to build customer loyalty:
An appropriate marketing mix helps company to sell the right product on the right price at
the right place by using the most effective and suitable promotion technique. It is a key element of
marketing plan of the organization. To build a customer loyalty by expanding business in different
emerging countries in the next 3 years period, Iceland Supermarket should develop specific and
relevant marketing mix plan (Giligan and Wilson, 2012). Marketing mix plan for the next 3 years to
build customer loyalty of Iceland Supermarket is as follows.
Purpose of marketing mix plan: Business expansion in emerging retail markets
Marketing mix
elements
Actions to complete marketing mix plan
Product Frozen foods Includes features of frozen food items with
their benefits.
Price £8 Discounts, list prices, different offers like buy
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one get one free etc.
Place India, Brazil, Russia and
China
Malls and outlets of Iceland Supermarket, e-
commerce and direct selling.
Promotion Different advertisement
methods
TV advertisement, sending mails, personal
selling, website, newsletters, advertisement
programs etc. (Cravens and Piercy, 2008).
Marketing Resource requirements:
Marketing resources help in promoting the goods and services in front of target market in
the most effective manner. The use of these resources within the marketing of the goods are varying
with the purpose of the company. In case of Iceland Supermarket, business needs different
marketing resources to launch existing products into the new emerging markets. The most common
and essential marketing resources are search engine optimization, public relation, digital and
traditional advertisement, email marketing, various social media sites, YouTube and newsletters.
These all marketing resources will help Iceland Supermarket to expand business in emerging retail
markets of developing countries (The Essential List of Startup Marketing Resources, 2016).
TASK 4: ICELAND SUPERMARKET REVENUE
Revenue plays an important role in each and every organization. If, revenue of company is
high so it increases the goodwill and profit of it. Company cannot earn profit regularly all the time,
so revenue help in increase the profit. Investment of the investors depends on the company's profit,
so, if the profit is high so shareholder invest their money. Strong revenue protect the organization
in financial terms. Iceland supermarket has good brand image so its revenue is usually high. Last
two years 2012 and 2013 are a challenging time period for the company in the terms of revenue.So
organization open some retail firms with different product range. Iceland has opened 35 new stores
in the UK market including six food warehouses. As per the 2015 report, Iceland supermarket
annual revenue increased by 5% yearly and cost increased by 8%yearly (Keegan, 2002). In 2016,
company is planning to open 410 new UK stores. By these stores, company will provide 1,250 job
opportunities in the country. Applying all these things, rate of growth will increase from 8-10%.
Iceland supermarkets create its revenue from private sectors, suppliers, shareholders and other retail
firms. From private sectors, company usually earns 45% of profit
As per the island supermarket annual report, cash flow puts a positive and negative impact
on revenue. Company needs cash for their daily transaction, bill payment etc. If, revenue of the
company is high so organization easily gets cash otherwise sometimes it creates problem. Cash flow
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shows firm liabilities and assets, so by this, investors can find that they have to invest on it or not.
If, liability is high as compare to asset so, shareholders remove their money from the company.
Market segmentation is also helpful for the revenue making. This is based on the demand of
company. Island supermarket market is divided as per the geographic and demographic factors
(Goodman, 2005).
Geographic market segmentation- In this, company’s revenue depends on the following
factors population, customer’s preferences etc. as per the region of country. If company wants to
increase more profit or revenue so, they have to cover all the ruler and urban areas. By applying this
segmentation, Iceland supermarket increases its revenue by 2.5%.
Demographic segmentation- In this, island supermarket conducts a deep research on the age
group, occupation, income, gender and social class. After taking feedback, company create its
strategies which are based on that how firm can earn more revenue from these factors.
Behavioralistic segmentation - In this, company observes that which product is more
consuming by the people, so they start more production on it. By this, they can earn more profit and
increase the asset side with cash (Craig and Campbell, 2012).
CONCLUSION
From the above study, it can be concluded that marketing management is responsible for the
distribution of products and services in an effective manner. For Iceland Supermarket, it manages
the activities of different levels within the organization. With the help of external and internal
environment analysis, it has been found that there are different factors affecting the functioning and
business operations of company either in a negative or positive manner. External assessment has
showed that there is a major opportunity for Iceland Supermarket that is business expansion in
emerging countries where retail market is at growing stage. For commercializing this chance into
action in the next three year period, firm has considered some specific points. In this context,
market attractiveness, segmentation, targeting, brand value proposition, marketing mix plan and
marketing resources are considered. On the other hand, from the above research, it has been
summarized that growth rate of Iceland supermarket is high compared to other supermarkets.
Company’s revenue and profit have been increasing by 5% as per the yearly basis. This
development will increase over the next 3 year of period while entering into emerging countries
where retail market is at growing stage and demand of the customers are still unmet by other rivals.
This process will help the organization to maintain cash flow for upcoming next few years.
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