Nisa Retail: Analyzing Growth Strategy for a UK SME (Report)

This report provides a comprehensive analysis of Nisa Retail Limited, a UK-based SME operating in the retail sector. The report begins with an introduction to the business, including its founding, current operations, and the research methodology employed. The findings section delves into the nature of the entrepreneur, the start-up processes, the business concept, and sources of competitive advantage. It examines the current level of demand, competitive environment using Porter’s Five Forces model, and the company's sales figures and competitors. The report also explores Nisa Retail's market share, history of growth, and the challenges faced in managing and running the business, including political, economic, social, and technological factors. Furthermore, it discusses the SME’s internal growth strategies and government support measures. The report concludes with recommendations for Nisa Retail to enhance its growth and development, addressing key challenges and leveraging opportunities within the competitive UK retail market. The report is structured to provide a detailed evaluation of the company and formulate a development strategy based on secondary research.

Project

TABLE OF CONTENTS
INTRDUCTION.........................................................................................................................3
FINDINGS.................................................................................................................................3
Start-up processes...................................................................................................................3
Business concept and any sources of competitive advantage................................................3
Current level of demand and the competitive environment ..................................................3
Challenges of managing and running the business................................................................5
SME’s Internal strategy on growth and development............................................................5
Government support measures...............................................................................................6
CONCLUSON...........................................................................................................................6
RECOMMENDATION.............................................................................................................6
REFERENCES...........................................................................................................................7

INTRODUCTION
For attaining growth and development, it is important for the business organization
to effectively analyse the various factors which is required to be accounted for. In this
project, Nisa Retail Limited is taken as an SME which is currently operating in UK. Nisa
stores are the independently owned retail outlets. This report covers designing the growth
strategy for the company and is primarily based on the secondary research. The aim and
objective of the report is to carry out a detailed evaluation of the company and based upon
which development strategy is being formulated. Currently company is facing the challenge
of financial challenge along with the increase in competition in UK.
FINDINGS
Nature of entrepreneur
The founder of the business Peter Garvin and Dudley have established the business
in 1977 providing the grocery products and services to the customers in order to fulfil the
daily requirements. The entrepreneur are highly passionate and determined for the business as
over the years they have grown the business to newer heights where it has crossed
international borders and significantly developed as high quality brand which is being sold at
competitive prices through aggressive marketing strategies.
Start-up processes
 It was founded by Peter Garvin and Dudley. Garvin used to set sound system from
Jamaica in bars and pubs. Later he moved into the supermarket products. In the year
Nisa opened its new distribution centre for Scotland (The Nisa Story. 2021).
 The organization was funding using personal saving and by borrowing money from
the financial institutions.
 At the initial days of the start-up was very small in size with mere to peoples were
working together.
 In the context to the challenges which were being faced at the start were the financial
challenges and survive the tough competition in the market .
Business concept and any sources of competitive advantage
The main idea behind starting of this business Garvin was fascinated by the
supermarket products and was very eager to have his own supermarket and after meeting with
Ramsden would allow Garvin to see the potential of in his idea which resulted into opening
of Nisa Retail limited. The uniqueness of this business which makes it stand out is the higher
quality products at the lower price. This strategy being followed by the company helped it in

attaining the benefit of being unique resulting into attaining success. it is better than it
competitors merely because earlier very less companies focused on low cost strategy and
when Nisa came in, it attracted the customer through its quality and pricing strategy. This
makes it better than its competitors.
Current level of demand and the competitive environment
Porter’s Five forces model
Bargaining power of buyers: The bargaining power of the customers are high as there are
number of companies operating in the retail sector offering similar products at the different
price which makes it easy for the customers to switch from one competitor to another. Higher
the bargaining power of customers the more it can drive the prices down and can also demand
more products at the current price rate.
Bargaining power of suppliers: In the context to the UK supermarket industry, there are
thousands of suppliers providing similar quality materials both local and international which
makes the companies effectively cater to the needs and requirements of the supermarkets
(Adelakun, 2020). This results into making the bargaining power of the suppliers less as the
supermarkets can negotiate for the better deals with its suppliers which helps n increasing
their profitability.
Threat of new entrants: The threat is determined by the barriers to entry and certainly it is
difficult for the business organization to enter into the UK supermarket sector as the market is
already occupied with the top big companies which makes it attractive for new entrants. In
addition to this, opening a business like the top giants requires huge amount of capital
investment (Isabelle and et.al., 2020). Therefore, the threat of new entry is high in UK
supermarket.
Threat of substitute: In respect to the food products, the threat of substitutes is very low and
also it is impossible to for customers not to eat food. In the similar way, substitutes of
supermarkets are the small convenience shops, corner shops or the stall selling organic
products which are able to meet with some of the needs of the customers.
Rivalry amongst existing competitors: The existing competition in the supermarket is
extremely intense which makes it less profitable industry for the existing firms. The key
competitors are Tesco which is the market leader followed by Asda and Sainsbury. In
addition to this, price war is initiated by Aldi and Lidl which is affecting everyone’s profit
margins. Thus, the threat of competition is also high in UK supermarket industry. Other
small-scale competitors are: Coya London, Graysons, Czarnikow etc.
Current sales level and competitors

In 2021, the company posted a strong trading figure pertaining to the 52 weeks to 2
January in regard to the increase in sales by 10.8% to £1.6bn as stated in the Co-op’s annual
results. In the year 2020, the symbol group signed for 624 new stores which resulted into
strong recruitment in 2019. In the annual report of Co-op it is depicted that the wholesale
business attained the sales of £1.6bn, compared to £1.4bn in 2019 (Nisa posts strong trading
figures. 2021). In addition to this, it is being reported that it attained 5.2% growth in the food
revenue to £3.9bn in the 26-weeks to 4 July which is because customers preferred to shop
closer to their home and eat out less during the pandemic and lockdown. In respect to the
competitors, there is a list of top 10 competitors which are posing challenge for the firm. It
includes Coya London, Graysons, Czarnikow, McColl's, Cotswold Fayre, Tesco, Asda,
Sainsbury etc.
Growth and development of business
Market share:-
Nisa retail company has decent market share of the consumers of the grocery
products. The potential customers include those who are interested in purchasing under one
roof and bulk buying of all the products and services that are used in the daily routine. Also
over the years the company has expanded the market by creating stores in the new potential
segments of the business (Yu and et.al., 2018). It has achieved global footprint by capitalizing
the new markets internationally contributing significantly to the growth and development and
surviving among the huge competitors like Aldi, Sainsbury's and Lidl who have established
the largest supermarket chains acquiring the maximum market share.
Apart from that the other way used to build the market share of the company is by
joint investments with the large companies who are ready to acquire the small and medium
enterprises in order to gain the advantage of synergy in the business. Since the competition is
high in the industry the company has to continuously apply the strategic and commercial
operational policies so that the tastes and preferences of the consumers are fulfilled and the
market share of the company is boosted. Currently the company has 1400 partners and almost
4000 stores that are providing the grocery services independently to the customers. The
company has applied competitive prices and promotional strategies to keep up with the
competition and maintain its current market share.
History of growth trend:-
The Nisa Retail Ltd was established in 1997 with 30 retailers and a total turnover of
20 million. Over the years the business have eventually grown with thw establishment of
newer stores in capitalization in the newer markets. The growth is also in espect of having

global footprint by entering to Republic of Ireland in 2008 and also it has combined with
large businesses to assume the benefit of synergy. The growth trend has continued till the
current year where it has rolled out more than 2400 Co-op own brand lines to Nisa partners.
Challenges of managing and running the business
The key challenges which might affect the smooth flow of the business is stated
below.
Political: The functioning of Nisa can be negatively influenced by the changing
government regulations in respect to taxes and expansion permissions. The political
instability and the on-going impact of the pandemic is having greater impact over the UK
government and this is expected to have a negative impact over Nisa.
Economic: The rise in interest rates will affect the funding of the company. In
addition to this, the increase in the labour cost and the fuel cost has resulted into increase in
the price in the product. Inflation resulted into affecting the productivity of the business.
Thus, this factor is a negative impact over Nisa growth plan.
Social: There is a drastic shift in the taste and preferences of the customers due to
change in the lifestyle and the emerging social issues (Fuertes and et.al., 2020). The Nisa
developed the product lines and also expanded it product mix in such a way that it has
resulted into positively impacting the demographic change. This factor is in favour of the
company and will help in achieving growth and development.
Technological: This factor is a having huge impact over supermarket industry and Nisa
has effectively identified the emerging technology. Nisa has developed its online shopping
portal in order to give tough competition to its rivals. It is making efforts to meet with the
customer’s demand.
SME’s Internal strategy on growth and development
The strategy followed by Nisa is nothing new or innovative as it used low-cost
strategy which helped in attaining the minimum cost of production so that it can offer
products and services to its customers at a reduced price. This has resulted into positively
presenting the brand image of the company and in supported in building reputation in the
market (The Nisa Story. 2021). In addition to this, Nisa is always focused on providing
quality product and services to its customers. Along with that, the mission of Nisa is to
become the partner of choice for all the retailers and wholesalers. Another strategy followed
by it is to be flexible and change with eth change in eth demand and time which supported it
in grabbing larger customer base which consequently led to growth and development of the
organization.

Government support measures
In order to overcome, the challenge of financial issues, Nisa can take the help of
government support schemes which is being implemented for helping eth businesses into
retail. In addition to this, during eth time of pandemic government provided financial support
to the retail firms which can be utilized by the Nisa in order to overcome the challenged of
the finances (Paton and et.al., 2020). Along through these funds, complete can implement
plan which will help it in fighting with its competitors in better way. These government
support measures if implemented by the organization will result into effectively managing the
challenges it came across.
CONCLUSON
It can be concluded from the above, that this report has effectively addressed the aim
and objectives stated in eth introduction. Based upon the finding, most of the factors are in
favor of eth company like the power of suppliers, threat of new entry or substitute products.
Also, the social and technological factors are also in favor of it. The growth history of the
company is also good and in terms of sales, it has been increasing strongly. In terms of eth
challenges which is being faced by Nisa is the availability of sufficient amount of funds along
with the increasing competition in the market. But, with the help of the various support
initiatives undertaken by the government will help it in resolving or minimizing the risk
attached to the challenge.
RECOMMENDATION
Certain recommendations can be made to Nisa Retail so that it can grow as an
overall business and survive in the cut-throat competition :-
 The major issue that is faced by the company is the unavailability of the sufficient
financial resources which the company should resolve by efficient planning. This can
be done through arranging cheaper finances either through government grants and
cheap loans from financial institutions.
 To keep up with the competitive forces strategically planning and enforcement is
required in respect of meeting customer demands and providing services as per their
satisfaction.

REFERENCES
Books and Journals
Adelakun, A., 2020. Should Porters Five Forces have value in Businesses today. Computing
for Business (BSC) Aston University Birmingham.
Fuertes, G., and et.al., 2020. Conceptual Framework for the Strategic Management: A
Literature Review—Descriptive. Journal of Engineering. 2020.
Isabelle, D., and et.al., 2020. Is Porter's Five Forces Framework Still Relevant? A study of
the capital/labour intensity continuum via mining and IT industries. Technology
Innovation Management Review. 10(6).
Paton, A., and et.al., 2020. Submission of evidence on the disproportionate impact of COVID
19, and the UK government response, on ethnic minorities and women in the UK.
Yu, H. and et.al., 2018. Market share and costs of biologic therapies for inflammatory bowel
disease in the USA. Alimentary pharmacology & therapeutics. 47(3). pp.364-370.
Online
Nisa posts strong trading figures. 2021. [Online]. Available Through:<
https://www.talkingretail.com/news/industry-news/nisa-posts-strong-trading-figures-
08-04-2021/ >.
The Nisa Story. 2021. [Online]. Available Through:< https://www.nisalocally.co.uk/the-nisa-
story/ >.