Runway Retail Supermarket: Market Entry Strategy and Analysis Report

This report provides a comprehensive analysis of the potential for Runway Retail Supermarket to enter the New Zealand retail market. It begins with an executive summary, followed by an introduction outlining the company's overview, goods and services offered, and its value proposition. The cor...Read More

Running Head: Runway Retail Supermarket
Runway Retail Supermarket
Report
System04104
5/16/2019

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Executive Summary
The grocery and retail market opportunities in New Zealand is increasing every day.
Large numbers of new retail companies are looking to enter in the New Zealand retail market.
The increasing growth in retail sector and few number of competitors provide various
opportunities for a new retail player. In such as positive circumstance, Runway Retail
Supermarket is looking to open its business in the New Zealand. The company has strong
financial support and great experience to deal in the same sector but it is new for the New
Zealand market. The present report shows the various opportunities for the Runway Retail
Supermarket in the country. It also shows how company will survive in the market and how it
can compete with the existing people. Although recruiting and managing a large workforce in
the new country is a challenge for the organisation but its strong human resource
management and proper financial marketing strategies can easily help to start its business in
the country.

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Table of Contents
Executive Summary...............................................................................................................................1
1. Introduction...................................................................................................................................3
1.1 Company overview......................................................................................................................4
1.2 Goods/Services Offerings.............................................................................................................4
2. 2X2 matrix strategy........................................................................................................................4
2.1 Strength.......................................................................................................................................5
2.2 Weakness.....................................................................................................................................5
2.3 Opportunities...............................................................................................................................5
2.4 Threats.........................................................................................................................................5
2.5 SWOT Analysis Table of ‘Runway Super Market’.........................................................................7
3. Entry mode for the company.........................................................................................................7
4. Why New Zealand is the best option for starting this business?...................................................8
5. Suitable Location for its subsidiaries..............................................................................................9
6. HR approach to find suitable workforce for the business............................................................10
7. Conclusion...................................................................................................................................11
References...........................................................................................................................................12

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1. Introduction
Runway Retail supermarket is dealing in Grocery and general household products.
The main objective of the company is to provide best products with cheap prices to its
customer in New Zealand. The main idea behind operating retail business in New Zealand is
that retail market in New Zealand is growing with increasing speed. There are very few
competitors operating their retail business in the country with small capital and small
financial investment. However, Runway Retail Supermarket will provide best quality
products to its users in cheap prices through both physical stores and online channels. This
strategy of the company helps to acquire major market share in the country. This report
analyses the current business opportunities for ‘Runway Retail Supermarket’ in the New
Zealand. This report also analyses the current favourable and unfavourable situation and
environmental factors in the country under the SWOT analysis. It helps to understand that
what are the opportunities and threats available for the Company in New Zealand. Further,
the report helps to understand that which type of HR approach can helps the organisation to
recruit people for the organisation. In the end of this report, a short conclusion will be added
as a summary of the report.

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1.1 Company overview
Company Name: Runway Retail Supermarket
Category: Retail Industry
Tagline: Spend a little, Gain a lot
USP: Low cost and high-quality products
Targeting: Middle class Family and Households and Individuals
Positioning: Want to place in those developed area where middle class family belongs and
provide them best quality products in their budget.
Channel: More than 200 stores in top cities of the Country and also provide online sales
through its supply chain network.
1.2 Goods/Services Offerings
Runway Retail Supermarket deals in Grocery products and general household
products including some fashionable cloths and electronic music items like music player. The
main target of the company is those family and house who are daily shopping in supermarket
and buy vegetables, fruits, grocery products, and other general-purpose products. However,
apart from the grocery and household products, company also provide fashionable clothes for
men, women, and kids (Luiten, Steenhuis, Eyles, Mhurchu, & Waterlander, 2016). However,
the company also provides these products through its websites and mobile app. Company
uses its supply chain network and logistics facilities to deliver the products to the online
customers. The Runway Company will provide cash on delivery service facilities to its online
customer and easy refundable and exchange policy if any unmatched or bad quality products
were deliver to its customers.
2. 2X2 matrix strategy
The SWOT analysis (2X2 matrix) of the company explains its Strength, Weakness,
Opportunities, and Threats (SWOT). SWOT analysis helps in the situational analysis of the
company and it also helps to analyse the opportunities or threats. It is also helpful in
analysing the current business environment that has impacts on the business organisation
(Sacks, Mialon, Vandevijvere, Trevena, Snowdon, Crino, & Swinburn, 2015).

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2.1 Strength
Runway Retail Supermarket provides quality products and services to its customer on
very low prices (Philipp & Ho, 2010). The strong financial support of the company helps it to
expand its market on online and offline market. The company has strong distribution
networks that help the company to distribute its online products to the customer on their
doorstep. It has financially strong and reliable suppliers that helps the company on timely
deliver its product to the customers. It also helps in maintain adequate inventory of both raw
material and finished goods in the organisation (Allaway, Huddleston, Whipple, & Ellinger,
2011). Apart from this, company has strong free cash flow that helps the company to expand
into new projects.
2.2 Weakness
It is new business organisation in the New Zealand and it has very less experience of
operating business in New Zealand. Another weakness of the company is that it has to face
problems in identifying needs of the customers (McNeill, 2012). However, the combination
of online and offline business strategy is somehow difficult to manages. Apart from this, low
profitability is another major weakness of the company (Bailey, Price, Pyman, & Parker,
2015). Apart from this, a major weakness for the company is that it is operating its business
on very low margin, which generates low profit for the company.
2.3 Opportunities
The retail market of New Zealand is growing almost 2% per annum and it is a great
opportunity for the company. Another opportunity for the company is to face very minimum
competition in New Zealand, as there are only few players in the retail market of New
Zealand (MacMahon, Smith, & Lawrence, 2015). However, the low inflation rate of New
Zealand and large number of retail customers are also key opportunities for the company.
Although, the preference of customers are growing every day and people are ready in the
country to spend any amount of money for better service and quality products. Even the
customers are ready to pay premium prices on small stores because of quality product and
services. The Runway Retail Supermarket will offer variety of products to the customers and
provide various alternative choices for a particular product. This will help the business
organisation to offer new avenues of business.
2.4 Threats
Threats are those factors that may affect the growth and profitability of the
organisation in the future. The threat of new entrants in the New Zealand retail market is

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continuously increasing as large number of retail competitors are looking for investment in
retail market. Some of the major giants like Woolworths, Aldi, Amazon Fresh, and Wal-Mart
etc. are trying to enter in the New Zealand retail market. Another threat for the company is
the regular change in technology and its failure to adopt changes on regular basis. However,
rising new raw material and new quality of products will also affect the business operations
of Runway super market. Apart from this, the other large business organisations are offering
more discounts and low pricing products to the customers and it will also be a major threat
for the company.

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2.5 SWOT Analysis Table of ‘Runway Super Market’
STRENGTH
1. Top quality products
2. Low prices
3. Variety of Products
4. Strong financial support
5. Low operating costs to earn
marginal profit
6. Not new in the retail industry
WEAKNESS
1. A new brand name for New Zealand
customers
2. Facing difficulties with marginal
profit
3. Facing difficulties in managing both
online and offline sales
4. Lack in Technology
OPPORTUNITIES
1. Growing economy of New Zealand
provides opportunities to explore its
business.
2. High income of people will help to
attract towards groceries and
household products.
3. Only few competitors in the market
4. Needs advertising to beat other
brands
THREATS
1. New Entrants
2. Low profit margin
3. No experience of operating business
in New Zealand
3. Entry mode for the company
The Runway supermarket will be entered in the New Zealand market with joint
venture strategy. The company will tie up with the local super market Countdown, which is a
larger supermarket in New Zealand and subsidiary of Woolworths Ltd (Australian retail
giant). Countdown is a full-service supermarket chain in New Zealand and it is the subsidiary
of Woolworths. Woolworth is a large supermarket company of Australia and has great impact
in Australian retail industry. Countdown has a large customer segments in the country and
known for its quality products and excellent services to the customers (Glanz, Bader, & Iyer,
2012). The countdown stores are large in size of other retail stores in New Zealand. However,
the Runways supermarket will tie up with Countdown and will start its retail business in
Australia. The Runway supermarket will provide on-going support to the local partner and
establish a strong business relationship. However, a strong partnership with Countdown will

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help the company to increase its market share and build its brand image. The Countdown has
many more stores in Tasman Sean, Christchurch, and Wellington etc. and it will be easy for
the company to find more customers for the business with the help of its business partner
(Rickard, 2012).
Countdown is a strong financial support from Woolworths Retail Ltd. and
successfully operating its business in New Zealand. The Runways supermarket will operate
its business on the same module. Countdown is also operating its business on the strategy of
low prices and high-quality products. It helps the Runway Retail Supermarket to grow up in
New Zealand retail and grocery market.
4. Why New Zealand is the best option for starting this business?
There are several causes for selecting New Zealand for retail business. These causes are as
follow:
1. Increasing Number of Customers and Growing population: The rise of customer
demands is increasing with their increasing income and population. This attracts the
Runway supermarket to invest in Retail industry of the country. The number of
peoples in New Zealand is habitual for daily shopping for household products and
grocery products. As the population is continuously increasing in the country and it
also help to raise the demand of grocery and house hold products. Therefore, it will be
better to invest in the Australian retail industry.
2. Increasing Disposable Income: The per capita income of the country is increasing
every year by a huge margin. It also increases the disposable income of the people.
This enhances the growth rate in retail sector in New Zealand (Vandevijvere,
Waterlander, Molloy, Nattrass, & Swinburn, 2018). According to the Per capita
income of New Zealand in 2017, people earn 39,560 dollars according to the PPP
(purchasing power parity), while the disposable income of people in same year is
increasing from $US47, 623 to $US 48,504. This increasing disposable income of
people will provide a great opportunity to invest money in New Zealand retail
Industry.
3. Low Competition: There are only few competitors in the New Zealand retail market
that can gives competition to the Runways super market and can affect the strategy to
look forward for future expansion in the market. However, there are few players

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already exist in New Zealand retail market which acquire a large market share in the
country (Kamaladevi, 2010).
4. Online Sales: There are very few retail grocery stores in the New Zealand market,
which are providing online delivery of grocery products to the customers. In the time
digitalisation, every customer wants to buy the product on their fingertips and want
their buying products on their doorstep. Runway Retail Supermarket will provide the
best online sales facilities to its users and catch the opportunity of online sales
(Renton, Daellenbach, & Davenport, 2016).
5. High GDP growth rate and low level of Inflation: The GDP growth rate of New
Zealand is very high, while the inflation rate is low in the country (Wilkins, 2014).
This helps this retail business organisation to invest in the market and earn more profit
because people will buy more and more grocery and household products. These types
of products are the daily need for any people and people will buy in bulk if the
inflation rate will be low. Even in high inflation scenario, demand will be affected
with very less margin.
These favourable economic conditions of New Zealand will provide an opportunity for
new retail business organisation to invest in the country and earn profit with low competition
and high demand of customers.
5. Suitable Location for its subsidiaries
New Zealand is a beautiful country where people are more fashionable and investing
so much money on their life style and living standards. People in urban areas are trendier and
buy clothes on regular basis (Bolton, Shankar, & Montoya, 2010). While some people who
live in semi urban areas were also buying household and grocery products usually. Therefore,
demand of retail grocery stores in New Zealand is everywhere. However, as Runway
supermarket is targeting customer with quality products in low and affordable prices, it can
target both urban and semi urban area. However, the online sales of the company will provide
facility to its user to order products in the large city. The strong supply chain network of the
company can supply goods and services in urban areas in its initial days of business.
However, Runway will operate its business in mainly large cities of the country such as
Auckland, Wellington, Christchurch, Tasman Sea, Queenstown, Napier, and Hamilton
(Rashid & Ghose, 2015). These overcrowded cities of the country will provide more
customers for Runway Retail Supermarket. The Runway can target those areas where large

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population is living and people are spending more money in household products and grocery
products.
6. HR approach to find suitable workforce for the business
Recruiting people for the business is almost similar in New Zealand. To find the
suitable workforce for Runway Retail Supermarket, the HR team will advertise about the
vacant post on its websites. Company will also approach to different colleges and university
student to work with Runway with high salary package and with excellent working
environment (Nenycz-Thiel, 2011). Recruiting manager of the company can establish a direct
relationship with the potential candidate for this job and select appropriate candidate for the
job. After advertising about the job posts and vacancies in the company, human resource
team will conduct interview of suitable and eligible candidates for the company and after this
all recruitment process, the HR team will finalise the name of those eligible candidates who
were selected in the interview after screening process (Arli, Dylke, Burgess, Campus, &
Soldo, 2013). However, apart from this company will also create job page or career option for
potential employees on its website. People who want to join the Runways Retail Supermarket
can easily apply for the job from the company website (Keen, 2013). However, to hiring
workforce for the company, runway will provide high wage and growth opportunities for its
employees that will attract other young people to join the company and make their career
with Runway Retail Supermarket.
The Runway Retail Supermarket will try to retain the best employees of the
organisation and hike the salary of employees on regular basis. Apart from this, the company
will review the performance of employees on regular basis and give appraisal on the basis of
performance review. For the recruitment of employees, the organisation will create a targeted
recruitment plan and consistently implement a strategic plan for the recruitment process.
Organisation will also provide regular status updates to the candidates about their hiring
process and procedures. HR people in the organisation will share information related to
employees’ engagement, professional development, and other retention strategies. Runways
also provide regular training to the employees for their better development and growth. The
training process also include that how they can provide a best customer experience to the
Runway’s retail customers. Training and development programs also help them in updating
their skills to manage or handle the customers on the stores.

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7. Conclusion
New Zealand is an emerging economy and has many more growth opportunities in
retail and food sector. Runway Retail Supermarket will utilise these opportunities and will
open its retail stores in the country. The offline and online mode of business will help the
company to establish itself in the New Zealand retail market with its business partner
‘Countdown’ supermarket. The growing economy of the country, increasing populations, low
inflation rate, and increasing disposable income of people are some favourable condition in
the New Zealand will definitely provide an opportunity to expand the retail grocery business
in the New Zealand market. However, the increasing number of competitors and lack in
technology some of the major threats for the company. Technology is essential for providing
better customer experience to the customers and Runway is lacking in it. However, the high
financial capability of the company can help to overcome this issue in new market. However,
another threats that company will face that number of global players like Woolworths, Aldi,
Amazon Fresh, Big Bazaar, Wal-Mart etc. are looking for launching their retail business in
same segment in future. In such scenario, the strategy of quality products in low prices will
help the company to acquire large market share in the company.

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