Strategic Management Report: Analyzing Waitrose's Business Strategy

This report provides a comprehensive strategic management analysis of Waitrose supermarket. It begins by assessing the appropriateness of a formal strategic planning process for Waitrose, considering its competitive environment. The report then delves into the strategic planning process itself, highlighting key elements such as mission definition, environmental scanning (including SWOT and PESTLE analyses), and the selection of generic strategies like cost leadership, differentiation, and focus. The report recommends a differentiation strategy for Waitrose, emphasizing its unique attributes and high-quality products. Furthermore, it outlines how the organization should determine departmental and functional objectives to achieve the proposed strategy, including financial, internal/operational, people/learning, and customer objectives. The report also briefly considers how strategic planning might differ for Waitrose as part of a multinational organization, providing a detailed overview of strategic options. The report concludes by emphasizing the importance of strategic planning for sustained growth and competitive advantage in the dynamic food retail industry.

Running Head: Strategic Management
Waitrose
Strategic Management

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Table of Content
Question 1.............................................................................................................................................3
Introduction...........................................................................................................................................3
Strategic Planning..............................................................................................................................3
SWOT Analysis for Waitrose..............................................................................................................4
PESTLE Analysis..................................................................................................................................5
Cost Leadership.................................................................................................................................7
Differentiation Strategy.....................................................................................................................7
Focus Strategy...................................................................................................................................7
Conclusion.............................................................................................................................................8
Question 2.............................................................................................................................................8
Introduction...........................................................................................................................................8
Differentiation Strategy.....................................................................................................................9
Financial Objectives...........................................................................................................................9
Financial Objectives...........................................................................................................................9
Internal/Operations Strategic Objectives..........................................................................................9
People Learning Objectives.............................................................................................................10
Customer objectives........................................................................................................................10
Marketing Objectives.......................................................................................................................10
Product Objectives..........................................................................................................................10
Strategic options for MNC...............................................................................................................12
Conclusion...........................................................................................................................................12
References...........................................................................................................................................12
Table of Figure

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Question 1: Assess whether a formal strategic planning process is appropriate for the
organization given its operating environment and why/why not
Introduction
Waitrose supermarket is one of the UK’s leading food retail outlets offering wide range of products
under its own brand name as well of other companies. The company operates in more than 60
countries and have created a name for it in bringing to the customer fresh farm produce and organic
products. The company is on a mission to push the envelope of the food trading across the world.
The company operates in the environment of click and mortar model which is extremely competitive
in nature and thus a formal strategic planning is very much essential and required to grow and stay
upbeat in the market. The importance of strategic planning lies in providing a direction for the
organization and defining the goals (Wolf & Floyd, 2017) Strategic planning also comes handy when
evaluating the existing processes and adopting changing process to move forward in the ecosystem.
It also helps to ascertain the goals set for the organization and measure them on the go. Strategic
planning is a very critical factor which plays an important hand in the success of the organization in
the longer term. Strategic process not only influences and helps in creating powerful forward looking
sustainable business strategies, but it also plays an influencer in the performance of the individuals,
investors, human resources and also impacts the performance of the managers. Strategic planning
importance lies in the fact that it translates the vision of the organization into personal vision which
results in development of positive synergies and collaboration amongst teams to achieve the
intended results (Channon & Jalland, 2016)
Strategic Planning
Strategic planning is a simple yet complex 5 step process, and each step has to be defined carefully
in order to make a formidable business strategy which would result in sustained growth for the
organization (Haines, 2017)
Figure 1 Strategic Planning Process
DefineMission &
Objectives
ConductEnvironemntal
scanning
Formulatio
n
Strategy
Formulation
Strategy
Implementation
Evaluation &
Control

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All the individual elements in the strategic planning process have to be addressed individually and
then act upon to achieve the desired outcome. Mission is not just a statement, it is the building
block for the business operation for the company. Waitrose has a mission of pushing the envelope of
food trading, now in order to achieve this mission Waitrose has to ensure that the entire
organization, its employees, its business process and policies are all directed towards the mission
laid down by the company (Dibrell, Craig & Neubaum, 2014).
Environmental scanning is the understanding of the various micro and macro environmental forces
which might affect the business in the future or at present. It also helps in understanding the
strength and weakness of the organization which are internal to the firm and stay away from threat
and grab the opportunities arising in the business segment. Models like Porter 5 forces, PESTLE
analysis, BCG matrix, SWOT analysis are used to do an environmental scanning and help in gaining a
competitive edge and stay ahead in the competition (Grunig & Morschett, 2017). Hence the
environmental scanning helps in achieving three objectives:
 Internal analysis of the firm
 Analysis of the firm’s industry
 External environment
SWOT Analysis for Waitrose
SWOT analysis is used for accessing the firms internal strength and weakness and focus on the
external opportunities and threats. SWOT analysis is a micro environmental force and helps in
internal analysis of the firm, which further forms the base for building a good formidable strategy
(Hollensen, 2015)
Figure 2 SWOT analysis of Waitrose
Strength
Reputation/Positive customer perception
Own Labels
Fresh quality farm products
Partnership with John Lewis
Wide range of Products
Customer Service
Weakness
Difficult to expand due to exisitng store
coverage
Dependent on performance of own labels
Perceived as expensive
Small market share
Few out of town stores
Opportunities
Expansion in the Asian market and north-west
Online shopping model
Sale of Non-Food Products
Multiple retail partnerships
Increased number of services
Threats
Premium brands of Tesco and other big giants
Overseas group entering the markets
Manufacturers seeking to legally slow down the
penetration of the products
SWOT

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PESTLE Analysis
PESTLE analysis is a one of the fundamental framework which helps to ascertain the external
marketing environment. It helps the company to analyse the macro environment according to the
forces of Political, economic, social, technological, environmental, legal nature (Feys & Probert,
2015)
Figure 3 PEST analysis for Waitrose
Political
GM-Food
Planning food guidance
COmpetiton commission
Committed governemnt towards food quality
Economic
UK Supermarket food sales 400 Billion
Pound(2016)
Recession proof industry
Strong competition, 4 Major players and three
medium size, intense competitin
Globalization
Socio-Cultural
Organic and healthy eating habits
Strong demand for farm produce
Environmnetal consciousness
Eating-Out, take away & convinience
Technological
IT/Communication advancement
Supply chain optimization
Logistics
Bar code and stock management
Increaseing trend in online shopping
PEST

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Figure 4 Positioning Map, Major Retailer, and Quality-Price
After completing the environmental scanning it is pertinent for the organization to map its strength
to the opportunities identified me the SWOT analysis and addresses the weakness and the threats
realized from applying the strategic model. Weakness and threat have to be focussed upon and it
helps the organization to make futuristic strategy to prevent the damage from the threat in the
future. The purpose of the strategic implementation is to attain profitability and developing a
competitive advantage over its rivals. Michael Porter has identified three generic industries to
achieve competitive advantage; the strategies are cost leadership, differential strategy and focus
strategy. The strategies are generic in nature because they are not dependent on the firm and the
industry (Chang, 2016)

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Figure 5 Porter Generic Strategies
Cost Leadership
This type of generic strategy calls for being a low cost producer in the industry for a particular
quantity. The entity sells products at an average price to earn a profit higher than the rivals or below
the average price to gain market share. In case of Waitrose, its products are perceived to be higher
priced and it has leverage the premium pricing owing to its superior quality of food products
(Barney, 2014)
Differentiation Strategy
The understanding of differentiating strategy lies in creating unique attributes and products that
makes them differentiated from their competitors. A premium pricing can be levied on the products
to justify its differentiation. Waitrose can apply differentiation strategy owing to its unique benefits
and freshness of products. The organic products diversifies the product range and makes the firm
highly differentiated.
Focus Strategy
This strategy focuses on the narrow or a niche segment and with that particular segment it aims to
gain either a cost advantage or differentiation. The underlying principle for Focus strategy is to focus
on the needs of a particular segment than that of the entire population (Focus, 2016)
Following the process of strategy formulation, the intended strategy has to be implemented by
conducting various programs, defining budgets and procedures. Implementation of the strategy
formulated involves employing the resources of the organization and a lot of motivation for the staff
to achieve the desired objectives. Strategy implementation is a tricky process, in the sense that
people who formulated the strategy are different from the ones implementing it and thus the
communication flow has to be seamless between the teams. Hence, it becomes important to
communicate the rationale and the purpose of the intended strategy resulting in impactful
implementation of the same (Van Der Kolk & Schokker, 2016)
Evaluation and control is the last step in the strategic planning process and one of the most
important ones, as all the efforts and caution taken in the earlier steps in the end boils down to

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evaluation and control of the strategy implementation and taking right actions if the results are
deviating from the expected outcome. Define the parameters to measure, defining the target value
for the customers, performance measurement, comparing the result with the pre-defined and make
suitable changes in case of any deviation from the intended outcome (Wheelen & Hunger, 2017)
All these steps ensure that the objectives defined by the company take its normal course to
fulfilment by the objectives. Strategic planning ensures that the deviation from the desired strategy
is monitored and steps are taken to put it back on the track. Strategic planning process is like a guide
which is extremely important to follow in a competitive environment. In the absence of it, all the
efforts taken by the organization are prone to go haywire resulting in distortion and waste of time
and efforts. Strategic planning process binds the entire organization together, and creates an
environment of coherence among the employees and the teams, wherein everyone is working
together to achieve the objectives of the organization. Environment plays a very important role in
the strategic planning process, as a competitive environment results in aggressive strategy
formulation, better understanding of the market and the competition, analysing the strategies of the
competitors and thus tweak the organization’s strategy to achieve profitability and sustainability in
the business and stay ahead of the competition.
Conclusion
In the light of the above mentioned argument, it can be established that Strategic planning process is
dependent on the business environment the company is operating in and at the same time it
provides a direction for the entire organization to move forward. Thus, it is highly recommended
that the company carefully make a strategy in order to achieve the momentum in its business and
get a competitive edge over its competitors. The strategy proposed is differentiation for Waitrose.
Question 2: Recommend how the organisation should determine departmental / functional
objectives to achieve the proposed strategy. If they were part of a multinational organisation, how
might the process of strategic planning differ?
Introduction
Strategic planning is a very important tool for the business owing to following reasons
 Helps to build competitive advantage
 Prioritizing the needs
 Providing focus and direction to move from plan to action
 It provides clarity, direction and focus for the organization
 It drives organizational alignment
 It helps to communicate the message to the employees clearly(Abdallah & Langley, 2014)
The strategy proposed for Waitrose is to have a differentiation strategy to target the up-market. In
order to achieve the proposed strategy certain objectives have to be identified for the departments
and function of the business. The reason for identifying clear cut objective is to assess the

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performance of the objectives along the actual outcome; also it helps in defining the mission and
vision with clarity (Branes, Montoya & Ciravegna, 2014)
Differentiation Strategy
As the name suggest differentiation strategy is achieved by developing product or services which
offer unique attributes and benefits to the consumers. The benefits should be so that the customers
turn in to the organization for its unique products and services, and customers perceive that the
product and services are much better and are different from other competitors offering.
Differentiation strategy is not easy to execute as it may lead to addition of certain costs, also the
company has the option of charging premium price for the uniqueness. In order to succeed in
achieving the differentiation strategy, the following strength is must require (Block, Kohn, Miller &
Ullrich, 2015)
 High scientific and marketing research
 Extremely skilled and creative product development team
 A reputation for superior quality and innovation(Porter & Heppelmann,2014)
 Strength in the sales and marketing department to promote and sell the product line
Based on the strategy recommended (Differentiation), Waitrose has to determine the objectives in
its department/functional heads to succeed with its strategy
Financial Objectives
Every business is in operation to earn profit and do well for the society. Waitrose as a chain has been
doing fairly well, but it wants to set it apart and in order to do that it will have to define financial
objectives that do not hurt the firm financially while a new strategy is proposed. The financial
objectives will be defined under the heads of growth and efficiency.
Financial Objectives
Financial Growth: To achieve the net income of 250 Million pound by financial year ending 2019.
Financial Growth: To increase the revenue by 10% annually
Financial efficiency: Decreasing the operation expenses by 5% annually
Financial efficiency: To increase net profit by 10% annually
Internal/Operations Strategic Objectives
Reduce the time product takes to reach the store
Reducing the number of staff in the process of distributing products in the store
Increasing the organic products in the store
Increase community outreach
Use the warehouse and the store location judiciously
Better and improved communication by using gadgets and devices across the store
Achieve 6 sigma operation processes.
Focus on making the system lean and more efficient
Better and renewable packaging material to be used
Ensure that the product meets the requirement and the standards
Improving internal communication
Manage and use the CRM tool effectively to produce better results
Improving the distributer and supplier relationship

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Increase the in-house production of various grocery products
Weekly performance report of the goods sold/unsold inventory and maximize the sales of the high
selling product and increase the visibility of the lower sale product and offer discount and
promotion on that.
Working on the strategic alliance management and increase the partners
People Learning Objectives
Employing professional who are customer centric and thoroughly professional in their conduct
Developing leadership abilities in the lower and middle level staff
Performance management system through balanced scorecard framework
Aligning the incentives to the performance, customer focus and innovation
Keep the practice of learning open in the organization
Conducting at least 2 training in a month for the employees to make them accustom to best
practices
Customer objectives
Increasing sale to the existing customers
Start with customer loyalty program and give them incentive for their loyalty and faith with
Waitrose
Achieve exceptional customer service and give stars to employees based on their performance
Develop and use the existing customer database and update information in the CRM tool
Introducing existing products into new market
Expanding sales in a global marketplace
Improving the service approach to serve the existing customers
Open and acquire more retail outlets
Focus on online selling more than offline selling
Opening of more stores in highly populated regions
Marketing Objectives
Online promotion of products on social platforms
Increase the impression of advertisement online by 40%
Promote products on different internet sites and start with affiliate marketing
Increase the likes on Facebook page by 30%
Increase the number of post on Facebook, Instagram by 4/ day, the post to revolve around the
different product segments, hygiene, better quality and a great customer service
Get into influencer marketing model on twitter and get fitness and entertainment celebrity to
endorse its product
Start conducting events and experiences for the customers
Increase the ATL and BTL promotion activities
Product Objectives
Increase the line of organic products

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Focus more on groceries and clubbing of products
Make the packaging attractive
Improve the packaging material
Launch the online application of company and provide great user experience.
Increase the product line by self-branded items and products from major companies.
These are the objectives which are to be inculcated in the different departments and function of
Waitrose. All these objectives will help the company in achieving a differentiation strategy. It has
been seen that Waitrose does most of its sales through the retail outlets and focuses less on the
online sales. In the current market scenario it makes more sense to increase the spend online as it
also helps in reducing the costs while transferring the cost benefits to the consumers. Mobile
marketing is increasingly becoming popular owing to the usability and the increased penetration of
internet and smartphones. Great application with push notification to the targeted users will help
the company in increasing its growth and achieve sustainable revenue. At the same time it is
required to focus on the CSR activities to build a positive brand image of the company. Another
effort in the direction of the differentiation strategy is to do online reputation management for
Waitrose, this will help the company in addressing the concerns and queries of the customers and
solving them in a stipulated time will increase the faith in Waitrose. The UK grocery market is
dominated by the Big 4s Tesco, Sainsbury, ASDA and Safeway, and Somerfield, Iceland and
Waitrose , all these players in totality constitute the UK’s grocery market, thus if Waitrose has to
create differentiated waters for itself, it has to focus more online and improve its efforts in creating
more organic products. Organic products are the nation’s choice for staying fit and healthy, and it
still has a huge market for expansion as the adoption of organic product is increasing day by day
In case of MNC the process of strategic planning differs in the basic concept that extensive research
has to be done on the industry and the way of entry into the foreign market has to be sewed well in
advance.
Figure 6 Showing Key elements of strategic formulation

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Strategic options for MNC
Conclusion
Waitrose has to go for differentiation strategy if it has to have a sustainable advantage over its
competitors and boost its efforts in online sales and organic products to keep the momentum up and
running. Waitrose is doing a good job presently, a little more focussed and differentiated strategy in
terms of product and marketing strategy will help it to gain a higher market share
Existing markets-Increase market research
New Markets-Organic & Inorganic
Market Expansion
New Business
New Product
Portfolio Expansion
Product
Application
Process
Innovation
Credit Policy
Developing retail outlets
Pricing
Buying over competition
Investment in Assets
Financial
web based sales
ERP
Lower cost of operation
IT
Training
Compensation
Employee ENgagement
Reward & Recognition
HR