Comprehensive Strategic Analysis of Waitrose Supermarket Chain

This report provides a comprehensive strategic analysis of the Waitrose supermarket chain. It begins with an introduction to strategic management and its importance, followed by a background analysis of Waitrose, highlighting its market position and challenges. The report then delves into internal and external analyses, including SWOT and PESTLE analyses, to identify the company's strengths, weaknesses, opportunities, and threats, as well as the political, economic, social, technological, legal, and environmental factors impacting its operations. Further, it identifies Waitrose's sustainable competitive advantages and employs Porter's Five Forces model to assess industry dynamics and competitive pressures. Finally, the report offers strategic recommendations based on the preceding analyses, aiming to enhance Waitrose's performance and address its challenges in the competitive UK grocery market.

Assignment/Essay

Table of Contents
INTRODUCTION ..........................................................................................................................3
Background analysis of Waitrose...........................................................................................3
Internal and external analysis ................................................................................................4
SWOT analysis of Waitrose ..................................................................................................4
PESTLE analysis of Waitrose ...............................................................................................5
Identification of company's sustainable advantage ...............................................................6
Porter's Five Forces model ....................................................................................................6
Strategic recommendation based on analysis ........................................................................8
CONCLUSION ...............................................................................................................................8
REFERENCES .............................................................................................................................10

INTRODUCTION
Strategic management refers to management of resources of the company for attaining
organisational objectives and goals. The strategic management includes analysing and evaluating
the competitive advantage, internal organisation and strategies of the companies. A prescriptive
approach to the strategic management demonstrates how development of strategies is executed
by analytical and evaluative procedures in which opportunities as well as threats are considered
any general principle (Andersen, Torp, and Linder, eds., 2019). The following report includes
company naming Waitrose. This is a UK supermarket chain and it is facing high competition in
market. This report includes background of the company, external as well as internal analysis
and determination of sustainable advantage of the firm. Also suggestions are made for this
company to overcome competition.
Background analysis of Waitrose
Waitrose is a company which has total sales which is continually rising in tough grocery
environment with the firm enhancing 0.5% of market share last year (Waitrose case study, 2019).
This company is willing to close several store and restraining expansion due to lack in operating
profits for a period of six months. There are basically four rivals of this company across the
world. They are Asda, Morrisons, Sainsbury and Tesco. Waitrose is shutting it's branches due to
various reasons listed below -
Over expansion – The different Waitrose places like Staines, Leek and Cardiff are all
heartlands of Waitrose and these have failed to attract shoppers and potential customers for
earning higher profits. Customers are inclining more towards buying the necessary items locally
from weekly shopping in bulk resulting in decline of sales of supermarkets.
Prices - There is increase in popularity of companies willing to offer discounts, such as
Lidl and Aldi has exerted pressure over grocery markets in relation to reorganise their pricing
strategy (.Bianchi, Mingo, and Fernandez, 2019.). The middle class individuals experience
satisfaction from bargaining from these German discounters. The prices offered by Waitrose are
generally higher than it's competitors. Thus it is essential for this company to manage it's pricing.
This company is launching online services of the products which will require huge investment.
Thus it is needed that Waitrose must emphasise on various aspects before entering into online
selling.

Internal and external analysis
The external as well as internal analysis is used by the companies for estimating the
strength and opportunities that a company has (David, and David, 2019). The external analysis
pays attention at a wider and outside business environment which has an influence on businesses.
On the other hand, internal analysis is defined as factors within the company using strength and
opportunities that a business has.
SWOT analysis of Waitrose
This analyses the brand or company with the weakness, opportunities, strengths and
threats. In the SWOT analysis of Waitrose, strength of the firm and its weakness are inclusive in
internal environment of the firm, whereas opportunities and threats are the factors of external
environment. This tool in an appropriate management analysis which allows Waitrose to
measure the performance of the firm in comparison to its competitors within the sector. The
SWOT analysis of Waitrose is mentioned below -
Strength Weakness
 This company has a royal warrant to
supply groceries to royal family.
 The advertising of Waitrose is very
effective and new marketing strategy
adopted by this company is more
ethical than the competitors.
 This company is building a brand
identity worldwide by sponsoring
various events.
 The biggest weakness of this company
is intense competition due to pricing of
products and services.
 Social media has affected this company
by publishing some articles.
Opportunities Threat
 There is success of white based
packaging of essential goods.
 There is opportunity for taking
“community matters” campaign
forward for generating good word of
 There is huge competition in grocery
market and thus there is threat of
successful expansion.
 There is another threat which includes
increasing competition from e

mouth.
 This company can build rich image
heritage and expand in favourable
markets.
commerce websites.
 The poor economic condition of UK is
a threat for Waitrose business.
PESTLE analysis of Waitrose
The PESTLE analysis of a company helps in knowing what are the different elements
that must be considered by the company in developing strategies (Li, 2019,). The PESTLE
analysis of Waitrose is mentioned below -
Political factors - These consists of different political factors like fiscal policies and tax
policies. There is also affect of Tariffs and trade factors which affect the functioning of the
company. Government imposes various rules and regulations for the company so that they can
work smoothly within the marketplace. The business environment is affected by the different
rules provided by government to the retail sector. Such factors help in determining influence of
government upon the economy. This can be explained with an example – government can
enforce certain duties or taxes which could change entire structure of revenue generation of
Waitrose.
Economic factors - These factors are inclusive of different elements like interest rates,
inflation, foreign exchange rates, etc. these depends upon economic growth patterns and a
company must analyse these factors for having a successful business (Miller, 2019).
Social factors – Some of the elements of these factors include population and cultural
trends. Waitrose is required to analyse what are the type of products it is offering for providing in
certain areas as what individuals are buying with a target market. Waitrose has different
branches in around the world including Abu Dhabi (Swot and Pestle of Waitrose, 2019).
Waitrose conducts secondary as well as primary market research for finding out whether the
product is sold successfully or not.
Technological factors - This includes technological advancement which has an
influence on operations of Waitrose. Some of the technological factors in this relation are
research and development, automation, technological awareness extent that owned by a market.
Environmental factors - There are those factors which influence the surroundings of
business. Waitrose ensure that it is working effectively and managing different activities of

business (Newburry, Deephouse, and Gardberg, 2019). This organisation do something good for
the society development and environment friendly activities.
Legal factors – Different factors included in this are internal and external sides. There are
various laws which influence environment of a firm in several nations while there are some
particular policies which are maintained by companies for their own self. Legal analysis is taken
into consideration for smooth functioning of the company. The various laws which affect
business environment of Waitrose are consumer laws, safety standards labour laws, etc.
From the PESTEL analysis of Waitrose, it is concluded that management of the company
ensures all factors are correct for establishing a successful business. The strategic management
of Waitrose is not up to the mark and thus it is important to maximise the ability of strategic
management (Richard, Markoczy, and Chung, 2019). This is important for a company to
conduct external analysis as it helps to know strength as well as opportunities of the company.
Identification of company's sustainable advantage
There is requirement of extensive research and strategic planning for gaining competitive
advantage within market. Each and every advantage is significant and counts for establishing
business for becoming leader within the industry. The target audience is a focused group of
consumers that the company is looking. The first store of Waitrose was started in the year 1904
by Wallace Waite, Arthure Rose and David Taylor. The first supermarket of Waitrose was
started in the year 1955. Waitrose aims for ensuring combination of a supermarket with
appropriate service and expertise of a specialist shop. This company offers a prime commitment
for ensuring that consumers are getting good value for money while shopping at supermarkets of
Waitrose. This company believes in giving quality and good products to customers so that value
of money is earned (Rok, 2019). This company provides best services to customers so that
customers are able to spent good time while shopping. One of the biggest strategy used by
Waitrose is providing high quality products and maintaining strong relationships with customers.
This company thinks that if quality products are sold with customer service will strengthen the
bond and relationship with customers (Slamet, and Ramdhani, 2019). The competitive analysis
of Waitrose can be more easily understood by Porter's Five Forces analysis. This is listed below -
Porter's Five Forces model
Threats of new entrants - Within the UK, the grocery market is primarily controlled by
various companies like Asda, Tesco and Sainsbury's, etc. The stores of Tesco experiences strong

barriers for new firms which enters grocery supermarket because of cost leadership or economies
of scale. This can be explained by an example this is hard for different new entrants for raising
sufficient capital due to developed supply chains and fixed costs . Tesco has invested in
technology and thus Waitrose should also adopt new technologies within process and business
operations.
Suppliers' bargaining power - It defines suppliers' power which is influenced by most
of the grocery chains and there is uncertainty of loss in business due to large organisations like
Tesco. There is a threat for UK based suppliers due to enhancing abilities of large retailers to
source the offerings internationally at cheaper deals (March.Srivastava, and Yadav, 2019). The
competitors of Waitrose negotiate their price. Supplier relations can have affects on the freedom
and margin of the company. Such competitive rivalry forces can minimise the profit margin of
supermarket chain stores and suppliers.
Consumers' bargaining power – Switching cost of product will be lower and more
buyers' exercise more power when more products are undifferentiated and standardised. Waitrose
works for meeting needs of customers, customisation of services, better choices, low price rtes
and constantly flow in promotional activities. This helps in developing opportunities for this
company to enhance it's performance.
Threat of substitutes - This is defined as the threat that a company has from the
substituting product or service offered by another company. Waitrose is a company that deals in
supermarket and grocery retailer shops. Waitrose has the threat of substitute form online
companies that sell grocery products online. Thus this company must ensure that it is developing
competitive advantage by investing into online delivering of products.
Competitive Rivalry - Rivalry is strong within the general food retail industry. There are
basically two reasons for this one is low switching costs and difficulty in differentiating between
competing retailers. Waitrose faces high competition within market due to presence of big four
grocery and supermarket chain such as Tesco, Sainsbury, Asda and Morrisons.
Most competitive operating environment of the group is grocery retailing and in this
Waitrose is operating. This company defies trends as it is positioned as a premium priced, niche
and differentiation strategy in both goods and services (Steiss, 2019). Waitrose ensures
combination of merchandising skills, along with different and visually appealing environment
within its stores. Waitrose possess reinforcing and multiple layers of advantages or a resource

based theory and according to which to create effective performance, strategic assets are more
decisive and not having a favourable environment. A bit different model is shared by The John
Lewis department that promise that there is no better price in any other competitor. This
company offers high quality products and it does not compromise with price of the products.
Strategic recommendation based on analysis
Strategic management is very essential for the company and there is relevancy of
strategic view for success of the company. Each and every organisation is always involved in
growing business and making it prosper. There is need of having long term strategy and goals for
a company to achieve success. It is recommended for Waitrose that it should develop effective
and strong strategies for so that goals and objectives can be achieved in less time. By the
development of strategic management, the company ensures high awareness in the firm's
professionals regarding the responsibilities. This is also associated with enhanced productivity as
well as business competitiveness. This is also responsible towards optimum utilisation resources
and waste reduction. In this way, it is easy to maximise the profitability of activities induced by
the venture. Thus it is required to use strategic management as a guide for promoting continuous
improvement in business. This also helps in ensuring the survival of the company. Marketing of
the company can only be strategic if it is in line with the aims and objectives of business. This
must contribute the company in attaining the expected results by means of segmenting and
customising actions. It is the responsibility for building a strong brand and enhancing positive
perspectives regarding the company. This helps in making stronger bonds with customers and
ensure creation of points of contact for facilitating dialogues with a qualified audiences. Sales
efforts are decreased by marketing, maximising the financial outcomes through retention and
attraction of customers. Each goal associated with marketing must be connected to a bigger
objective, strategic and vital for perpetuating the company ( Witcher, 2019). It should also be
specific and measurable, as by following performance indexes, more effective and profitable
strategies for the organization are attained.
CONCLUSION
From the above discussion, it is concluded that strategic management is important for the
company as this helps in managing and controlling business operations in effective manner.
There are different types of analysis that a company conducts for analysing the strength and

opportunities of the company. There are types of analysis which are conducted by organisations
for analysing the strength and opportunities that a company is having. Also there is need of
managing the strategies and plans adopted by a company as profit and performance of a
company directly depends upon these. Waitrose is a supermarket chain and it deals with the
grocery products and thus for sustaining in market for longer time it must develop strong
strategies. The PESTLE analysis includes various factors like political, economical, social,
technological, environmental and legal. By using the SWOT analysis, the company is able to
analyse the opportunities and strength that a company is having.

REFERENCES
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Online
Waitrose case study, 2019. [Online]. Available
through:<https://www.theguardian.com/business/2017/feb/09/why-is-waitrose-closing-stores>
Swot and Pestle of Waitrose, 2019. [Online]. Available through:<https://studymoose.com/swot-
and-pestle-essay>