Business Strategy of Waitrose: A Comprehensive Analysis

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Unit: 32 Business Strategy
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Contents
Introduction......................................................................................................................................4
Task 1Analyse the impact and influence which the macro environment has on an organisation
and its business strategies................................................................................................................5
P1 Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies...............................................................5
M1 critically analyse the macro environment to determine and inform strategic management
decisions......................................................................................................................................7
Task 2 Assess an organisation’s internal environment and capabilities.......................................8
P2 Analyse the internal environment and capabilities of a given organisation using appropriate
frameworks..................................................................................................................................8
M2 Critically evaluates the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set........................................................10
Task 3 Evaluate and apply the outcomes of an analysis using Porter’s Five Forces model to a
given market sector........................................................................................................................11
P3 Applying Porter’s Five Forces model evaluates the competitive forces of a given market
sector for an organisation...........................................................................................................11
M3 Devise appropriate strategies to improve competitive edge and market position based on
the outcomes..............................................................................................................................13
Task 4 Apply models, theories and concepts to assist with the understanding and interpretation
of strategic directions available to an organisation........................................................................15
P4 Applying a range of theories, concepts, and models, interpret and devise strategic planning
for a given organisation.............................................................................................................15
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M4 Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives...................................................................................................................................18
D1 Critique and interpret information and data applying environmental and competitive
analysis to produce a set of valid strategic directions, objectives and tactical actions..............21
Conclusion.....................................................................................................................................22
References......................................................................................................................................23
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Introduction
Business strategy can be understood as the process of planning and implementation of decisions
in order to accomplish the organisational goals and objectives. Both the small or large
organisation develops and implements strategies by analysing the market and its trends and the
activities that are having a significant impact on the growth and business procedure of the
business. The report is based on the business strategies and provides information about the
objectives, mission, values, and vision and core competencies of the organisation. The
organisation that is chosen for this project is the Waitrose organisation which is a leading
supermarket company in the UK. The effectiveness of two techniques that are used for analysing
the strategies within the organisation is explained in this report. An internal audit of the
organisation will be reviewed to understand the internal organisational environment. Moreover,
there will be a justification for alternative strategies to accomplish organisational goals and
objectives. At the end of the report, there will be an evaluation of the roles and responsibilities of
personnel and use of SMART objectives to accomplish the implementation of the strategy.
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Task 1 Analyse the impact and influence which the macro environment has
on an organisation and its business strategies
Introduction
Every business has its competencies that will help in analysing the position of the organisation in
the business market. There is various framework related to the macro environment such as
SWOT or PESTLE that help in developing the strategies.
P1 Applying appropriate frameworks analyse the impact and influence of the macro
environment on a given organisation and its strategies.
The term business strategy can be explained as the action of the managers implemented to
accomplish the organisational goals and objectives. Generally, the strategy is a general direction
that is set by the company for their employees and stakeholders and other components related to
business to accomplish the desired business goals and objectives. Waitrose Company needs to
develop various strategies in order to define the macro environment.
There are various frameworks that affect the macro environment and PESTLE analysis is the
framework that influences the macro environment. The detailed PESTLE analysis of Waitrose
Company is as follows:
The PESTLE analysis of Waitrose Company
Political factor Due to a change in global trade policies and the tax regulations, there is a
high impact on the operations of Waitrose Company. Due to weak in the
pound, there is risk arise in a future trade. Beside this, there is a
significant restriction in import and export duties (Bharadwaj and El
Sawy).
Economical factor Due to variation in currency the certainty of political and economic also
increases. It increases compliances cost which makes the Waitrose
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Company less competitive. There is also an increase in fixed cost as
continue operation increases labour cost.
Social factor Waitrose Company pays more attention to customers that help them in
fulfilling the demands of customers. Therefore more and more people
love to buy their daily needs products from Waitrose Company stores.
Besides this, the company also keep their products such as foods fresh
(Pavlou and Venkatraman, 2013).
Technological
factor
Waitrose Company is having good knowledge about the needs of
customers and therefore they add up value to their business module. For
this, they set up website and software for free delivery that helps the
customer to buy the products at home.
Legal factor Waitrose company operate its operations by focusing on every rules and
regulation. It produced well under the act “environment agency” and
“Health and safety executive”.
Environmental
factor
Waitrose develops products and services by focusing on environmental
development. It develops good and free parking for its customers that
increase their number of customers (Chen and Yu, 2012).
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M1 critically analyse the macro environment to determine and inform strategic
management decisions.
Waitrose Company is operating its business in the UK. It is operating its business in a very
competitive environment. Through analysing the PESTLE model weakness and strength of c
company has been analysed. When it comes to Political, social, economic and legal condition of
the company, it all is supporting by the various opportunities and external strength at the same
time. Further on, it will accomplish the benefit from the external value. Waitrose Company is
having specialisation in fresh foods, wines, and delicatessen in sales that make it special and
unique from other stores. It has a high-profit margin due to the luxury goods. The company
focuses more on the target customers that help in targeted more customers. So the economic
condition of the company is more than the other stores. It is affected by some political factors but
due to implementing good strategies it is able to cope up with it, therefore, it can able to sell its
product at a lower price even for economies of scale (Chkanikova, 2015).
Conclusion
In the above task, the concept of business strategies has been explained such as its meaning and
its importance. Various frameworks have been used such as stakeholder analysis, environmental
analysis, strategic positioning, and organisational audit.
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Task 2 Assess an organisation’s internal environment and capabilities
P2 Analyse the internal environment and capabilities of a given organisation using
appropriate frameworks
Strategic planning is needed for setting up the work according to priorities, focus energy,
allocation of resources, establishing the agreement, strength the operations and establishing eth
common goal that is possible for responding to the changing environment. There are various
factors that are acting as a barrier to strategic planning. These factors are from the internal
environment or external environment. Internal environment can be applied through the model of
SWOT. The Waitrose Company can apply SWOT analysis for the purpose of analysing the
internal factors.
Strength
 Brand name
 Quality of food products
 Good monitoring
 Skilled labour
Weakness
 High price
 Lack of distribution
 Lack of technical products
 Fewer approaches for monitoring and
analysis
Opportunity
 Implementation of new tools and
technology for sales
 Online business process
Threat
 Level of competition
 Entry of new organisations
 Political and economic scenario
A SWOT analysis of Waitrose Company is as follows:
Strength: The main strength of the Waitrose Company is that it has an effective and well-
establish brand name in the UK and another part of the countries. It offers the quality of products
with affordable and standard price. Further on, it also offers the quality of food products to hotel
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organisations and customers in order to prepare food for customers. Beside this, it is having a
good checking process and good monitoring for delivering food items to their customers. The
company employs skilled labour for performing their operations and make proper utilisation of
resources and make of high profit (Wheelen, et. al., 2017).
Weakness: Some product is having a very high price and also lack of distribution of the product
in the marketplace. This will lead to target lesser target group for sales. Additionally, it has less
technical products and services that affect the operation of the company. Another weakness part
of Waitrose Company is those approaches that are used for monitoring and analysis of
competitor policies.
Opportunities: Waitrose Company is having the opportunity of developing the business as
management and establishes its business in the Asian market where there is high demand for
organic food. Besides this, the application of tools and technology also help the company in
encouraging brand image. Better opportunities can be targeted by the online business process.
Threat: New entrants and level of competition are common threats for all the organisations. It
affects the progress of the company and its future too. With addition to this, the Waitrose
Company need to face the treat related to the political and economic scenario (Cummings and
Worley, 2014).
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M2 Critically evaluates the internal environment to assess strengths and weaknesses
of an organisation’s internal capabilities, structure and skill set.
In order to develop an effective strategy and making development, it is important to analyse the
market that will help in finding out the internal and external strength and weakness. Waitrose
Company uses the SWOT model to analyse the internal business environment in order to monitor
the structure, internal capabilities, and skills of the company. This organisational audit will help
the company in performing and evaluating the factors which are related to daily operations. This
enhances the functional ability and operations (Wheelen, et. al., 2017).
The main strength of Waitrose Company is that it is having a royal warrant for supplying the
groceries items and having the sustainable share of the market. Beside this, it builds up the brand
image worldwide. It employs almost more than 50000 people to accomplish their operations
effectively. But on the other hand, the major weakness of the company is that there is a lesser
margin for the company due to intense competition such as price wars.
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Task 3 Evaluate and apply the outcomes of an analysis using Porter’s Five
Forces model to a given market sector
P3 Applying Porter’s Five Forces model evaluates the competitive forces of a given
market sector for an organisation.
Porter’s five forces are discussing the competitors such as buyers, suppliers and industry and the
potential competitors. This model helps in explaining about the competitive position of the
company at the marketplace. Waitrose Company is the leading supermarket company chain in
the UK that faces lots of competitors within the market or outside the market. The main
competitors of Waitrose Company are ASDA and TESCO.
[Source: Dibb, 2010]
The Waitrose Company apply porter’s five forces in order to gain the competitor's advantage. It
is described below:
Level of competition: In the retail industry, the competition is very high and tough. Predicting
the issue is not a cup of tea for every businessperson. In order to give tough competition,
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Waitrose Company not only sells food and drink but also sells apparel and household goods.
Beside this, it always tries to make the quality of products and services that differentiate it from
others. However, it has been affected by a lot of risk such as devaluating of the brand and
decreasing value for the scope of specialisation (DuFour and Marzano, 2015).
The threat of Substitutes: In fact that there no substitutes for the clothes and foods. This will
help in making the treat for the substitutes that are available in the market. Mainly the main
competitors of the Waitrose Company are ASDA, Peter Jones, Marks and Spencer, and Tesco.
ASDA and Tesco introduce a less affordable alternative. This means that the threat of substitutes
is very high.
The threat of New Entrants: There is a very low threat of new entrants due to the massive
investment of capital for a successful chain store. Besides this, the retail industry is also
considered as the mature and new entrants in the market which is quite difficult in other
industries.
Bargaining Power of Buyers: The bargaining power of the users is very high. There is a high
concentration of the buyers which give the advantage to taste new product and services. The cost
of switching the product is very low that’s why there is a high presence of alternative.
Bargaining Power of Suppliers: Bargaining power is low due to the availability of alternatives.
The Waitrose Company has a high turnover that’s why other customers want a product from
their stores. It means that the company buys more raw materials instead of finished goods for a
high margin (Grünig and Kühn, 2015).
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