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Planning for Expansion - Waitrose

University: University of Roehampton London

  • Unit No: 10
  • Level: Undergraduate/College
  • Pages: 13 / Words 3193
  • Paper Type: Assignment
  • Course Code: BUAD 497
  • Downloads: 212
Organization Selected : Waitrose

INTRODUCTION

Globalisation is a process through which companies start and develop their international business and start operating on a worldwide scale. Here this present report will be prepared on Waitrose which is planning to expand its chain of supermarkets in Nepal. Waitrose is a chain of British Supermarkets whose headquarter is in the United Kingdom. Organisation has many stores all around the United Kingdom. The establishment was founded in the year 1904 which is now the sixth-largest retailer of groceries in the United Kingdom. In this present report background of the company and its objective will be covered. In addition to this, Analytical tools will be used to determine the business environment. The competition will also be discussed in brief that will be faced by Company while starting a business in Nepal. Furthermore, Different analytical data and statical charts will be presented to understand data more clearly.

Main body

Information on Waitrose

Name of the selected organisation: Waitrose

Allocated country: Nepal

Objective: Waitrose has an objective of starting chain of supermarket in Nepal. Company has major aim of increasing its sales by the end of the financial year. It has focused on analysing the environment of Nepal so that it can determine the needs and wants along with culture and believes of people (Kirton and Trebilcock, 2017). Major objectives of Waitrose is to expand its business in developing nation along with that it also aims for giving employment to the people of the country.

Like every other company Waitrose is also planning of increasing its profits and growth of the organisation. To meet the same it is aiming to open chain of supermarket in Nepal.

Background of Waitrose

Year of establishment

Waitrose was founded in the year 1904.

Products and services

Waitrose is a chain of supermarket of food. Fresh vegetables, Wines, essential items required in Kitchen, etc.

Location of Headquarter

Waitrose has its head office is in Wallace, Berkshire, United Kingdom.

Income of Waitrose

As per the recent data, Waitrose operating income was £173.5 million with the net income of £123.3 million.

Revenue of Waitrose

The chain of supermarket has annual revenue of £5400.4 million.

Major competitors

Those organisations which deals in variety of products in retail industry are the major competitor of Waitrose. TESCO, Walmart, Asda and Morrisons are the biggest competitor of Waitrose.

Results

As per the latest survey Waitrose has become successful by 71% in store sales whereas, it made it sales up to 74% through its online website.

Background of Nepal

Continent

Asia

Neighbour countries

India, Tibet and china are the neighbour countries of Nepal

Population size

As per the recent data, 2.93 Billion is the population of Nepal.

Gross domestic product

2447.2 USD is the Gross domestic product of Nepal.

Inflation rate

4.20% was recorded in august 2018.

Unemployment rate

In 2017 it has decreased from 3.40% to 3.20%.

Important sectors of the economy of Nepal

There are different economy in every country. In Nepal, there are different sectors in which services is the most important sector.

Agriculture – 35%

Industry- 20%

Services contributes 45% to the economy.

Background of Nepal will help the company in knowing about the growth and size of market. Population will help in determining about the number of supermarkets company can establish in a city. As population size of Nepal is low so it will be a bad decision if organisation comes with a plan of opening more number of its ventures in the country (Lasserre, 2017). It will increase the cost of the company. So population is one of the major factor that needs to be considered before opening new venture in any country.

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On the other hand, Inflation rate is also the most important factor that should be considered while planning for opening business in any new country (Inflation rate of Nepal, 2018). As if any nation inflation rate will be high then purchasing power of people will be low. So due to low purchasing power business of the company will get affected. That is why inflation rate is a major factor that is to be kept in mind and policies should be made accordingly.

Discussion of the allocated business environment

PESTLE Analysis

This is a way of knowing about the external factors that will affect the business and its functioning. All these factors are explained below in detail.

Political factors

Nepal is considered to be the most stable country for expansion as it is a developing country. Waitrose is planning to expand its business in Nepal where it will help the company in political terms. On the other hand, the country has sometimes very unstable political state which is not at all predictable. It affects all the businesses that are running in the nation. Like while having any strike of supermarket all the organisation needs to close their business. In Nepal sometimes strike can last for more than a week as well (DelGiudice, Carayannis and Maggioni, 2017). So malls will be closed for long time and business gets affected to a great extent. Waitrose should consider this factor as the most important because it will result in affecting the sales and profits of the company. Nepal has unorganized political sector which will make tough for Waitrose in carrying out its business plans. Due to increasing inflation rate in the country it is tough for people to increase their purchasing power. So Waitrose should make flexible policies and procedures in order to deal with such fluctuating political conditions.

Economic factors

These factors are the most important which affects the business in great way. Economic growth means people have good purchasing power and they will spend more on shopping. The purchasing power of people of Nepal is low due to higher inflation rate and many other factors. Unemployment in the nation is also a factor of low shopping trends. People of Nepal think and make their budgets before spending (Leonov and et.al., 2018). But every company has to make money in order to grow in long run. So Waitrose should launch its products at low prices so that it can be affordable by consumers. Overcrowding in city like Kathmandu will make people switch to different supermarket if prices will be affordable. Waitrose should make customer friendly policies and focus on customer satisfaction by delivering the best quality products. It will help the company in expansion of business in country like Nepal where economic condition are adverse.

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Social factors

Nepal is a country of traditional phase where environment is composed of values, beliefs and culture. Waitrose should understand the culture of Nepal and should make a detail study on trends that prevail in the country before making its policies and procedures. In addition to this, Waitrose should change the perception of people about the prices that prevail in supermarket. People of Nepal have the thinking that supermarket always have prices of products. Waitrose is trying to socialise with citizens of Nepal and trying to satisfy their needs.

Technical factors

Nepal is a developing country where there are not high technological systems. Supermarkets and other companies does not have yet came up with higher innovative ideas. So Waitrose should plan to come with higher technology so that it can sustain in market for long term. As new and innovative ideas will help in attracting maximum number of people. Everyone these days get easily attracted towards new technology (PESTLE Analysis, 2017). This will give a way to the company in covering maximum number of people. Technology is something that makes it easy to carry out processes in running the business. So Waitrose should plan its development process before entering in to the market of Nepal.

Legal factors

While establishing a new venture in a country every company should go through the legal proceedings. Each country have their own laws and regulations which are to be followed by home countries as well as multi national company. Labour laws of Nepal along with other laws are to be followed by Waitrose. General regulations are to be followed by company in order to work more specifically and properly. Legal process regarding imports and exports should also be followed by organisation in order to make the process and work smoothly. Businesses are run always as per the law of the country. Nepal also have their own rules and regulations which must be followed by Waitrose before starting the chain of supermarket in the country.

Environmental factors

Waitrose should try to be more eco friendly in terms of every aspect. Company should try to be more eco friendly so that it will make consumers more satisfied. In Nepal it is always being followed by people to dispose off waste at its proper place (Murray, Skene and Haynes, 2017). So, Waitrose should keep this mind while making environmental policies that it keep the nature clean. Along with that all policies followed by the organisation must be such that it prevents eco system of Nepal. It is the duty if every citizen of the nation to keep their country clean. But When a Multi national company establishes its business than it is the duty of the organisation to run business in most eco friendly manner. Waitrose is also planning of increasing its profits and growth of the organisation. It already has many stores all around the United Kingdom. To meet the same it is aiming to open chain of supermarket in Nepal. This keeps the environment clean and make people happy about the fact that organisation follow all the rules and regulations of the Country. Every company has the duty of keeping environment clean by using eco friendly ways of production (DelGiudice, Carayannis and Maggioni, 2017). Waitrose should keep in mind that it complies with all such applicable factors and does not make any harm to the environment.

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Application of an appropriate analytical approach

Porter's Five Forces Analysis

It is an analysis of the structure of the industry in order to find the effective ways of competitive advantage. So to determine the competitive environment of Waitrose, porter's five has been carried out to know the same. Waitrose needs to consider all these factors for effective functioning of its business activities.

Threat of substitute products and services:

In grocery retail market threat for food items is low as in comparison to non food items. In retail market, small shops of food items and groceries will not be a threat for Big company like Waitrose (Jia, Guo and Barnes, 2017). Waitrose already offers wide range of products which makes it irrelevant for the company to be in threat of substitute products. In addition to this, This company already offers high quality products at reasonable price. Waitrose can meet the threat of substitute of non food items by giving the best quality services to Citizens of Nepal. Threat can also be met by understanding the needs of consumers and deal with them accordingly. This will help Waitrose in establishing and running with success in Nepal.

Threat of Entry of New competitors

Threat of entering new company is low because it requires higher capital investment to establish business in new country. In addition to this, Waitrose is planning for opening a new venture in Nepal where threat to new entry is comparatively less. Although if any home company in Nepal will try to expand its business in retail industry (Foreign Direct investment of Nepal, 2018). It will not affect much to Waitrose because it has enough capital and other aspects to give a tough competition to the other companies. Technology is something that makes it easy to carry out processes in running the business. So Waitrose should plan its development process before entering in to the market of Nepal. Waitrose can tackle threat of new entrants by way of coming up with innovative product is that it can attract maximum number of customers.

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Bargaining Power of Buyers

It is comparatively high because products slightly differ so it gives a reason for buyer to switch. Waitrose should make such offers and discounting policies that buyer will not switch easily to other brand. Online shopping makes very easy for people to compare prices and select accordingly. So Waitrose should offer products at comparatively low prices so that it can start at low pricing in Nepal. This will attract consumers and give a grand entry to the company in Nepal. As while making entry in any country company needs to bring something different so that people can look at what new has come. This will allow the company to establish in the nation.

Bargaining power of Suppliers

It is low because every supplier wants to get deal with big companies like TESCO, Asda, Waitrose etc. Even suppliers decreases prices for big companies as they purchase in large quantity. In retail field high negotiation skills are required so that it can take out prices from companies (Hazen and et.al., 2018). Waitrose is planning for opening venture in Nepal where it should come with low prices and that is possible only by way of building efficient supply chain with many suppliers. Suppliers always try to get connected with such big companies so Waitrose has to deal with them in easy way. This will reduce the cost of the company and lowering the prices will help in giving competition to already existing market of Nepal.

Rivalry among existing competitors

In a country like Nepal there are many small retailers which covers large market of the nation. Due to higher competition among existing firms it is easy for Waitrose to launch its ventures. As due to the immense competition between the firms it will lower down the prices of the products (Kew and Stredwick, 2017). Waitrose is planning to merge its business with small retailers of Nepal. So that such collaborations will increase the market size and thus it will make entry easy for the company. In addition to this, Competition can also be met by offering different schemes and discount offers so that it will attract maximum number of people. Company should make such policies which makes it different from its competitors. This will make an easy entry and expansion of business in country like Nepal. 

Use and application of appropriate data

Nepal FDI

Illustration 1: Foreign Direct investment of Nepal
(Source: Foreign Direct investment of Nepal, 2018)

Nepal Inflation Rate

Illustration 2: Inflation rate of Nepal
(Source: Inflation rate of Nepal, 2018)

Conclusion

From the above report it has been summarised that Waitrose is growing chain of supermarkets which needs to expand its business in various markets or countries. This study identified that there are various external factors in a business environment. These factors such as Political, social and legal etc. that affects the activities and function performed by any business to achieve its organisational goals. In order to expand its market in Nepal, Waitrose needs to examine and consider all these factors for effective functioning of its business activities. Furthermore, the report described various influencing elements through porter's five forces approach that helps in knowing about the competitors and their impact on new venture. In addition to this, Various statistical data has also been presented for knowing the different facts and figures.

Related Service: Case Study Help

REFERENCES

Books and journals

  • Kirton, J.J. and Trebilcock, M.J., 2017. Hard choices, soft law: Voluntary standards in global trade, environment and social governance. Routledge.
  • Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
  • Del Giudice, M., Carayannis, E.G. and Maggioni, V., 2017. Global knowledge intensive enterprises and international technology transfer: emerging perspectives from a quadruple helix environment. The Journal of Technology Transfer, 42(2), pp.229-235.
  • Murray, A., Skene, K. and Haynes, K., 2017. The circular economy: An interdisciplinary exploration of the concept and application in a global context. Journal of Business Ethics, 140(3), pp.369-380.
  • Jia, Q., Guo, Y. and Barnes, S.J., 2017. Enterprise 2.0 post-adoption: Extending the information system continuance model based on the technology-Organization-environment framework. Computers in Human Behavior, 67, pp.95-105.
  • Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context. Kogan Page Publishers.
  • Hazen, B.T. And et.al., 2018. Back in business: Operations research in support of big data analytics for operations and supply chain management. Annals of Operations Research, 270(1-2), pp.201-211.
  • Leonov, P.Y. And et.al., 2018. The Use of Analytical Tools in the Conduct of Internal Control Procedures. KnE Engineering, 3(6), pp.18-23.
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