Environmental analysis
SWOT analysis
Strength
Ø Established business of over 30 years
Ø Strong brand association
Ø Nationwide coverage
Ø Entering European market
Ø Unique products and ingredients
Ø Growing profit, earning and dividend growth
Ø Sound reputation of quality products
Ø Featured the 'Times 100 best companies to work for' in 2003
Ø Ability to expand to supply base to meet sales
Ø Good product and market knowledge
Ø Strong market research team.
Weaknesses
Ø Staff retention
Ø Seasonal downturns (summer)
Ø High product wastage
Ø Poor peak time control
Ø Decline in traditional staples such as bread and rolls
Ø Low skilled and trained staff
Ø Lack of in- house design and development
Ø Weak information transfer between front line staff and management
Ø Inadequate training facilities for staff
Ø Late delivery arrival times
Ø Lack of store managers
Ø Can seen be as a minimal rewarding job
Opportunities
Ø Entry into European market (Belgium
Ø Diversification (selling brand foods in supermarkets)
Ø Plans to add 45 more shops in UK 2004
Ø Plans to sell ice cream products
Ø Increasing adoption of market research
Ø Future outlook to include seating
Ø Possibility to extend to pre order foods
Ø Plans for EPOS (electronic point of sale)
Ø New refurbishment plans for 2004
Threats
Ø Competitors
Ø Hot weather
Ø Increasing health cautious society
Ø Entry of supermarkets selling ready made sandwiches and similar products
Ø Increasing cost of ingredients
Ø Bad media coverage of food industry (e.g. TV programme restaurants from hell)
Ø Increased concern for hygiene
Ø Take away ready made foods(now it is possible to eat spaghetti Bolognese cooked from frozen as ready meal in less than 10 mins by microwave)
Ø Increased government regulations in relation to food hygiene and contents of ingredients.
PESTEL analysis
Political
Ø Changes in government & law
Ø Increased legislation on food hygiene
Ø EU laws, regulations & political changes
Ø Increased environmental pressure
Ø Major events (war and terrorism)
Economic
Ø Economic booms and slumps
Ø High interest rates and inflation
Ø Disposable incomes and unemployment levels
Ø Euro effecting cost of ingredients
Ø Weak consumer expenditure
Social- cultural
Ø Changing consumer needs & expectations
Ø Increasing time cautious society
Ø Communication barriers between staff and customers
Ø Social responsibility
Ø Increase in health and hygiene.
Technological
Ø (EPOS) Electronic Point of Sale
Ø advanced cooking and catering equipment
Ø more complex market research tools
Ø marketing (website & video displays)
Ø wider circle & future developments
Environmental
Ø high waste disposable
Ø pollution (mainly rubbish)
Ø building controls
Ø environmentally friendly ingredients and products
Ø Recycling facilities.
Legal
Ø Health and safety legislation
Ø Employment law (minimum wage & part time workers rights)
Ø Food hygiene &product safety
Ø Consumer rights
Ø Building controls
Porter Five Forces
Potential entrants
Initial cost of capital
Product differentiation
Economics of scale
Bargaining power of suppliers
Large number of suppliers
Importance of suppliers
Very easy to switch
Competitive rivalry
Diversification
Similar companies
Non perishable products
The power of buyers
Undifferentiated products
Unspecified target group
Money saving offers
Threat of substitutes
Canteens
Fast food companies
Supermarkets
Gregg's current strategy
A great place to work
To place a major emphasis on promoting culture that encourages personal development, leadership qualities and creativity.
Enjoyable Experience
To deliver customer satisfaction by offering great tasting food at unbeatable value and to the highest standards of food safety.
Business Excellence
For staff to seek continuous improvement in their areas of responsibility enabling them to make a real and lasting contribution to the objectives of the company.
Challenging targets
To strive to achieve a turnover of £1 billion by 2010 through continued core growth and the acquisition of new units, taking to over 1,700 shops.
Caring for the community
To place emphasis on social responsibility to encourage an even greater involvement in local charity activities and social projects.
The strategic options that I have chosen are:
Ø Market penetration
Ø Product development
Ø Differentiation
Ø Market development
Gregg's corporate objective
Objective 1- to remain the UK
Objective 2 – to strengthen and enhance the profitability of Gregg's through business activities nationwide
Objective 3 – to build on Gregg's strengths and reputation of bringing a new generation of unique bakery products
Objective 4 – to be Europe 's finest bakery related retailer
Evaluation of strategic options
Ø Market penetration relates to objective 2
Ø Product development relates to objective 1
Ø Differentiation relates to objective 3 & 4
Ø Market development relates to objective 4
Conclusion and recommendations
Ø Gregg's will remain the UK
Ø Gregg's will be a successful and established throughout Europe in years to come.
Ø Gregg's will continue to build and increase its profit, earning and dividend growth
Recommendations
Ø Gregg's fully undertake research into their potential European markets
Ø Gregg's continue with their key strategic developments.
Resources
Ø Gregg's annual report 2003
Ø Gregg's interim statement 2003-10-22
Ø Gregg's website (www.greggs.co.uk )
Ø Financial times websites (www.ft.com)
Ø Google search engine (www.google.com)
Ø Johnson G & Scholes K (2002) Exploring Corporate Strategy, Prentice Hall , United Kingdom
Ø Thompson J (1997) strategic management, Thompson Business Press, United Kingdom
Ø UK
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