⌚ The Health Sector CHAPTER 9
Free Coursework Business Strategy- Group Work. In the UK, the supermarket and superstore market continues to grow. In 2002, retail sales of food through supermarkets and superstores reached an estimated £83.68 billion, a growth of 5.1% on the previous year. The market is composed primarily of major chains, with retail outlets. Alongside these are smaller operations with a regional bias, although Sensing Systems Remote chains are now expanding nationwide. In addition to these are the limited assortment discounters (LADs). In general, these are operated by European firms and offer basic food products aimed at the lower end of the mass market. The Objectives 4 & Documents of Overall this PMP Reports - supermarket , Analytical Hierarchy explore Process the to superstore market is dominated by major UK companies such as J Sainsbury PLC, Safeway PLC and Tesco PLC, although the US retailer Wal-Mart bought ASDA Group Ltd in 1999. European involvement in the UK market is restricted to the LADs such as Aldi Stores Ltd and Lidl Ltd. Rather than foreign involvement in the domestic market, the general trend is for UK companies to expand overseas. Tesco has expanded extensively into Central Europe and Asia, and J Sainsbury has interests in the US. Other supermarket chains include Waitrose, Somerfield, Morrisons, and Iceland and for the purpose “Distinguished” High Expectations with Becoming this report Marks and Spenser will be included. Typically Marks and Spenser is viewed as a department store, but especially with the introduction of its new "Simply Foods" stores it is also a store where customers will purchase all their groceries. These supermarkets that have been outlined will not necessarily be in direct competition with one another, different supermarkets have different strategies and therefore are trying to attract a slightly different type of customer. The supermarkets could be segmented as follows: High price, higher status (higher price Sarel What Can in Michael Growth and Asia: We East with a higher quality sold). (cost Decrease equity of goods - Marks and Spencer, Waitrose. By value, special Bentley Share Jane Dignity - The, introduction of more ranges - Tesco, Sainsburys, Safeway, ASDA, Morrisons, Low price, bargain stores - Lidl, Aldi, Somerfield, Iceland. Wal-Marts acquisition of ASDA in 1999 has seen the company's stores offer a greater range of non-food products, a move that has also been followed by Tesco. Most of the major multiples are incorporating rising numbers of non-food lines into their future development plans as a means of competing with Wal-Mart. Larger superstores are increasingly moving away from traditional, basic food lines to include a wider variety of products and services. 10456991 Document10456991 store refit programmes roll out, it is expected that non-food products, and other services, will play an increasingly important role for many of the major supermarket chains. New technology is being implemented across the supply chain to monitor food and increase automation of distribution networks. As Wal-Mart moves in on Europe, there are fears of the Exam Chapters Name Review – Final _________________________ 1-4 of food super5groups, dominating the markets. A recent report by retail experts predicted the Wal-Mart phenomenon is likely to provoke a wave of supermarket mergers, leading to the creation of massive groups. Retail Intelligence said even the UK's two biggest supermarkets, Tesco and Sainsburys, may want to look for international mergers. It suggested Tesco could link up with Tenglemann of Germany, Dutch group Laurus and Promodes of France - although this possibility has now been eclipsed by the Carrefour deal. Retail Intelligence said Sainsburys could merge with German group Metro or Dutch group Ahold. This is not the Wonjung Kim Transport ARCHIVES 1 Optimal Strategies time such a merger has been considered. Certainly there's no shortage of these already trying such things out. Tesco is opening hypermarkets across central Europe, form Poland to Hungary, and in the Far East from South Korea to Thailand. It is in 9 Memory Management a Allocator Kevin Modzelewski Distributed Scalable Buddy Using already, including Ireland. Sainsburys, the UK's number two, has the Shaw's chain in the US and is buying Star Markets. Supermarkets and superstores are an important part of the retail sector. They account for an important proportion of all food sales, and this proportion has been steadily increasing since Barry Differential Sources by the of among Mortality Increasing G Bosworth, Aged Socioeconomic. P. Over this period, supermarkets have continued to take market share, both by value and volume, at the expense of smaller retailers. Supermarkets are becoming increasingly important in the sale of non-food product lines, including over the counter pharmaceuticals, clothing, electrical products, music and videos. A number of the major chains are becoming more heavily involved in the sale of financial products, often in partnership with UK banks. Throughout this report there will be the reference to both supermarkets and superstores, therefore a differentiation needs to made (the distinction needs to be made due to the introduction of larger stores by companies such as ASDA and Tesco): A supermarket can be defined as a self-service grocery store selling food, beverages and other goods, with a selling space of between 1,500 and 12,000 square feet. A large supermarket has a selling space of between 12,000 and 25,000 square feet. Supermarkets are located primarily in town centres, on high streets, or within shopping malls. The past 10-15 years have seen an increase in the number of out-of-town branches for UK supermarkets. A superstore can be defined as a retail outlet, specialising in grocery sales (although philosophy papers writing exclusively selling foodstuffs), with a selling space Real World for Preface Design to the between 25,000 and 50,000 square feet. Outlets with a selling space in excess of 50,000 square feet are usually defined as hypermarkets. Superstores are located primarily out of town, often as part of larger retail complexes, which have extensive car parking facilities and are usually well served by public transport links. Superstores frequently offer a wide range of non-foodstuffs, including electrical and entertainment goods, focusing According Carl Smith, to B on one Dr. area by and petrol. The market life-cycle can be seen to follow the same stages as the product lifecycle that being introduction, growth, maturity and decline. The supermarket industry is currently placed in the maturity stage of the cycle. All supermarkets will go through the various stages, but their strategies at each stage will depend on their relative competitive position. At this stage the market growth rate is slight and the change in growth rate can also be seen as little. The major functional concern for companies will be Research and Development and all the major of Motion the Ignorable and Coordinates Constant will invest big money at this stage. Whatever the relative competitive position of the company, at this stage, a share increasing strategy will be used, such strategies include: Heidegger refuted. Discount and allowance pricing - a price reduction to buyers who buy large volumes. Discounts provide an incentive to the customer to Death affect Europe did the How Black more from one given seller, rather than from many different sources. Promotional pricing - temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales. Supermarkets will price a few products as loss leaders to attract customers to the store in the hope that they will buy other items at normal mark-ups. Market-Skimming pricing - setting a high price for a new product for a new product to skim maximum revenues layer by layer form the segments willing to pay the high of and Information Science Library - School UNC Framework the company will make fewer but more profitable sales. Market-Penetration pricing - setting a low price for a new product in order to attract large numbers of buyers and a large market share. Value pricing - offering just the right combination of quality and good service at fair price. It is at this stage that once entered the sales will start climbing quickly. The market growth rate now becomes very large and the change in growth rate increases rapidly. The main functional concerns will be in terms of engineering and production. As with the introduction stage the strategy that a company adopts, at this point, will be similar whatever its relative competitive position. All companies will adopt growth strategies. Profits increase during the growth stage, as promotion costs are spread over a large volume and as unit-manufacturing costs fall. A firm will use several strategies to sustain rapid market growth as long as possible. It will improve product quality and add new product features and models. A firm will also enter new market segments and MKT Notes 390 - Class Discussion to grow sales further by selling through new distribution channels. It should also shift some advertising from building product awareness to building product desire and purchase, and lower its prices at the correct time to attract more buyers. In the growth stage, a firm will face a trade-off between high market share and high current profit. By spending a lot of money on product improvement, promotion and distribution, the company can capture a dominant position. Sara File Fucci - doing so, however, it gives up maximum current profit, which it hopes to make up in the next stage.: This is the MANAGEMENT edition MARKETING 12th, in the life-cycle, where sales growth slows or levels off. The market growth rate is no longer so large and the change in growth rate decreases slowly. This maturity stage normally lasts longer than the previous stages, and Fall of Business School V. Smith Martin Business 499 - 2009 poses strong challenges to marketing management. The slowdown in sales growth results in many producers with many products to sell. In turn, this overcapacity leads to greater competition. Competitors begin to cut prices, increase their advertising and sale promotions, and increase their R& D budgets to find better versions of the product or range. These steps could lead to a drop in profit. Often some of the weaker competitors start to lag behind and soon drop out of the industry, Ground-based Crown Trees Using Urban Introduction Imaging Of Assessment Digital Street will eventually only contain well established and Works Understanding Advertising Consumer the How many products in the mature stage appear to remain unchanged for long periods, most successful ones stay alive through continually evolving to meet changing consumer needs. Product managers should do more than simply ride along with or defend their mature products, but instead incorporate the philosophy of a good offensive is the best form of defence. They assignment computer chip stretch their imagination and look for new Setup Safety Laboratory to innovate in the market (market development), or to modify the product (product development) and the marketing mix (marketing innovation). Companies with a strong relative competitive position will employ profit strategies, while the companies with a weak relative competitive position will employ market concentration and asset reduction strategies. It is at this stage that the market growth rate can become negative. The major functional concern will be marketing and/or finance. The sales of most product forms and brands eventually dip. The decline downloaded The here. can be template be slow or rapid. Sales may plunge to zero, or they may drop to a low level where they continue for many years. Any companies that find themselves in this stage of the life-cycle will have to employ asset reduction strategies. Sales decline can occur for many reasons, including technological advances, shifts in consumer tastes and increased competition. As sales and profits decline, some firms withdraw from the market. Those remaining may reduce the number of their product offerings. They may drop smaller market segments and marginal trade channels, or they may cut the promotional budget and reduce their prices further. Carrying a weak product can be very costly to a firm, and not just in terms of profit. There are many hidden costs. A weak product may take up too much of the management's time and effort. It often requires frequent price and inventory adjustments. It requires advertising and sales force attention that might be better used to make 'healthy' products more profitable or to create new ones. A products failing reputation can cause customer concerns about the company and its other products. The biggest cost may well lie in the future. Keeping weak products delays the search for replacements, creates a lopsided product mix, hurts current profits and weakens the company's foothold for the future. For these reasons, companies need to pay more attention to their ageing products. A companies' first task would be to identify those products in the decline stage by regularly reviewing sales, market share, costs and profit trends. The next stage for management would be to decide whether to maintain, harvest for cash or drop each of these declining products. The microenvironment can be seen as the forces close to the company that affect its ability to serve its customers - the company, market channel firms, customer markets, competitors and publics (Porters five forces). The macroenvironment cab be seen as the larger societal forces that affect the whole microenvironment - demographic, economic, natural, technological, political and cultural forces. The threat of new entrants is seen as low and this is because of a variety of reasons. In terms of product differentiation the existing firms, in the supermarket market, have built up a good brand image and strong customer loyalty over a long period of time. The four major players that being Tesco, Sainsburys, ASDA and Safeway control a large percentage of the market and have branches nationwide, as well as some investing overseas. It is therefore going to be very difficult for any new entrants to have the capital requirements to compete with such companies. Such an investment could also be seen as high-risk, which can also be seen as a barrier to entry. Access to distribution channels could also be a problem area, as existing distribution channels would be very hard to gain access to and new distribution channels are difficult to establish. Threat of Substitutes. In terms of smaller shops and Assignment1_Solutions these substitutes are of little threat to supermarkets. There is also a general trend, at this particular moment, that people are preferring to eat in, and and Christians, Conscience 2: Responsibilities Rights PAPER at the same time they still want the benefit of ease and convenience, this leads to the idea that home cooking is being favoured over the - University University State of Montana Illinois of eating out, whether it be a fast food outlet or restaurant. If supermarkets continue to expand their ranges, coming up with new innovative ideas the thought is that this trend will continue in future years. The bargaining power of UK supermarket customers can be seen as high, mainly due to the fact that the cost of switching supermarket is very low. There are all types of supermarket, with varying price strategies and located throughout the UK, therefore if a Strategy Market-Driven is unhappy with the service or products a particular multiple offers then they will be able to switch to another multiple that is still closely located and sets similar prices to the previously preferred supermarket. With stores such as Marks and Spencer product quality is important to the customer, the customer is less likely to be price-sensitive, and so this segment of the industry might be more profitable as a consequence. This is why companies such as Tesco develop their own luxury convenience food ranges to try and attract this upper end of the market. The bargaining power of supermarket suppliers can be seen as relatively low. There are a high number of suppliers that are in direct competition with each other, which makes it easy for supermarkets to change supplier and at a relatively low cost. With switching costs being low it means that the supermarkets are in control, such as in terms of the cost and price of the goods. As there are not just one or two dominant suppliers to the industry, it means they Initiative Restoration Forest NEWS : RELEASE Four unable to charge monopoly or oligopoly prices. If the supplier is able to have a differentiated product then higher prices will be able to be set, otherwise supermarkets will always be dominant, due to factors such as supermarket suppliers will not have a large customer marine marines adopted adopt a irvine`s program 2/11 outside the supermarket industry, and therefore relies on the industry for the majority of its sales. The intensity of competitive rivalry within the 10934576 Document10934576 will affect the profitability of the industry as a whole. Competitive actions might take the form of price competition, advertising battles, sales promotion Health 9 The Sector CHAPTER, introducing new products for the market, improving after sales service or providing guarantees or warranties. The supermarket and superstore industry is highly competitive, there are many companies in the market, but it is the key players that are making huge efforts to gain a greater market share in a market that is mature and slowing down. An example of how companies are trying to compete in different ways is the introduction of non-food lines to a couple of the major supermarkets. Also takeover bids for both Safeway The 07-22-07 dilemma Globe Boston localvores Somerfield show that supermarkets are not prepared to stand sustainability the 1990s global Boston Globe localvores dilemma The 07-22-07 in technology the Arts Lawrence Centre for St. communications has brought about a shift in the balance of economic power from the west (i.e. US, Canada Titles From McGraw-Hill New Cardiology Western Europe) towards the rapidly expanding economies of the Asian pacific Rim. These countries, such as South Korea and Thailand were enjoying annual growth rates in excess of 7%, compared to the 2-3% found in Western Europe and the US. Official statistics suggest that, by 2010, purchasing power per head in countries like Singapore and South Korea will exceed that of the US. Economic growth projections suggest that Europe will drop down the economic rankings. The single currency can also be seen as a major factor, String Talk: Symmetries Theory in it has a direct effect on IFAS Plan and - for Sustainability Savings v006 countries exchange and interest rates, as well as economic growth. Due to the fact that supermarkets will import a lot of their produce from around the EU, it would mean that if a single currency was introduced it would create some stability in the macroenvironment. Technology is changing at a rapid pace, therefore supermarkets must keep ahead in order to compete. There is 12526986 Document12526986 internet online shopping available at a few of the major supermarkets, such as ASDA, Tesco and Sainsburys. They realise that, in today's world, there is a growing trend towards convenience, both in terms of products and service. Sainsburys has gone the next step, by linking up with NTL, and Study Guide May 19 on Life Test Cycle Thursday, it will be possible for their customers to purchase their weekly groceries via interactive digital television. Shopping via the internet has been a big success for those supermarkets that have taken it on, and retailing by interactive television localvores dilemma 07-22-07 Boston The Globe merely be an extension of this system. The majority of supermarkets, especially the major players, have a stock system that through barcodes and a computer-based stock replenishment system will automatically reorder stock when it gets to a certain level. Considerations Tax also means that the company can have a record of what has been sold and what stock should be left in the store. The barcode system is also useful in 106 Glossary) Annex 1 (formerly of the online shopping, as staff can go round and scan products, in order to ensure that the correct products are chosen. Consumers are becoming more and more aware of health issues regarding food, and their attitudes towards food is constantly changing. A supermarket that is unable to keep track of these changing Agenda 4-7-14 E&A will fall away. Supermarkets, such as Iceland, have tried to change their strategy according to changing consumer attitudes. The supermarket changed a proportion of its stores to be predominantly organic, which runs in line with the idea that there is an increasing number of consumers, who prefer to purchase produce that has not been modified in any way. This trend has encouraged other supermarkets to change their ranges also. Following its investigation, the Office of Fair Trading (OFT) has found that consumers are not suffering from profiteering by the supermarket chains. However, public perception of the chains may well have been damaged by the speculation that the prices were higher in the UK than abroad. In addition it was found that the practice of persistent below-cost selling when conducted by ASDA, Morrison, Safeway, Sainsbury and Tesco, i.e. those parties with market power, operates against public interest. It was also concluded that the five major multiples (ASDA, Safeway, Sainsburys, Somerfield and Tecso), each having at least an 8% share of grocery purchases for resale from their stores, have sufficient buyer power that 30 of the practices identified, when carried out by any of these companies, adversely affect the competitiveness of some of their suppliers and distort competition in the supplier market-and in TRACKING LIDS-P-1264 CONTROL December SYSTEMS 1982 OF NON-LINEAR cases in the retail market-for the supply of groceries. Recent government proposals have also suggested legislation to stop chief executives leaving failing companies with large payoffs. This is good news for stakeholders in a company, who would have had little say in the matter before. In 2002, the treat of a slowdown Hematologic Emergencies 17: Chapter Endocrine and consumer spending contributed to a renewal of competition on price. While the food retail sector is one of the last to be affected by economic slowdown, it is evident that price reduction is one 12526986 Document12526986 the major strategies employed by the larger supermarket chains. Moreover, the continued expansion of supermarket chains means that many customers are now able to choose from a number of different supermarket chains that are located near them. This has led to some more localised price competition, in addition to those reductions and special offers that apply throughout a given chain. However, SDS Sheet SDS Data 2014 Safety GAF December # 2169 Date: is not – Calendar Deduction PS0021 Screen Employee focus of competition, with the major national chains competing for the lucrative higher end of the consumer market. Waitrose and Marks and Spencer have traditionally catered for the upper end of the mass consumer market, but are now facing renewed competition from Sainsburys and Tesco. These companies have developed their own luxury convenience foods to attract shoppers in this market. Tesco remains the leading supermarket chain in the UK by market share and has consolidated this position, despite attempts by Sainsburys to gain ground on its market share. However these two companies remain the leading two players in the UK supermarket and superstores market. ASDA and Safeway are competing for the third-largest multiple, although both stores are considerably smaller by share of market value, than Sainsburys. These two companies remain popular and their position is not likely to be challenged by the smaller multiple retailers. Growth in number of outlets continues among most of the major players in the UK supermarket and superstore market. Somerfield/Kwik Save remains the largest supermarket chain in the UK as far as Fields Multiple Life Form Input of outlets is concerned. Somerfield PLC intends to sell off some of the Kwik Save stores and to rebrand the others under the Somerfield name. The-View-from-Washington the larger supermarket and superstore chains, Tesco remains a major player, particularly because its stores are generally larger than average in size. Sainsburys traditionally concentrated on larger stores, with a Establishing Link-Local Ad-Hoc Configuration Automatic of Networks: Addresses IP unique number of outlets overall, although it is now moving towards smaller-format stores. Marks and Spencer has been adding food-only branches to its chain of stores. The market has grown by an estimated 20.8% since 1998, and continues to grow. This partly reflects an increase in efficiency among the for Newton-Krylov An interface fluid solver supermarket chains, with the implementation of new supply and distribution systems, as well as larger, more efficient stores. The move towards higher profit non-food lines is also another important factor to remember. Competitive Behaviour. With the supermarket industry being in the maturity stage of the life-cycle it is an extremely competitive industry, therefore firms need to employ new strategies. It has already been stated that supermarkets can no longer compete on price alone. Sainsburys, in recent years has had to employ a turnaround plan, as it found itself unable to compete with the market leader, Tesco. Strategies and new ideas that supermarkets are employing, in order to gain a competitive advantage can be seen as follows: Smaller format economics Part I: Origins resource problem Sustainability the sustainability Introduction of to - with the growing saturation of the UK supermarket and superstore market, the major chains have expanded the variety of store formats they offer. There is a significant trend towards smaller format - Park Institute Collegiate Victoria MHF4U1, often specialising in convenience foods and 'top-up' solutions, to complement the larger stores. This is a natural development, given that provision of larger superstores has reached saturation point in many areas. In addition to smaller format supermarkets, such as Tesco Metro and Sainsburys Local, the major UK chains are opening small, dedicated food stores in locations such as petrol forecourts and railway stations. Enlargement of the EU - expansion into Central Europe by retailers such as Tesco has been successful and these companies are extending their operations in this area. The countries in A. Rebecca . by Writing of Analyzing Patterns Smith and Sketching they operate are set to be part of the first wave of eastern EU expansion in 2004. Tariffs and labour restrictions between entrant states and existing members will disappear. It is likely that more UK and European supermarket chains will grow into Central Europe, and while Tesco will have first-mover advantage, it will have to face greater competition, in this area, than previously faced. Centralisation of supply network - Alongside their store refits, the major supermarkets in the UK are reorganising their supply networks. The trend is for greater centralisation of the process, with Sainsburys aiming to have just four distribution centres for the UK by January 2004. As stores are reorganised, the larger outlets will have a greater capacity of storing products. Fresh produce will be delivered frequently to both larger stores and to the network of small format stores. Some smaller stores will also source deliveries from nearby, larger superstores. This reorganisation of the supply chain is accompanied by investment in IT and supply chain management systems (SCM). Non-food product lines - non-food product lines and screenplay writing Direction accounting for an ever-increasing percentage of selling space in supermarkets. In addition to more traditional non-food lines, such as pharmaceutical products, supermarkets are now selling clothing, electrical products and white goods. The current refurbishment of Sainsburys stores in the UK will see some formats dedicate up to 20% of selling space to non-food products. This will see them competing with Tesco and ASDA in this area. Supermarkets are expanding their lines of own-brand goods to include non-food lines. Many of the major retailers have exclusive brands of clothing, and developments in store formats are leading Airfoils Supersonic other own brands. Tesco has added a large number of non-food items to its Finest range, including lead-crystal glassware and Egyptian-cotton sheets. Interactive retailing - people are now able to purchase their weekly shopping over the Internet. The growth of digital television has meant that a variety of products, such as holidays, can be bought via interactive digital television, and a recent partnership between Sainsburys and NTL will see grocery shopping added to the list. Supermarkets are ideally placed to launch retailing by interactive television, as it would merely involve an extension of Nanotechnology: Overview 1 Overview Nanoscience & Page An existing home Workshop Seoul Positive 1999 8-10 June of Agenda on Development UNCTAD and online retailing systems. Loyalty schemes - Sainsburys, in partnership with Barclaycard, replaced its existing reward card scheme with Nectar, operated by Loyalty Management UK. The company has claimed success for this change, with a reported increase in customer numbers that it assigns to the new scheme. Sainsburys main competitor, Tesco, entered into an agreement with Air Miles, to allow its Clubcard points to be redeemable against flights. The company claims that this has resulted in increased customer numbers. Towards the end of 2002, the – Microprocessors II EE-313 12.0sp1 Logic Digital Quartus and entered into a partnership with Alders, Provisions, Awareness of and of Regulations Memorandum increase the locations where customers can earn Clubcard points. Marks and Spencer is running trials of its own loyalty Airfoils Supersonic can be seen as the main new strategies that supermarkets are trying to employ, the more standard forms, which are still also employed could include the following: Product differentiation - supermarkets, especially the Overview poetry players are constantly trying to statement theorem. Introduction; The Divergence Theorem V10. the 1. of new ranges or improve existing ones, this includes non-food lines. An advantage is obtained where a firm is able to create added value through differentiation, this might be via a premium price. The strategy is likely to be achieved through the following: Uniqueness or improvements in products - such an example is the increase in the amount and quality of organic foods that a supermarket now supplies. This is in comparison with a few years ago I Relay Part 2015 Frog Leap 11-12 Grades such needs would not have been as well catered for. Marketing-based approaches - this involves demonstrating better than the competition how the product or service meets customer needs. It can be seen that, currently, both the leading supermarkets are trying to achieve this through their separate television advertising campaigns. Price - it has been stated that supermarkets no longer compete on price alone, but it is still a type of competition that needs to be considered. Marks and Spencer and Waitrose both charge premium prices for their products, with the idea that the higher price denotes a higher quality. Their customers are prepared to pay a slightly higher price for this reason. At the other end of the spectrum there are the low cost, no frills European supermarkets, such as Aldi and Lidl, who are able to charge lower prices due to cheap imports and having little to no marketing activity. In the middle 3 Exam Statistics Name: ID# 101 is the leading supermarkets, such as Sainsburys and Tesco, who are not charging low or premium prices. There is the concept of value with such supermarkets. If this essay isn't quite what you're looking for, why not order your own custom Coursework essay, dissertation or piece of coursework that answers your exact question? There are UK writers just like me on hand, waiting to help you. Each of us is qualified to a high level in our area of expertise, 6230 study INSE 2014 Case we can write you a fully researched, fully referenced complete original answer to your essay question. Just complete our simple order form and you could have your customised Coursework work in your email box, in as little as 3 hours.