External Analysis

Describe about the Report on the Kwik Save supermarket?

This paper described the strategic management plan for further development for Kwik Save. So, this paper covers the external and internal analysis for Kwik Save supermarket. The main objective of this paper is to evaluate the various aspect of strategic management plan in the perspective of growth and development. This plan must be concerned with provided case of Kwik Save supermarket in the United Kingdom. This paper enables to explain the portals analysis of Kwik Save supermarket. Kwik Save is retail or groceries sector organization which is founded by Albert Gubay. Paul Nikklas was director from 2006-2007.

This chapter is evaluated the porter’s five forces analysis in the context of Kwik Save Group. These porters’ five forces are classified in five parts that are described below:

Threat of new entrants: The UK grocery market, especially Swik Save is dominated by some competitors such as Sainsbury’s, Tesco, Safeway and Asda that dominate the 70 percent of market share. From last 30 years, grocery market transformed into the supermarket business. The economies of scale, capital requirement in the initial stage, customer or supply loyalty and experience are the main barriers for any new entries. These kinds of forces have potential to reduce the profit margin for grocery or supermarket chain and suppliers. UK based suppliers are also threatened by the growing skills and abilities that they can provide products at cheaper deals. (Narayanan & Fahey 2005)

Bargaining power of suppliers: These kinds of forces shows the bargaining powers of suppliers that can affect by grocery yard that threat of losing their business to the big scale of supermarket. So, stores such as Tesco and Asda communicating promotional prices from suppliers.

Bargaining power of customers: These force presents the customer power in the business that customer is the kind of market. In the other words, customer is the wholesale of the market. So, we need to fulfill the customer desires or needs. If customer will be satisfied then it will come again and buy the new product from your stores.

Threat of substitutes: It is able to reduce the demand for a specific product. There is lot of threat to switching the alternatives product. Swik Save is facing lot of challenges by the substitute product. Their closest competitor is providing same product in the cheaper price as compare to their own products.

Bargaining power of competitors: Swik Save Supermarket competitor is providing very cheap product as compare to own product so we need to produce more quality product in cheaper price. Then, customer will attract with our product or services. (Narayanan & Fahey 2005)

Characteristics of the industrial sector of kwik save: These are the significant characters of the industrial sector of Kwik Save that is described below:

Clear vision: Kwik Save Company has clear vision as well as industrial sector perspective. There is clarity about target group and value proportion. This clear vision of the Kwik Save improves the quality of the product or services that are offered by Kwik Save Company. Industry need to made clear vision to fulfill their objectives and goals. Further, vision plays an important role in the organization because it helps to brand building and innovation in technology.

Internal Analysis

Execute: Execution is significant character of Kwik Save industrial sector. Without proper execution plan, organization is unable to raise their sales volume and profit margin. Industrial sector of Kwik Save produce many product or services that helps to improve quality of the specific product. If organization execution plan is not proper then it would be difficult to sales their product in the market. Nowadays, competition is increasing day to day.

Develop strong culture and set of values: It is very hard to maintain excellent over time. It is easy to look decline or fuzzy. Kwik Save Company is always accompanied through strong culture and values. It helps to raise energy and support the vision and execution as the business matures. If industrial culture and their values will be good then it would helps to raise the Kwik Save brand image.

Deliver emotional benefit: Most of companies such as Kwik Save have gone beyond to deliver emotional benefit. Kwik Save Company customers love of food using natural ingredients.

Scale: Kwik Save Company needs to scale. The footprint is hard to expanding because its price is too high.

Integrate social and environmental program: This is main character of the Kwik Save that is helpful to calculate the social and environmental program. If social and environment program will be merge that would be beneficial for organization growth and development.

Compare and contrast the existing competitors with Kwik save: we would compare Kwik Save Company strength, weakness and trends with the Sainsbury and Asda organization that is described below:

Sainsbury and Kwik Save: Sainsbury is the number three supermarket chain in the UK and it has 14.30 percent market share while Kwik Save became most popular brand and it is listed in FTSE 100 Index. Sainsbury company family member has around 15 percent market share of the organization while Kwik Save listed in FTSE 100 Index that mean everybody can buy their share and increase their share holding. Sainsbury examine main five field of growth such as great of at reasonable costs, raising number of complimentary food ranges, home delivery, reaching customers by additional channels, active property management and developing grocery market space while Kwik Save expanding their overall growth in the sales volume and profit margin perspective. Moreover, Sainsbury has two kinds of store format such as traditional and convenience stores. A general report said that it has 792 stores in 2009. Out of them, 502 are related to traditional supermarket and 290 related to convenience stores while Kwik Save has short stores as compare to Sainsbury Company. Sainsbury’s store has more than 35000 products while Kwik Save has 5000 products. But, they are expanding their business. Kwik Save was the first organization which adopted scanning technology and EPOS to early in the retail sector while Sainsbury has adopted many net technology to raise their quality in product or services.

Asda and Kwik Save: The average size of Kwik Save shop was less than 10000 square feet that is vey less as compare to its competitor food shops such as Asda. Kwik Save has second largest company in the UK market while Kwik Save most famous brand in grocery market. Asda stores started in the 1949 in Leeds while Sainsbury was established in 1959 in the Rhyl. Asda has British feeling in stores and determine from its parent family while Kwik Save has open minded company that is beyond from family member. It works for all kinds of customer and its board of member related to common people. Asda has 343 stores in the current times while Kwik Save has little less stores as compare to Asda and Sainsbury. Asda company presence in the North of England and expended its business in the South area of England while Kwik Save Company is popularized in the all over the England.

Characteristics of the Industrial Sector of Kwik Save

In the regards of internal analysis, we would discuss the component of strategic capabilities of financial, human & physical, comparison between strategic and threshold and porter’s value chain through VIRN frame to evaluate the improvement in the Swik Save.

Strategic capability is the set of resource, capacities and skills which create competitive advantage for the firm. Further, strategic capabilities are the ability to employ competitive strategies which allow raising its value. It focuses on firm’s assets, market position and resources. Redundant, dynamic, threshold and distinctive capabilities are the component of the strategic capabilities. Here, redundant capabilities determines the computer or network system component such as hard disk drives, switches, fans, servers and telecommunication links which are installed to back up primary resources in case they fail. (Ferkins, Shilbury & McDonald 2005) Swik Save is expanding their products that are related to redundant component of strategic capabilities. Dynamic capabilities are the ability firm to regenerate and restore its strategic capabilities to meet the desire of changing environments. Threshold capability means value that serves a benchmark for comparison which may call for complete review of the condition. Distinctive capabilities are the component that can dominate to achieve competitive advantage by relationships.

Comparison between strategic/distinctive and threshold: The distinctive competencies are also known as core competencies that are unique and they wanted to make their companies rank higher as compare to their closest competitors while threshold capability set a benchmark for competitors. In the context of Kwik Save, both capabilities are the significant because Kwik Save is expanding their business so they can use both of them.

Porter’s value chain: The idea of the value chain is the range of activities that involves production, marketing, design and distribution business to bring a product from conception to delivery. It is helpful to classify the occupation system into a value generating activities. Porters value chain analysis introduced in his book “The Competitive Advantage”. Porters advised that the firm is classified into primary and support activities. (Chyi-Lee & Yang 2000) These are primary activities that are described below:

Inbound logistic: In the regard of VRIN frame work, inbound logistic includes relationship with supplies. Transportation, testing, information system, material handling and material storage kinds of activities are required to receive, store and disseminate. Kwik Save stores expanding their product so they need to maintain all activities in a proper way. (Arline 2015)

Operations: Operation activities need to make proper strategy for raw material and finished goods stock. Because of Kwik Save store is product based supermarket those have several product so they need to adopt proper method for operation to fulfill the Kwik Save growth and development.

Outbound logistics: In the perspective of VRIN frame work, once products have been produced then they need to distribute to several centers such as retailers, customers and wholesalers. Outbound logistics is also called as distribution of finished goods.

Marketing and Sales: After the distribution of the product, we need to sale the specific product in the specific areas. The marketing strategy is helpful to build an effective strategy in the Kwik Save Store.

Comparison and Contrast of the Existing Competitors with Kwik Save

Services:  After the sold of product of the Kwik Save store, they need to provide proper service facilities. Then, customer could trust on it. They should provide warranties and guarantees in their products to attract customer.  (Arline 2015)

Further, support activities help the primary activities to achieve their competitive advantage. Support activities are described below:

Procurement: This department helps to arrange raw material in the minimum costs with best quality. If they will arrange raw material in the lowest cost then they can produce quality product with lower price. (Arline 2015)

Technology development: The use of technology to gain competitive advantage is significant in current environment. Technology can reduce the cost. So, Kwik Save store adopted technology to raise their sales in the UK market.

Human resource management: Supportive activities of the firm are to recruit, train and develop the correct people for the firm to be growth and development. If Kwik Save store will recruit well qualified employee then it would be good for organization success because qualified employees can read the customer desires and needs and it would be helpful in decision and policy making in the organization. Qualified employees can make proper plan as compare to unqualified employees. (Chyi-Lee & Yang 2000)

Firm infrastructure: Every firms desire to ensure their legal, management and finance structure work that helps to drive the firm forward. Swik Save Group has well designed infrastructure group in the worldwide. So, they are able to extend their business in the UK and abroad countries. (Arline 2015)

TOWS matrix: TOWS metrics followed same process of SWOT analysis. It includes threats, opportunity, weakness and strength. In the regard of Kwik Save Company, it evaluates the threats about the company and try to rectify it before launched the product in the market. If they will find the threats from market and reduce it then they will search the opportunity. Those opportunities can reduce the weakness so they prefer the opportunity first. If those opportunities reduce the weakness of it then Kwik Save product became strength of it. Nowadays, companies following TOWS matrics instead of SWOT analysis. These are the analysis of the TOWS matrics that is described under the strategies of Kwik Save Company:

Threats: This is main strategy of the Kwik Save Company that they determine the threats of the company first in their evaluation about company product or services. Sainsbury, Asda and Tesco are the main competitor of it that is big threats how to stable our company between the strongest competitors because they produces quality product with lower price. (Koontz 2010)

Opportunity: Kwik Save expanding their product variety. Nowadays, they have more than 5000 product in their stores. They are increasing it day to day. Kwik Save strategies to increase their product variety as compare to their competitor because Sainsbury has more than 15000 products.

Weakness: The main weak of the Kwik Save strategy is to that their product haven’t any brand image because their competitor such as Adsa and Sainsbury are very famous brand in grocery or supermarket sector. (Koontz 2010)

Strength:  The strength of the Kwik Save strategy is to that it is much popularized store in the UK zone. People like their product or services that raise their sales volume and profit margin.

SAF criteria: It is very important in the criteria that affect the Kwik Save growth and development. It is also helpful in the strategy evaluation of Kwik Save Company. Kwik Save have lot of competitor such as Tesco, Asda and Sainsbury so Kwik Save need to adopt new product variety which is differ from their competitor that raise their brand image. Because Kwik Save has low fund as compare to their competitor instead of this it is producing unique and new product as per consumer demands. (Coles & Porter 2011)

Conclusion & recommendation: From the above discussion, it can be concluded that clear external and internal analysis as well as high ability to adopt new technology in the Kwik Save Group helps it to maintain its competitive position in the all over the world. Our recommendation for the Kwik Save strategic management plan for development in the context of TWOS matrix that is following below:

• Kwik Save Group must adopt new technology to fulfill customer desires or needs. New technology means machinery that reduces the costs of product and produce high quantity which can satisfy customer requirement. Kwik Save supermarket should evaluate TWOS to provide better quality to their customers.
• Kwik Save should provide alternative source of new idea for customer who visits in the super market frequently. It will promote organization that will help to organization growth and development.
• Kwik Save Group should extend their business out of UK zone because people like their product and its demand is increasing constantly. If they will increase their business in abroad countries then all kinds of people bought it. It will raise their sales volume and profit margin.

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