International Expansion Plans Of Waitrose In Singapore: Analysis Of Internal And External Environment

Background of Waitrose

The international expansion related strategies of the organizations include the plans and the activities that are based on its entry in the new market areas. This is a crucial step which needs to planned properly by the management of the company so that it is able to achieve the objectives in an effective manner (Dagnino, King and Tienari 2017). The major decisions that need to be taken by the company related to the product and service offerings and the deciding the target customers as well. The positioning of the brand in the new market area is important for the proper operations. The organizations thereby need to analyse the internal environment and capabilities and the external environmental factors so that the revenues can be increased with the help of proper strategies (Cania 2014).

The report will be based on the international expansion plans that have been made by Waitrose to start its operations in Singapore. The internal environment and operations of the company will be analysed. The external environment in which the company is planning to operate will also be analysed in detail. The objectives related to the successful expansion of Waitrose in Singapore will also be analysed in the report (Dogan 2015).

Waitrose is a British chain of supermarkets which constitutes the retail division related to food of the largest British employee-owned retail company named John Lewis Partnership. The head office of the organization is located in Bracknell, Berkshire, England. The company has more than 350 branches in various areas of United Kingdom. Waitrose has acquired the position of sixth-largest retailer of grocery in the United Kingdom (Limited 2018). The organization also exports its products to various countries in the world and it has shops in the Middle East as well. The company has been described by the newspapers like, The Guardian and The Telegraph for having upmarket reputation. The organization has the royal warrant which allows to operate in the supply of groceries, spirits and wines. Waitrose was established in the year 1904 by Arthur Rose, Wallace Waite and David Taylor in West London. The supermarket chain of the organization was opened in the year 1955 in London (Limited 2018). The counter service for offering fresh meat, cheese and fish was opened in the year 1981 and further the company became a major supermarket in 1983. Waitrose has continued the expansion since the year 2000 which includes purchasing shops from Somerfield Morrisons (Limited 2018). (Refer to Appendix 1)

Issues faced by organizations in Singapore

The country that has been chosen for the expansion of Waitrose is Singapore. The major issues that have been faced by the organizations in Singapore is based on the racial problems and riots that have been taking place in the country from the past few years. The huge intake of foreign nationals for the purpose of fulfilling the shortage in manpower is also an issue in the operations of the organizations in Singapore (Drakulevski and Nakov 2016). The lack of the assimilation of the foreign nationals and their culture with that of the local people of Singapore have caused issues in the social structure and lack of harmony has also caused social imbalance in the country (Dagnino, King and Tienari 2017). The costs related to housing and the rise in rents can be a major issue for the operations of the company in the country. The intervention of the government in the various organizational policies can cause problems for the operations of Waitrose supermarkets in the country (Frynas and Mellahi 2015).

Singapore has shown high rates if growth in the past few years and has been able to become a high-income based economy of the world. The growth rate of the country has been determined by various economic factors. These factors include, the expenditure related to private consumption, investments and external and local demand (Refer to Appendix 2). The PESTLE framework can be used for the purpose of analysing the macro-environmental factors which are related to the operations of an organization in the country (Dogan 2015).

Political – Singapore has shown huge economic growth in the last few years. The economy of the country has become high-income in nature. The growth of the country has been driven by different factors. The leading sector of the country include, pharmaceutical industry and petroleum industry. The political risk of the country has been quite low and Singapore enjoys the lowest rates of political risk in the entire continent (Gumerov et al. 2015). Singapore is a democratic country and the elected representatives mainly lead the nation. The stability of the environment has further led to better living standards and peace in the country. The multiple number of law suits have thereby led to the restriction of freedom of speech in the country (Drakulevski and Nakov 2016).

Economic – The economy of the country is vibrant and the free market in nature. The economy of the country has developed at a fast pace. The corruption free environment of the country has supported the business sector of Singapore. The financial and the legal business framework helps in the process of development of the economy (Harrigan 2015). The government of the country has also invested in the diversification of the economy. The main reason behind the success of the economy has been the strategic geographical location of the country. The major constraint related to the economic performance of the country are, labour shortage, decline in the productivity and the rise in the labour costs (Frynas and Mellahi 2015).

PESTLE Analysis of Singapore

Social – The traditional family values are followed by the citizens in Singapore. The young generation of the country thereby follows the western based culture and the values. The residents of the country work hard for the purpose of creating the materialism based desire (Hill, Jones and Schilling 2014). The urge related to the improvement of the work culture has increased the productivity of the nation. The business sector can also expect high purchasing power from the customers. The literacy rates in the country is high and this helps in attracting the foreign investment and international trade (Gumerov et al. 2015).

Technological – The change in the lifestyle of the citizens of the citizens and the quality of life has led to the advancement of technology. Internet has played an important role in the advancement of Singapore. The communication and the connectivity of the country has been eased with the help of advanced technologies (Hubbard, Rice and Galvin 2014). The time and the cost of conducting business related operations has been lowered. The technologies have boosted the social networking related activities of the citizens of the country. The IT infrastructure of the country is quite efficient and effective in nature. The technologies have been implemented in the government operations of the country (Harrigan 2015).  

Legal – The legal framework of the country has been developed in a manner which can support the growth of the country in the different sectors. The regulatory and the legal compliances were developed for the purpose of helping the economic growth and the industrial development as well (Kotler, Berger and Bickhoff 2016). The laws related to cross border economic transactions and the activities of the foreign organizations have also helped in the growth of the economy of Singapore (Hill, Jones and Schilling 2014).

Environmental – The government has been taking major steps that are related to the development of the environment of Singapore. The pollution that is caused from the transportation facilities have been a major issue in the urban areas of Singapore (Lacerda, Ensslin and Ensslin 2014). The levels of carbon dioxide emissions in Singapore are also quite high. The shortage of water is another major issue that has been faced by the citizens of the country (Hubbard, Rice and Galvin 2014).

The external environment analysis of Singapore has depicted that the country is suitable for the successful expansion of Waitrose. The open market economy will be able to provide high growth opportunities for the company. Waitrose will be able to increase its profitability and revenues (Meyer, Neck and Meeks 2017). The social issues and the labour related issues can however cause problems in the setting up of the business operations of Waitrose in the market. The products and the services that are offered by Waitrose will be accepted by the customers of the country. The developed economy of Singapore can prove to be a positive factor for the operations of Waitrose which is an upmarket type of organization (Kotler, Berger and Bickhoff 2016).

External Environment Analysis

Strengths – The company has obtained the royal warrant for the supply of groceries to Prince Charles and Queen Elizabeth. This has the organization to gain a huge reputation in the market based on the products that are offered to the customers. Waitrose Supermarkets has a considerable share of the UK retail market with more than 300 stores in the market (Michael, Storey and Thomas 2017). The advertising related efforts are also popular in the country among the various existing and potential customers of the company. The recent marketing related efforts of the company have been based on the attempt to portray that Waitrose is ethical in its operations and is concerned about the customers (Lacerda, Ensslin and Ensslin 2014). The organization has been able to build a reputation in the industry with the help of the sponsoring related activities that have been done. The loyalty card that has been introduced by Waitrose has been successful in creating a group of loyal customers for the company. The company employs more than 100,000 employees and is a recipient of many awards and recognitions (Morschett, Schramm-Klein and Zentes 2015).

Weaknesses – The intense levels of competition that has been faced by the company is proving to be a major weakness which has further led to price wars for the company. The company has also received some amount of negative publicity due to an article that was published in the magazine named Waitrose Kitchen (Meyer, Neck and Meeks 2017).

Opportunities –The company has found huge success in the white based packaging. The campaign organised by Waitrose named “community matters” has been able to generate good word of mouth for the company in the market. Waitrose is expected to gain more shares in the market in the coming years (Popkova et al. 2015). The rich image that has been held by the company in the market is favourable for its expansion related plans in the other parts of the world and in the favourable markets. The improvement of the online shopping based market can act as a major growth related opportunity for Waitrose in the market (Michael, Storey and Thomas 2017). The launch of the new product line of the company named “Essential Waitrose” has also provided high levels of growth opportunities to Waitrose in the retail industry. The online shopping and delivery options that are being provided by Waitrose has been a major part of the successful operations of the company which can be helpful in its future growth (Rees and Smith 2017).

Strengths and Weaknesses of Waitrose

Threats – The organization has been lagging behind the competition that is faced in the market on the local and the global fronts. Waitrose has failed to receive recognition in many schemes that have been organised in the past. The poor economic condition of the home country of Waitrose has caused issues for the increase in the revenues of the company (Shepherd, Mcmullen and Ocasio 2017). The growth of the competitors of the organization in the market has caused lack of revenues for the company. The confidence of the customers on the brands that are offered by the company has decreased which has further led to loss of profitability in the market (Morschett, Schramm-Klein and Zentes 2015). The retail industry has seen many new entries and Waitrose has to face the competition that is provided by these new organizations along with the competition that is already present in the market (Shujahat et al. 2017).

SMART objectives that have been set by Waitrose company for entering the market of Singapore

Objective 1

Objective 2

Segmentation, Targeting and positioning analysis of Waitrose 

Segmentation – The process of segmentation is considered to be a basic process that is conducted by the organizations. Waitrose has also used this process for the purpose of deciding the market area where it wishes the offer the products (Theriou 2015). The age of the customers who are targeted by the products of Waitrose mainly belongs to the group of 18 to 40 years. The citizens of Singapore who belong to the age group between 40 to 55 years will also fall in the segment which will be targeted by the company (Popkova et al. 2015). The demographics of the customers will also play an important role in the ways by which they behave towards the services and the products. The location of the customers in the country will be a part of the segmentation process. The store of the organization thereby needs to be located in the premium locations so that the customers are easily able to reach the areas (Trigeorgis and Reuer 2017). The gender of the consumers is also considered in the segmentation process of Waitrose. The female customers of the country will be offered different products as compared to the male customers. The disposable income levels of the consumers of Singapore are high as the economy of the country is considered to be highly developed in nature (Rees and Smith 2017).

Targeting – Waitrose uses the process of targeting for the offering the products or the services to the desired group of people. The target market of the company in Singapore is selected based on the income levels and the demographics (Rees and Smith 2017). The organization has aimed towards increasing its share in the market by serving the market segments in an effective manner. The disposable income of the potential customers of Singapore are taken into consideration by Waitrose so that the company is able to use the segment to increase its growth in the retail market (Wheelen et al. 2017). The customers who prefer goods of the luxury levels are not considered as the target by Waitrose as the company does not want to serve that segment of the market. The disposable income of the consumers is considered by the company so that it is able to target the perfect group with its wide range of products (Shepherd, Mcmullen and Ocasio 2017). The average income group of customers in Singapore will be targeted by Waitrose so that it is able to provide the best quality products at the lowest prices.

Positioning – The positioning strategy of Waitrose is planned in an effective manner so that customers can reach the stores and motivated to purchase the products. The organization will be positioned in the retail sector of Singapore and will provide the best products at the lowest prices to all the consumers (Theriou 2015). The management of the organization has been planning for the launch of its internal brands and this strategy will be implemented in the expansion operations that have been planned by Waitrose in Singapore. The company thereby aims at place the stores in such a manner which is considered to be convenient by the customers of Singapore (Shujahat et al. 2017).

The marketing mix of Waitrose will be designed in such a manner which will be helpful for the successful operations of the company in Singapore. The four factors that are considered in the marketing mix of Waitrose are the price, place, promotion and place.

Price – Waitrose aims at developing a uniform price list in all the operations of the company in the world. The company however believes that a considerable amount price flexing can help gaining more revenues and market share. The variation of the prices between the various stores is based on the response to size of its store, the position or location of the store and the regional level incomes (Shepherd, Mcmullen and Ocasio 2017). The stores that are located in the premium locations can have higher prices as compared to those which are located in the other areas. The high costs that are related to the production and the operations in these stores are related to the higher price levels. The transport related costs in Singapore can also affect the prices of the various products in that area (Tamayo-Torres et al. 2016). The remotely located stores can also face high prices due to the high costs of transportation. Waitrose however aims at deciding the price levels in various areas of Singapore based on a pre-decided price level (Shujahat et al. 2017).  

Product – The product mix of Waitrose is based on the preferences of the consumers in various areas. The product line of the organization is therefore based on the consumers of the areas where the products are to be sold. The potential consumers of Singapore will therefore play an important role in the decision related product line that is to be taken by the organization (Trigeorgis and Reuer 2017) The product mix will also be based on the size of the stores of Waitrose that are developed in the various areas. The company will decide the products which it wishes to offer to the customers of certain areas (Tantalo and Priem 2016). The product mix of the company which is decided at the start of the operations in the country can be changed with the changes that can take place in the preferences of the customers.

Promotion – The promotional activities of Waitrose will be conducted based on the lines of the products which it wishes to sell to the targeted customers. The organization will formulate the promotional offers based on the needs and the demands of the local consumers of that area (Tantalo and Priem 2016). The new stores can have different types of promotional offers as compared to the stores that are already operating in the area. The stores of Waitrose that will be opened in Singapore will have promotional offers that will be able to attract the consumers towards the new products (Theriou 2015).

Place – The location of the stores in various areas of Singapore will be decided based on the areas where the shopping related opportunities can be provided to the customers and the company can gain revenues. The average store size of Waitrose is around 1500 square meter. The format of the stores will remain same in its operations in Singapore (Trigeorgis and Reuer 2017).

The marketing based objectives and the marketing mix of Waitrose will be implemented in its expansion plans in Singapore. The company aims at increasing its revenues in Singapore within two years of its operations in the country.

Waitrose can be recommended to enter in the retail market of Singapore with the help of its own stores in the prime locations of the country. This is important for the company to maintain its reputation in the retail industry.

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