PESTEL Analysis of Poland
Woolworths is specifically known for its supermarkets producing varieties of products in different countries under the ownership of Woolworths Group. The company is going to launch its Corned Beef product in the market of Poland. The company has also owned a supermarkets chain in Australia and thinking of launching a new product in the market of Poland. (Methner, Hamann and Nilsson, 2015). The meat industry in Poland is rising day by day due to the favourable appetite of the Irish people towards Corned Beef. The task has been provided to Ashanti Marketing Solution to give a detailed report of the market situation in Poland and what strategies the company should implement so that Poland can be a suitable market for the Corned Beef industry. As a marketing consultant, the following report will analyse the external environment of the country and the competitive analysis. The report will also analyse the market entry options suitable for Woolworths for entering the new market and will produce a brief discussion of the target audience and segmenting required for the company to expand its business in Poland (Knox, 2015).
Political Factors
In terms of political factors, the main units are legislation, government agencies, and incentives. The market of Poland is favourable to the Corned Beef industry. The government of Poland has allowed giving incentives to the companies in order to open market in the country. The Polish Government has decided to give incentives to the companies that invest in the market more than 10 million euros. (Strzelczyk and Ch??d, 2017). The incentives the government offers are employment grants, grants for infrastructure development, and training grants to the companies. There can be other that might affect the company’s performance such as elections, changes in the market price of the Corned Beef industry and import and export regulations which can be changed by the government. The Poland government wants to bring industrialization to the country and to increase the market capitalization of the country through an open market process.
Economic Factors
Economic factors are one of the main factors for companies to enter into a new market. considering the market size of the country Poland’s economic condition is boosting day by day making it favourable for the companies to enter this market. Poland is also having a mixed economy system combining both private freedom and government regulation. The country is developing at a rapid rate and the country has a diversified domestic economy. Many companies are investing in this country due to high-income rates and lower unemployment. Poland is the sixth-largest country in the European Union by nominal GDP. (Mi?ek, 2018).
Social Factors
Social factors deal with the region’s cultural taste and preferences towards companies and the adaptability of new companies by customers in the area. Poland is having a rich history with people who love to follow art and literature. The country has a population of 38 million. Poland is also considered one of the hardest-working nations in the world according to the report of OECD because salaries are relatively low and polish to earn more consider extra work. The country has some issues like labour shortage and the company also acts as a barrier against migrants from other countries due to cultural issues has also brought a shortage of working capacity in the country and also the polish people before migration has low skills and for lower personal expense because of EU accession in other countries, they prefer migrating. (Mi?ek, 2018).
Political Factors
Technological Factors
Technology and innovation are very much important for a country in order to bring globalization and industrialization. The market of Poland is broadcasting in nature. The country also has the potential to ta become one of the leading exporters in the world. Local brands and sellers are producing various meat including pork and Corned Beef in order to meet the market demand. It industries and the e-commerce industry are developing in the country and in terms of the internet, the country 87% of the household has access to internet connectivity. (Weresa, 2015). The country has a vast frequency of new products appearing in the market and also has brought a change in pace in the industrial technology. (Szulecki, 2020).
Environmental Factors
Environmental factors also determine the favourable market conditions of the country while opening a business. The country has attracted many tourists from different parts of the world due to its rich history and local cuisine. The main attractions of the country are its natural diversity of mountains, beaches, and forests. (Lulewicz-Sas and Godlewska, 2015). The country has faced pollution of air, water, and land in the late 90s but is constantly trying to improve and provide suitable conditions to visitors and bring sustainability. The country has also taken initiative against carbon emission and has also provided companies with standards to follow in terms of carbon emission and global sustainability. (Weresa, 2015).
Legal Factors
Legal factors include the government rules and regulations in terms of selling products in the country. Poland has safety measures that are needed to be followed by the company in terms of selling food items like groceries and meat. The country has also been seen to provide incentives grants to companies but the companies have to employ Polish people. The Poland work requirements state that any foreigners who want to work in the country should bring a work permit. The country. The country can ban the services and products of the companies if the companies don’t follow standards and any susception towards bad items. (Gwo?dziewicz and Prokopowicz, 2015).
The main opportunity of Woolworths in entering the Poland market is the industry sector of the country is constantly changing and economy of the Poland is high with diverse cultural tastes. Woolworths can expand its business in Poland as the Corned Beef industry is constantly rising in the country. (Yusop, 2018). The government has put incentives grants to the companies providing an opportunity for the company to start its business. The country is also exporting Corned Beef to other countries which can be provided by Woolworths and the company provide its customers with new varieties of Corned Beef with new taste to capture the polish market.
The main threats in the market in producing new businesses are the existing brands, retailers, and family businesses. Most of the consumers of Corned Beef buy the product from these small chains of business. A brand like a supermarket giant Tesco store is also present in the country which reliable source for the consumers in getting fresh products. The company has also provided online service to its customers making it more competitive for Woolworths. (Matovic, 2020).
Economic Factors
The most appropriate proper solution for Woolworths is to cater to customers with varieties of Corned Beef with the best quality proper packaging and meeting all safety measures and standards. The company should establish a chain of retail shops to market its products to the customers. the company should also perform online delivery of the Corned Beef to the customers with a faster delivery system. The company should bring innovations in its Corned Beef segment including nutritional value and diversification in shapes sizes of Corned Beef including Roast, Brisket, sliced and diced to meet the requirements of the customers. The company should look for a new distribution channel and online marketing of its platform to attract consumers. (Çitilci and Akbal?k, 2020).
Merger and Acquisitions
The merger is a market entry strategy that requires two companies to consolidate into a new entity trying to capture the market with the new or existing product. The merger of two companies defines itself with a new ownership and management structure. The merger requires no cash management but includes the company’s power. The merger is being performed by the company in order to bring stability in the performance of the company while bringing productivity due to the joining of two forces. Mergers are mainly done for reducing the operational cost of both the companies, expanding into a new market, and for boosting revenue and profits for the companies. Mergers are usually voluntary and are performed mainly with the companies of same size and scope. Acquisitions, on the other hand, are the takeaway of the company by the larger company making it an asset for the larger company. (Angwin, 2015). Acquisitions take place when one company takes all possess of another company through cash management and buy the smaller companies. Woolworths can acquire a small retail chain in Poland that they did in Australia for better market penetration. Companies may acquire another company for reducing cost management, improving the market share and expanding into new product lines in the market. (King, Bauer and Schriber, 2018).
Strategic Alliance
A strategic alliance is a type of market entry where two firms arrange to undertake a mutually beneficial project where each one has their independence. A strategic alliance is mainly done due to expansion in the new market, improving the product line of the company, or developing an edge over the competitors. The arrangement of strategic alliances allows both companies to work for a similar goal that will benefit both parties. (Brouthers, Nakos and Dimitratos, 2015). Strategic alliance agreements can be short-term and long-term depending upon the project valuation. The risk factors of strategic alliance can be the difference in business and it can also happen that one company can become dependent on another company which acts as a burden bringing negativity in the performance of the companies. In the following market entry option both the firms decide to act mutually and comply with their resources in designing, manufacturing, and distributing goods and services. Woolworths can prefer a strategic alliance with Poland supplier giants of the beef market like JKA meat supplies to cater to customers with more beef categories. (Bamel et al., 2021).
Social Factors
Franchising
Franchising is an arrangement where the main party known as the franchiser grants licensing and other rights and authorities to the other party called the franchisee. This is also a well-known marketing strategy for business expansion. A contractual agreement is being performed between the two parties that are Franchisor and Franchisee. The Franchisor authorizes franchisees to sell their products and services by using the brand name and trademark of the Franchisor. Here in this market entry option the franchisee act like the dealer. In return for the agreement, the franchisee has to pay a significant amount to the franchiser which acts as a commission and has also to pay some share of revenue the franchisee has earned. This method is practiced by big companies like FMCG. (Bretas and Alon, 2021). The main advantage of a franchise is that while expansion no incurring additional cost is required and expenses of selling are given by the franchise secondly it also helps in building the brand name and goodwill of the franchiser in the market. the risk initiated in this type of market entry is, for franchisors not direct control over the sale of its products, and for the franchisee, the party has no control over its business and has to adhere to the rules of the franchisor. This sometimes causes misconception and misunderstanding in a business environment. (Rosado-Serrano, Paul and Dikova, 2018).
The best method for Woolworths for market expansion in Poland is through Merger. Woolworths is a supermarket chain that provides many products but in Poland, it has to sell Corned Beef-related products because of the rising demand. There are a lot of players providing Corned Beef and pork to the customers in Poland. These local brands have stability in the market have no expansion in the business rather than Poland. Therefore, merging with one of the local brands which are producing Corned Beef in the Poland market will provide an idea to Woolworths about the taste and preference of the people as well as requirements of the people. Woolworths can then reduce its operational costs through merging as it is producing Australian meat. (King, Bauer and Schriber, 2018). The support from the local brand will give Woolworth an advantage in the market in terms of releasing its new product in the market of Poland and existing customers of local brands will take the product from Woolworths as a marketing strategy. The scope of the company has to be verified by the company before merging and the revenues and position the other company has in the polish market. Merging will help the company in providing new products to customers and will also increase the stability of the company in the new market boosting revenues and sales for the company. (Angwin, 2015).
Segmentation is the first which is required by the company to know about the segments of the customers. The main requirement for segmentation is to know about the groups of the customers considering the requirements of the customers for the following products. The most common way to segment the customers into the different groups is through the geographically, demographically, psychographic and behavioural segments. (Venter, Wright and Dibb, 2015). The most important part of the segmentation is the company has to identify its customer’s behaviour. In geographic segmentation, the company should look for new places like urban and semi-urban channels after that the customers are segmented into age, income, gender-based on the products the company is offering. Segmentation helps companies to define the purchase behaviour of the target market. the companies look for consumers in the best interest of the customers in terms of the product the brand is offering. Customization in customer experiences helps companies in increasing brand loyalty. Market segmentation can be defined by breaking down of target market into smaller more manageable groups. (Dolnicar, Grün and Leisch, 2018).
Technological Factors
Targeting on the other hand is the next process after segmentation where the companies have to target the market regarding the segmented groups. Targeting is very much important as a perfect targeting method can improve the business operations of the company. targeting also helps in providing impact to advertising, customer experience, and branding. (Andaleeb, 2016). A successful target market implementation will help in understanding the purchasing behaviour of the product by the customers. it also helps in providing the target audience the correct information helping in generating leads for the company. Targeting the customers helps in differentiating the company from other competitors and also helps formulizing branding in the new market. Targeting is required by the brand in order to bring innovation in products and also bring stability in the performance of the company in the market. Targeting also helps companies in making more marketing strategies and also provides proper direction to the brand. Targeting helps both customers and the company as it helps to bring efficiency in the operations for the brand and also increases customer satisfaction. (Camilleri, 2018).
Woolworths has to look for various segments of customers and marketing initiatives and promotions to provide transparent information to its customers. The brand should use social media marketing for targeting its customers and providing information to its customers. the brand should also launch campaigns relating to the quality the brand is offering and diversification in meat segments the brand is working for the customers. as the company is a supermarket chain of various products it can contact retailers and shops for meat distribution in the market. the company can also open its stores in the country for better interactions with customers and also increase brand awareness. Woolworths should use online delivery services for the target market and should cater to every section of society including ones with health benefits specially to have a better reach in the market. Poland is known for sausages and eating meat stew with Corned Beef. Woolworths should target this customer segment for providing Corned Beef products with a new taste. (Andaleeb, 2016). Woolworths should provide customers with high-quality nutritious meat at affordable and premium pricing depending upon varieties to cater to the mass market of meat lovers in Poland. Woolworths should target the audience by providing loyalty programs to its users and also giving offers more than its competitors for better market penetration. The target customers of the company are meat lovers of every income, age, and gender and also the government if the company thinks of exporting its service. The target market should be segmented into healthy Corned Beef products and the people liking new tastes every time. This will help the brand in making a better positioning strategy in the Poland market. (Szafra?ska, Stasiak and So?owiej, 2021)
Porter’s generic strategy is used to classify the behaviour of the company and also helps in gaining a competitive advantage in the market. The strategy is useful for companies to launch a new product through new ideas related to pricing and differentiation in order to capture the target market. there are mainly different strategies:
- Cost Leadership Strategy
- Differentiation Strategy
- Cost Focus Strategy
- Differentiation Focus Strategy
Environmental Factors
The first strategy known as the Cost Leadership strategy defines a situation where the business mainly focuses on reducing cost in operations in order to deliver the products to customers. it is a long-term strategy that helps companies in becoming more competitive in the market in terms of delivering products to clients. The cost leadership strategy helps the companies in gaining profit margin through the current cost and also helps in resisting price increases if competitors are forced to raise. For example, Mcdonald’s reduce operation costs to gain more competitive advantage. (Greckhamer and Gur, 2021).
The second strategy is the Differentiation strategy where the companies tend to differentiate their products from that of other brands to get a competitive advantage. This strategy has got a wide spectrum from full product diversity to bringing new features to the core product. The differentiation strategy helps companies to enter new markets with diversified revenue. The company’s existing revenue also increases when the unique product price increases. The differentiation strategy also helps companies in building their customer base towards a new product. Woolworths differentiated its products in Australia by launching its meat and household brand Homebrand. (Islami, Mustafa and Topuzovska Latkovikj, 2020).
The third strategy is the cost focus strategy which is mainly an evolution of Cost leadership strategy where the strategy includes two segments one is focus and the other one is cost. The focus resembles the companies targeting a particular segment or niche market and the cost resembles here the price charged for the product in that segment is very aggressive. This strategy helps in bringing thought leaders into the industry and also generates customers loyalty by becoming one of the single trusted providers in the whole industry. For example, Walmart has used this strategy to capture e-commerce business in many countries. (Omsa, Abdullah and Jamali, 2017).
The fourth and last strategy is the differentiation Focus strategy. This is also the evolution of Differentiation strategy where there are two aspects, the first one is the differentiation and the second is Focus. The differentiation focus strategy is where the business has brought differentiation in its products and has focused on the niche segment. This type of strategy helps in producing cross-selling between customers and companies. Sometimes companies under this strategy sell auxiliary products as additional innovative services. Apple considers this strategy to gain a competitive advantage by launching unique innovation and differentiation devices each year. (Bel, 2018).
From the above strategies, the best-suited strategy for Woolworths in Poland will be the differentiation strategy as the company is launching Australian Corned Beef taste into the European market therefore the company should apply this strategy. Poland Corned Beef market is increasing at a higher rate and more than 17 local brands are catering different Corned Beef qualities and taste to customers. The Differentiation strategy of Porter will the brand in bringing new tastes in the market with unique quality and at value pricing. The launching of beef products under Woolworths Homebrand with varieties in Poland will provide a competitive advantage to the brand. The new product launch for Woolworths will be challenging as the company has to target its audience properly in terms of quality and other benefits the Corned Beef is providing to its customers. it should meet all requirements of quality standards of processing for providing customers with a unique taste of different flavour. (Bel, 2018). The differentiation strategy will help the brand to diversify its structure and service portfolio. The customer feedback should be reviewed by the company in order to bring any changes. The strategy will also help the company in upskilling its revenue streams within the country. Differentiation strategy also helps to maintain the product price in the country because more marketing channels get increased and produces news about features or products. The strategy will help Woolworths in delighting its customers with a unique taste that will eventually cater to loyal customers for the company and will increase the brand loyalty of the company (Kaya, 2015).
Legal Factors
Conclusion
The above report has discussed Woolworth’s new product launch corned beef into the market of Poland and the following strategies required by the brand to enter into the new market. Poland’s consumption of beef is increasing day by day as people have different varieties of European meat within the country. The government has also supported new companies entering the country. Woolworths will have an edge in the market due to unique and nutritious corned beef with new tastes and flavours. The targeting and segmenting of the customers should be people irrespective of gender and age who love to have meat with taste and are health conscious. Woolworth should merge with the local brand in order to get a better view of customer requirements and bring stability to the company’s new market entry. The differentiation strategy will help the brand in differentiating its product from the other brand supplying beef in the market. Proper execution of strategies and segmenting targets considering the needs of the customers will Woolworths to successfully capture its product market in Poland.
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