Waitrose Supermarket Organizational Hierarchy And Political, Economic, And Social Factors In Singapore

Waitrose Supermarket Organizational Structure

This paper will be discussing a company that was started in 1904 as a small grocery and later became a world known retail company in Britain. Its new plan is to open international opportunities in Singapore. The company name was a formation of two names Wallace Waite, and Arthur Rose after Taylor one of the three founders left the company in Canada (Vieira, Aguiar, and de Barcellos, 2010). The company is unique compared to others as it has over 75,000 employees who have partnered the company strength which keeps the company the competitive advantage (Lindsay, 2010). In this paper, we will be exploring the internal and external environments of the company that contributes to its success or failure, the objectives, and strategies that the company has towards expanding internationally more specific Singapore, as well as the how the company would implement international marketing mix using 4Ps.

John Lewis organization hierarchy

 

Fig.1.Represents organizational structure of Waitrose supermarket

The highest position in Waitrose Company is the Chairman of the board followed by the partners, board of trustees and chairman management committee. However Waitrose is a partnership organization owned by every employees of the organization who are over 70, 000. This makes every employee work without getting tired.

Waitrose is a British chain of supermarkets forming divisions of food retail. It is owned by John Lewis Partnership, the largest employee-owned British retailer. Waitrose headquarter is in England, Berkshire in a small town in Bracknell. It is the sixth largest grocery supermarkets in the UK with 352 branches, and the inclusion of 30 convenient “little Waitrose” shops (Chandra, Styles and Wilkinson, 2009). The chain has 5.1% market share and exports their products to over as well as having operational Middle East shops. Waitrose has been privileged with a royal warrant to supply spirits, wines and grocery to Queens’ Elizabeth palace and also Prince Charles as of 2011 in (Canada Vieira, Aguiar, and de Barcellos, 2010). David Taylor founded the Company, Wallace Waite and Arthur Rose in 1904 as a small grocery (Alsamawi et al. 2017). The name Waitrose was adopted in 1908, two years after Taylor left. Twenty-nine years later, the company had 10 operational shops with 160 employees working in them and was acquired by John Lewis Partnership (Tremewan, 2016). The company used the name Schofield and Martin after its purchase until the 1960s when it took it former name Waitrose. Over the years Waitrose reputation has been built on the supply of freshest and best quality food (Lehtinen, 2017).  Waitrose existence in Singapore was tried first in 2015 when John Lewis stepped in the country for wholesale export plans. Singapore has 4 main supermarkets chains, and recent emerges online supermarkets. These chains include Cold Storage, Sheng (Siong et al. 2009).

Political factors

Political factors in a country affect the operation of a company. Before Waitrose lands and opens it chains in Singapore, it will need to do a thorough general view of the political situation. Political factors to be considered include government policies (legal, economic or social), minimum wage, employee health insurance, overtime compensation rules, labor contracts, etc. Political risk is minimal in Singapore as the country is said to be the most democratic country in the continent by the Political and Economic Risk Consultancy (PERC). The Singapore’s political stability has increased peace and improved business opportunities in the nation (Storey, Basterretxea, and Salaman, 2014). Waitrose should consider decrease or increase in tax by Singaporean government as this could make or fail their success (Luan, 2010). The reason why there is a need to do thorough political scrutiny is that the government will always protect the right of its public, the government also consumes products and services, and even its actions will influence the economic environment (Tremewan, 2016).

Economic factors

The fluctuation of economy (growth and stagnation) time to time directly or indirectly affects retailers in the same way it does to the other industries. Singapore has a market free vibrant economy (Phillips and Nugent, 2014. Suicide and the Great Recession of 2007–2009, pp.22-31). Economic factors that affect business include changes in interest rates purchasing power, inflation rate and exchange rates. These factors determine how shoppers spend their money. The country has very few reports of corruption which translate to high support of business sectors. Waitrose would enjoy Singapore’s’ very educated and motivated employees (Spence and Bourlakis, 2009). Singapore has the highest per-capita income in ASEAN. Singapore financial and legal framework will be favorable to Waitrose. The pharmaceuticals, tourism and other sectors have flourished in the recent pasts due to governments’ investing in diversifying economy (Massa, and Testa, 2012). The likely constraint Waitrose is expected to deal with in Singapore is labor shortages, declining productivity, and rising labor cost. In the UK the retailer has faced the inflation rates with UK economy (Hay, 2009).

Political Factors in Singapore

Social factors

Social factors to be considered in Singapore will include tastes and trends, fashions, traditions, family values as well as demographic factors like population age. Age in particular has been predicted as the likely cause of negative effect to supermarkets in the UK as many people retire from their jobs reducing their purchasing power (Stockdale and MacLeod, 2013, 32, pp.80-92).  Singaporeans uphold their traditional family values just like other eastern countries Tremewan, 2016). The people of Singapore work hard to meet their daily needs meaning Waitrose would enjoy the consumers’ purchasing power (Armstrong et al. 2015). Reports have shown that most Singaporeans dislike blue collar jobs like construction which would offer Waitrose an opportunity to have a wide range of available employees (Armstrong et al. 2015). It is the culture of Singapore culture that every child has primary education, and every parent is required to ensure kids attend school (Welch et al., 2011). Therefore, literacy levels in the country are high with good command of Chinese and English languages which gives it an advantage in attracting foreign investment and international trade. In UK however it is said that the population is increasing at an alarming rates of with the figures of 2008 at 6138300. With the highest birth rates, reduced number of deaths and increased migration to UK has led to this growth (Blak, 2011.pp.251-255).

Technological factors

Technology is the newest opportunity for retailers across the world offering online shopping opportunity including to Waitrose’ competitors (Close & Kukar-Kinney, 2010). There is the high adoption of technology in Singapore with many people using the social network to connect with each other. The cost of connecting with customers is also low as resident easily connect to the rest of the world giving Waitrose an opportunity to do online marketing and sale of their products. Technology has raised social networking in Singapore and sharing of information is very effective (Massa, and Testa, 2012). Singapore domestic IT penetration is praise-worthy with over 70% of people using the internet. In UK many people prefer online shopping with highest percentage of food shoppers turning to online shopping compared to other countries. The multinational companies are setting their regional operational offices in Singapore with many having to set their headquarters there. The Singaporean government is also moving to an electronic government era (Pishvaee, Ramzi andTorabi, 2012). These opportunities will be useful for the Waitrose supermarket because there are a handful of people using internet which would simplify its goal of more significant market share.
Singapore Anti-Pollution Unit and Ministry of Environment takes environmental issues seriously and works together to ensure there are fresh air and other environmental factors (Kotler, 2011). The transportation sector is the primary pollutants of urban areas of Singapore. Reports state that Singapore was among the most polluted countries with the carbon dioxide emissions (Kotler, 2011). The environment in recent years has become a topic of discussion giving an opportunity for the big players who look for opportunities to be recognized as solution finders and environmental sustainers. Water Pollution in Singapore has led to shortages of water, and this would offer an oppor tunity for Waitrose to supply clean drinking water for her population (Luan, 2010). This is because there is a high dependency of Malaysian water suppliers to the country where a local brand NEWater which purifies sewerage water cannot supply enough water (Luan, 2010). This raises a need for immediate action which would give Waitrose an opportunity to do so (Xi, X. and Poh, 2013).
Singapore government has a belief that growth of electronic commerce will depend on transparency and transparent and favorable market regulations and legislation. Singapore government launched e-commerce program first in 1996 with the aim of developing e-commerce services (Alsamawi et al. 2017).  It established cross-border e-commerce policies and laws through building the right infrastructure since 1998 (Czinkota, Kaufmann and Basile, 2014). Some of these policies include Some of them are Content Regulation, Intellectual Property Rights, Electronic Transactions Act, Tax Issues, Amendments to the Evidence Act,  Import, and Export Procedures.

Waitrose SWOT analysis

Strengths: strength is what the company depends on to survive. There is a number of strength with Waitrose retail chain as follows:

Waitrose has an opportunity to use royal warrant it has to supply Queen Elizabeth and Prince Charles with groceries and wines and spirit,

The company has over 300 stores in the UK giving it a substantial market share in the country,

The company has also received many recognitions and awards which has built its reputation,

The company has close to 100, 000 employees working for them who are also shareholders,

The company has an established brand name through sponsoring of English Cricket Team,

MyWaitrose loyalty card success cannot be disrupted,

Increased international online sales,

Good advertising efforts which are popular in the country, and

Studies show that Waitrose has a more ethical consideration compared to its competitors.

Weaknesses: this is what the company should improve on.

The Company faces a lot of competition from its rival companies ASDA Group Limited, Tesco PLC, Morrisons, and J Sainsbury PLC, and if not well managed it may decrease its market share.

Economic Factors in Singapore

The publication of in the magazine Waitrose Kitchen backlashed on social media.

Opportunities:

Singapore has a hardworking populace who with purchasing power,

It has succeeded in white based packaging,

Waitrose has the potential of gaining higher market share in future,

Singaporeans are using the internet and social media which is a booster for Waitrose international trade (Pishvaee, Razmi and Torabi, 2012), and

To build a very rich image reputation and expansion in more favorable in other markets like Singapore.

An opportunity to take forward matters of community and campaign to generate publicity through word of mouth

The use of technology would expand its market share (Jiang, Yang, and Jun. 2013)

Singapore requires an immediate solution to the water shortage

Threats:

The company may lag behind regarding competition in both local and international global

Falling to make clear its stand on “free coffee” scheme

Poor environments conditions in Singapore

International marketing objectives and strategy

Online delivery order (website, johnlewis.com)

Objectives of international marketing

Obtaining a minimum of 15% of department stores in international markets (, i.e., Singapore)

Achieve annual growth rate of not less than 18% internationally Massa, and Testa, 2012)

Ensuring revenue from the international market will account for not less than 45% of total Lewis revenues by 2018

To help John Lewis become top three global department store by revenue levels as of 2020

To form a strategic partnership with at least more than one major local company where John Lewis steps

One of the most effective international strategies that have helped many companies today is online platforms where customers can place order wherever they are, and goods get delivered in their home country (Nijssen, and Herk, 2009). Waitrose has adopted its website johnlwis.com where customers can order products for delivery to countries such as Philippines, Malaysia and Hong Kong (O’Dwyer, Gilmore and Carson, 2009). This has also given customers a variety choice of 10 other currencies to make payments. Strategic alliances

This strategy is different from the traditional joint ventures where each individual partner was to contribute a fixed amount of resources and the venture develops on its own (Lehtinen, 2017). In this strategy, firms collaborate beyond limitation to a joint venture after they poll their resources together. They rely on each other’s’ skill to benefit from their experiences (Czinkota, Kaufmann and Basile, 2014). This strategy is the key driver of Waitrose when it will be penetrating the Singapore market. These alliances involveproduction technology or technology transfers and distribution access where each partner contributes a different portion of the venture.

Social Factors in Singapore

Mergers and acquisition strategy

This strategy works well as it helps Waitrose quickly penetrate the international market than starting from scratches. This strategy is used to complement the joint venture in Australia (Czinkota, Kaufmann and Basile, 2014). The company decides to use this strategy for it has a potential of taking a competitor out of the market (Bowman, 2014). Waitrose is aware that this strategy is quite expensive when entering the market since it requires confronting top management which acquires significant funding, qualified staff from Waitrose (Nijssen, and Herk, 2009).

Functional strategies

This strategy will look at the connection between expenditure and lifestyle characteristics of customers and their tendency to purchase a particular product over the other. By so doing the company will use the understanding to achieve competitive advantage (Lindsay, 2010). The company also intends to improve direct marketing response through targeting the right market segment using the right media at the right time during their promotion (Massa, and Testa, 2012). The other functional strategy is a continual connection with customer’s emotions as well as solving their problems etc. as defined in their retail pillars.

Marketing mix strategy

1. a)    Product positioning

Waitrose will use this strategy to earn their customers loyalty and trustworthiness. This will be achieved by ensuring that their outlet’s services are convenient and satisfying to their customers (Christodoulides and De Chernatony, 2010). They will also use technologies in stores and outlets to manage their demands properly as well as serving customers well as they get what they want(Bowman, 2014). Customers are also to be issued with partnership cards to earn them points and vouchers any time they shop.

1. b)    Pricing

Pricing of Waitrose is done through comparison of the competitors’ price and also on the basis of customers’ value reflection. Since the company will be newer in the international market, its price tends to be relatively lower (Lindsay, 2010). The use of premium brands like royal label which it was licensed to manufacture, distribute and sell will also help the company in capturing tourist and other customers in tourist destinations.

1. c)    Promotion

Waitrose will advertise, offering free samples, to promote special packaging and brands. In advertising, the company has three objectives of passing information of goods available, create awareness and persuade customers to buy (Christodoulides and De Chernatony, 2010). Waitrose will use television advertising and social media to reach the aged and young people respectively more so in Canada (Vieira, Aguiar, and de Barcellos, 2010). Free samples are intended to inducing customers to try the Company’s new products.

1. d)    Distribution

Strengths and Weaknesses of Waitrose Supermarket

Reaching customers will be achieved through the use of different stores, channels and websites catalog. The other important consideration in distribution is to locate a consumer zone where the customers will find convenient to access and shop such as city centers, where the majority are working class (Pishvaee, Razmi and Torabi, 2012).

Operational Strategies

1. a)    Staff recruitment and training

All the new staff including newly recruited or those acquired through other organizations acquisition will be taught about the products, systems, and services of Waitrose in order to offer quality service to its customers (Pishvaee, Razmi, and Torabi, 2012).

1. b)    Online and other system updates

The installation of necessary systems will be done as well as partnership card or online shopping system to enable e-retailing.

Other operational strategies would include radio sports and TV advertisement, Business stores stock up and launch, Point of purchase, Public relations, etc.

International marketing mix implementation

John Lewis applies four marketing mix which includes 4p’s-Price, Product, Place, and Promotion. These marketing mixes are discussed below in details.

Price

For decades now John Lewis Company believes that fair prices have always been the central weapon of their business. John Lewis has adopted competitive pricing strategy in all their products and while keeping the quality and products’ value in mind (Lehtinen, 2017). The company compares its pricing with their competitors frequently (Bowman, 2014). Although their prices would remain a little high compared to other players, the company has a set price-monitoring that helps to proactively keep a check on the prices of their competitors’ brands every day including online checks and during sales (O’Dwyer, Gilmore and Carson, 2009). This strategy allows customers to request for price matching if they find cheaper products in other outlets.

Place

Waitrose Company commonly uses a multi-channel strategy by using different channels of distribution to cater to its customers (O’Dwyer, Gilmore and Carson, 2009). They exist on Facebook, Twitter, and YouTube in addition to their spread retail outlets in Britain. The company has also used apps in smartphones to increase customer convenience. In England alone, Lewis operates 50 stores.

Products

John Lewis products are among the leading in the UK retail markets. Their services range from personal styling and nursery advice to technical supports and appliance installation (Christodoulides and De Chernatony, 2010). Several services exist in their retail stores which are parts of their marketing mixes (Chatterji, 2016). Their products are designed to fit for Electricals and Technology, Gifts and Celebrations, and Baby and Child, Home and Design, Fashion and Beauty. In the provision of home and designs, they have their own brand’s comforters, pillows, etc. made from Lancashire mill at Herbert Parkinson (Zhang, and Babovic, 2012).

Objectives of International Marketing

Promotion

There is the adoption of innovative promotion strategies by John Lewis for their products as well as creatively using festive occasions to develop different advertisements as the year ends. In one decade ago consumers are being attracted to creative ads that the Company makes which they long for during Christmas seasons (Christodoulides and De Chernatony, 2010). Examples of their most public campaigns include Buster The Boxer, The Journey, the Bear and The Hare, Monty the Penguin, and The Long Wait. They have won several polls in UK personal ads, generated millions of views on YouTube and “The Long Wait” won its place in primary school teaching curriculum.

Companies that are owned by employees are more ethical and higher performing than those with other models of ownership

Democratic management styles can go hand in hand with an open culture, with encouragement for constructive dissent and challenge and with support for information flow (Chandra, Styles and Wilkinson, 2009).

Waitrose should continue with its managerial structure of employee ownership to continue increasing loyalty and competitive advantage. The employee-owned organization represents a more stable kind of an organization (Welch et al., 2011).

Waitrose Company should continue with its wines and spirits supply to Prince Charles and Queen Elizabeth palace (Czinkota, Kaufmann and Basile, 2014).

The company should continue with its plan to increase their international market reach to increase their profits margins and their market share (Chandra, Styles and Wilkinson, 2009).

The Waitrose supermarket should continue with its fair price strategy to make the products demand continue increasing as well as maintaining the quality of customer services (Lehtinen, 2017).

Conclusion

John Lewis company ownership model is the best for a company that faces stiff competition in its faith to bring better solutions for the world people. An employee-owned company has a great potential to maintain competition for a long time because every employee works hard as the real owners of the company. It is important that companies that want to explore international market put into consideration political, economic, environmental and legal factors. Politics of a country can have a negative or positive impact on business and therefore, raising a need to be cautious about the political situations in different regions. The economy of a country affects business growth as well. Things like per capita income, tax, and change in government policies, etc. are factors that would have great effects on the business

References

International Strategies for Waitrose in Singapore

Alsamawi, A., McBain, D., Murray, J., Lenzen, M. and Wiebe, K.S., 2017.Introduction to the Social Footprints of Global Trade.In The Social Footprints of Global Trade (pp. 13-18).Springer, Singapore.

Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015.Marketing: an introduction. Pearson Education.

Blak, B., Thompson, M., Dattani, H. and Bourke, A., 2011. Generalisability of The Health Improvement Network (THIN) database: demographics, chronic disease prevalence and mortality rates. Journal of Innovation in Health Informatics, 19(4), pp.251-255.

Bowman, A. ed., 2014.The end of the experiment?: From competition to the foundational economy. Oxford University Press.

Chandra, Y., Styles, C. and Wilkinson, I., 2009. The recognition of first time international entrepreneurial opportunities: Evidence from firms in knowledge-based industries. International Marketing Review, 26(1), pp.30-61.

Chatterji, M. ed., 2016.Technology transfer in the developing countries.Springer.

Christodoulides, G. and De Chernatony, L., 2010. Consumer-based brand equity conceptualization and measurement: A literature review. International journal of research in marketing, 52(1), pp.43-66.

Close, A.G. and Kukar-Kinney, M., 2010. Beyond buying: Motivations behind consumers’ online shopping cart use. Journal of Business Research, 63(9-10), pp.986-992.

Czinkota, M., Kaufmann, H.R. and Basile, G., 2014.The relationship between legitimacy, reputation, sustainability and branding for companies and their supply chains.Industrial Marketing Management, 43(1), pp.91-101.

Fetscherin, M., 2010. The determinants and measurement of a country brand: the country brand strength index. International Marketing Review, 27(4), pp.466-479.

Hay, C., 2009. Good inflation, bad inflation: The housing boom, economic growth and the disaggregation of inflationary preferences in the UK and Ireland. The British Journal of Politics & International Relations, 11(3), pp.461-478

Jiang, L., Yang, Z. and Jun, M., 2013. Measuring consumer perceptions of online shopping convenience. Journal of Service Management, 24(2), pp.191-214.

Kotler, P., 2011. Reinventing marketing to manage the environmental imperative.Journal of Marketing, 75(4), pp.132-135.

Lehtinen, U., 2017. Sustainable Supply Chain Management in Agri?food Chains: A Competitive Factor for Food Exporters. Sustainability Challenges in the Agrofood Sector, p.150.

Lindsay, A., 2010. The Economics of EC Competition Law.S Bishop and M Walker.

Luan, I.O.B., 2010. Singapore water management policies and practices.International Journal of Water Resources Development, 26(1), pp.65-80.

Massa, S. and Testa, S., 2012. The role of ideology in brand strategy: the case of a food retail company in Italy. International Journal of Retail & Distribution Management, 40(2), pp.109-127.

Nijssen, E.J. and Herk, H.V., 2009. Conjoining international marketing and relationship marketing: exploring consumers’ cross-border service relationships.Journal of International Marketing, 17(1), pp.91-115.

O’Dwyer, M., Gilmore, A. and Carson, D., 2009.Innovative marketing in SMEs.European Journal of Marketing, 43(1/2), pp.46-61.

Phillips, J.A. and Nugent, C.N., 2014. Suicide and the Great Recession of 2007–2009: the role of economic factors in the 50 US states. Social Science & Medicine, 116, pp.22-31.

Pishvaee, M.S., Razmi, J. and Torabi, S.A., 2012. Robust possibilistic programming for socially responsible supply chain network design: A new approach. Fuzzy sets and systems, 206, pp.1-20.

Reisberg, A., 2013. Shareholder Value after the Financial Crisis: A Dawn of a New Era?.

Spence, L. and Bourlakis, M., 2009. The evolution from corporate social responsibility to supply chain responsibility: the case of Waitrose. Supply Chain Management: An International Journal, 14(4), pp.291-302.

Stockdale, A. and MacLeod, M., 2013. Pre-retirement age migration to remote rural areas. Journal of Rural Studies, 32, pp.80-92.

Storey, J., Basterretxea, I. and Salaman, G., 2014. Managing and resisting ‘degeneration’in employee-owned businesses: A comparative study of two large retailers in Spain and the United Kingdom. Organization, 21(5), pp.626-644.

Tremewan, C., 2016. The political economy of social control in Singapore.Springer.

Vieira, L.M., Aguiar, L.K. and de Barcellos, M.D., 2010.Understanding the coordination mechanisms in a fair trade fruit supply chain.Journal of Operations and Supply Chain Management, 3(2), pp.13-25.

Welch, C., Piekkari, R., Plakoyiannaki, E. and Paavilainen-Mäntymäki, E., 2011. Theorising from case studies: Towards a pluralist future for international business research. Journal of International Business Studies, 42(5), pp.740-762.

Xi, X. and Poh, K.L., 2013.Using system dynamics for sustainable water resources management in Singapore.Procedia Computer Science, 16, pp.157-166.

Zhang, S.X. and Babovic, V., 2012.A real options approach to the design and architecture of water supply systems using innovative water technologies under uncertainty.Journal of Hydroinformatics, 14(1), pp.13-29