Business Strategy - assessing Kwik Save's situation both with internal and external factors.

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Rashpal Sehmi                Business Strategy

Cs01rs                Assignment

Business Strategy

When assessing Kwik Save’s situation both internal and external factors have to be taken into consideration:

Internal Factors:

Strengths:

  • Their philosophy is to provide foods at a discounted price, and are known for “No Frills” range which are at very low price. So therefore they promote themselves with inexpensive goods but no compromise on quality.
  • They have many stores around the UK, in 1997 they had 979 whereas the market leader Tesco had 575 outlets. Theses are also situated in the Central Business District which means they are accessible for consumers.
  • They were one of the firsts to introduce EPOS to help with the efficiency of operation of the company. This is an expense in the short term but in the long term it is beneficial.
  • Their gearing is low which is a good thing as they would not be highly effected by changes in interest rates.
  • Their pricing strategy is just above the cost of production as they don’t use any value added costs.

Marketing Strategy:

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Weaknesses:

  • With their discounted prices Kwik Save’s social status is low and this means they only attract certain classes of people. Using the Socio Economic Levels this would be C, D, E.
  • They are faced with the problem of having high rent costs being in the CBD and will be affected by increases in property more than out of town companies.
  • There are also competitors like Tesco’s who has the highest market share at 20.3% which is near a monopoly at 25%.
  • They show low “pulling power” compared to rivals and also have no customer loyalty ...

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