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

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Introduction

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. ...read more.

Middle

External Factors: PEST: * Social factors would include people's perceptions of Kwik Save, TV programmes such as Watchdog along with people's lifestyles. * Economical factors that could effect Kwik Save and the decisions could include: * GDP per head: Income affects spending habits. * Inflation: As this inflation increases, prices go up and demand goes down. Also wages and costs go up so there becomes a wage-price spiral. * Real disposable income: As this increases consumers will spend more on luxury goods. * Exchange rates: As the � increases imports also increase. * Technological factors could include advances in EPOS and EFTPOS as well as technological advances in products pushing the price of popular technology down. * Political factors include trading standards, statutory rights and food regulations. The single currency would also effect them as there would be price transparency and barriers of entry would decrease. Opportunities: * These options could be to expanding with technology. ...read more.

Conclusion

A loyalty card could be introduced. This would mean that they would be able to monitor what people are buying and other information. This could prove to be very useful information for promotion, expansion and extension strategies. * They could benefit from economies of scope, this means spreading the risk. They'd have product and service variety to attract customers. Such services could include online shopping, cr�ches and financial services. * They could undertake mergers and acquisitions. This would mean they would not need to build up good will in a company as it would already be there. * They need to be aware of overseas competitors as they are in a niche market. Competitors will notice the gap and attempt to enter then market. They need a USP (Unique Selling Point). * They should keep the value of money quality but try to increase the social status of the company as that is quite low in people's perception. This could be done by changing the layout or offering a wider product range. Rashpal Sehmi Business Strategy Cs01rs Assignment ...read more.

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