The Business Environment Essay
The Business Environment
Environment Apple and Waitrose The two businesses that I am going to be for this assignment the two companies are contrasting in the way they are managed and the way in which their market shares incline or decline. Waitrose Waitrose is an operating grocery retailer in the UK market. The retailing industry was not initially at the forefront of Waitrose marketing strategy, it is only in the last two decades that many retailers have taken an optimistic approach towards their management activities.
Waitrose was founded in 1904 by Wallace Waite In 1937, the company, consisting of 10 stores and 160 employees, was taken over by the John Lewis Partnership. In 1908 the name “Waitrose” was adopted. Waitrose has already been supplying the stores over the last two years with over 3,000 Waitrose own label products. Waitrose donates a portion of its profits to a group of charities on a proportional basis. As part of the John Lewis Partnership, all of Waitrose’s employees are assigned the title of Partner and co-owners of the business. The following pie chart shows Waitrose market share in the food industry:
Waitrose is a national business however most of its stores are in the south of England where there are two large distribution centres; Waitrose has no plans to expand overseas unlike its bigger competitors. Waitrose runs such services as online home delivery and has a partnership with ocado to ensure that customers get products straight to their front door. Certainly Waitrose is targeting those of its potential store customers that are too busy to visit their stores, 70% of women that work but are still responsible for the shopping or older people who are not fit to visit the stores anymore.
Waitrose is the tertiary sector, the source of the produce is the primary sector and the factory that manipulates the product by packaging it and branding the product is the secondary sector. Waitrose is not a primary sector because it does not own the farm it gains the sources of produce from, nor does its own the factories that process the food, it owns two distribution centres in the south of London where they distribute the products to the supermarkets from.
These depots are based in Aylesford, Bardon, Bracknell and Brinklow. Apple Steve Jobs and Steve Wozniak founded Apple on April 1, 1976 in Santa Clara Valley, California. The two built the Apple I out of a garage and sold it. The first Apple I computer did not include a monitor, keyboard, or casing. Due to the high demand for the Apple I, Jobs realized that there was a market for small computers. He also realized that he could market the company’s name and the computer’s user-friendly look.
Apple is an American multinational company widely spread across nine countries, which design consumer electronics such as computing, phones, music players and software products like iTunes and Mac Operating software. Apples mission is to go for Technological pioneering that is to produce new, small yet powerful user-friendly products with individual choice in mind. To provide freedom to its employees to think and act in an innovative way which drives the company forward. Below is a pie chart showing the current share of Apple in the android market: http://fortunebrainstormtech. iles. wordpress. com/2012/12/screen-shot-2012-12-11-at-9-52-16-am. png The pie-chart above shows the 2011 operating profit share for Apple stating that Apple owns 71 percent of the market. Waitrose Business purpose Waitrose’s aim is “to provide the convenience of a supermarket with the expertise and service of a specialist food shop”; its motto is “freshness, quality, choice and. value”. Waitrose source over 3000 different products. Waitrose had three core objectives: 1. Generate brand awareness 2. Drive footfall into branches 3.
Generate orders for their online party service ‘Waitrose Entertaining’ The following is a quote from a website: “We want to encourage the production of good Quality food, regardless of scale and whether those who are producing it wish to supply us”. “We take the long-term view and will work with producers to help them reach their objectives, not just ours. We do not want to dilute the integrity or quality of their products”. Reference: http://www. waitrose. com/content/dam/waitrose/pdf/inspiration/foodissuesandpolicies/Small_Producers_Charter. df Waitrose supply’s the following types of food: Waitrose regional, british and local food stamps Waitrose holds a royal warrant to deliver food to the royals, Waitrose provide a home delivery service online for those less able to go to the supermarket and shop for their own products. One of Waitrose corporate practices is to donate a portion of its profits to a group of charities on a proportional basis, whilst individual Waitrose branches manage their own charitable donations and local decisions are made on which charities are to be supported.
Waitrose Swot Analysis Strengths | Weakness | • Reputation/ Customer Perception • Own Labels “Perfectly Balanced” • Fresh/ Quality Foods (own farms) • Partnership with John Lewis • Wide Range of products (in few segments) • Service | • Very dependent on the performance of own labels • Perceived as expensive • Small market share (3%) • Few out of town stores Expansion is difficult due to existing store coverage | Opportunities | Threats | • Expansion into the north-west • Internet shopping (ocado. om) • Sale of Non-food products • Mark four stores • Retail Partnerships • Increase number of services • Online shopping | • Marks ;amp; Spencer’s ;amp; Tesco’s Premium Brands • Overseas groups entering the market • Manufacturers are still seeking to legally slow down the penetration of own brands | Waitrose was the first to introduce self-scanning in some stores, which demonstrates a willingness to innovate and offer a high service thus reducing costs. The partnership with John Lewis gives Waitrose supplier links and economies of scale. The partnership also functions as an alliance therefore diversifying risk.
The association with John Lewis improves Waitrose’s reputation. Waitrose actively promotes its commitment to providing British products and offers products through partnerships with farms and dairies. Apples business purpose One of Apples aims is to maintain constant product innovation to prolong the product lifecycle, which will help in maintaining and growing the market share. Another objective of Apple is to launch new innovative products to keep the loyal customers intact, build new customer base and gain competitive advantage over the competitors.
Apple is also working on developing a strategic approach to grow market share in emerging markets like India. Apple also need to develop ethical suppliers for its products unlike Foxconn (the current supplier of I phone), which usually suffers with labour unrest due to ill and unethical working conditions. In the end, Apple should aim at replacing Foxconn with a better and ethical supplier because having been associated with such suppliers can tarnish the image of Apple and can send wrong signals to shareholders and stakeholders.
Shown below are Apples Smart objectives: Waitrose Form of Ownership Waitrose is a private owned partnership, which means that they are not obliged to disclose as much information as their public competitors. Waitrose is a partnership where the employees within the business operate the whole turnover for the business, being part of the John Lewis Partnership means that profits generated are paid back to all employees. The whole partnership proactively operates as environmentally friendly, honest, fair and ethical as possible.
Waitrose have unlimited liability because the turnover is generated from the member of staff in Waitrose and the john Lewis partnership, it is cost effective, most of the money generated goes to charity, Waitrose owns 3 per cent of the market share of the supermarkets. Apple Form of Ownership Apple is a public limited company which the securities of are traded on a stock exchange and can be bought and sold by anyone. Public companies are strictly regulated and are required by law to publish they complete and true financial position so that the investors can decide in the true worth of its shares.
Business comparison I am going to compare two companies in this section the two companies I have chosen to compare are Apple and Waitrose. I chose these two companies in particular as they are contrasting in the way they are run by their owners. Waitrose is run as a non-profit society and generates a lot of money for charity and Apple is run solely as an industry that generates millions of pounds of profits from the electronics industry. Apple owns over 40 percent of the touch screen phone market and over 70 percent of the tablet industry.
Apple have other threats such as Samsung, however Waitrose threats are other supermarkets like Tesco’s which have a huge share in the supermarket chain, both companies must compete with this competition to substantiate a profit. Apple is a multinational organisation, which has expanded to other countries whereas Waitrose is only based in the United Kingdom. Apple has much more customer base for worldwide purchases and interest. Waitrose however prefers to stick with its heritage and keep to one country.
Apple to achieve its competitive advantage it maintains its products, keeps them up to date to maintain its international competitiveness, Waitrose on the other hand offers a home delivery service called Ocado, which gives them an advantage over their competitors. Image advertising helps boost both companies with both companies overall market share increasing however, both companies must expand their stores and reputation for them to be successful.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 25 May 2018