A Market Environment Situation Analysis
A Report Proposal to Enter New Markets and Increase Bestco’s Market Share
Authored by:
Report Aim:
This report will provide a platform to develop a full market analyse of Bestco Supermarket Ltd’s proposed product expansion of commodities from Bulgaria.
Introduction – Report Objectives:
This report has will carry out a market environment situation analysis of the proposed product expansion of commodities from Bulgaria. This will include an evaluation of the Macro environment, Micro external environment and Micro internal environment. The Macro and Micro elements will be summarised using a PESTLE and SWOT analysis to identify the strategies to enter new markets and increase our market share.
Findings:
Bestco’s success is determined by Macro and Micro external and internal environment influences. The Macro environment is the major external factors that influence Bestco’s decision making process, performance and success. This can include political, economic, demographic (social), technological, legal and environmental issues. The Micro external environment is the factors that influence Bestco’s immediate area of operations. This can include issues regarding competitors, suppliers, distribution channels and customers. The Micro internal environment is also the factors that influence Bestco’s immediate operations. This includes such issues as Bestco’s performance and decision making process.
To maintain our success, Bestco should understand existing influences and adopt and manipulate the influences to our advantage. This can be achieved through a PESTLE and SWOT analysis.
PESTLE Analysis:
PESTLE is an acronym for the Political, Economic, Social, Technological, Legal and Environmental factors that influence an organisation. Although a PESTLE analysis predominantly highlights the Macro environment factors of a business, these issues subsequently influence the Micro external and Micro internal environment factors. It is for this reason that the PESTLE analysis below (Table 1.1) will identify the Macro and Micro external and internal considerations of importing Bulgarian products and launching them within our two stores at Kilburn and Cricklewood, Northwest London.
SWOT Analysis:
A SWOT analysis creates a structure to review strategy, position and the direction to be taken by an organisation. SWOT is an acronym forStrengths, Weaknesses, Opportunities and Threats. The diagram below (Diagram 2.1) will evaluate the strengths, weaknesses, opportunities and threat considerations of importing Bulgarian products and launching them within our stores at Kilburn and Cricklewood, Northwest London.
Table 1.1
Issues Macro Environment Factors Micro External Environment Factors Micro Internal Environment Factors
Political Issues:
Trade Agreements & Tariffs
Bulgarian Government
Bulgaria became a member state of the European Union in January 2007 (EU).
Trade between Bulgaria the UK has a more favourable free trade agreement than it was before Bulgaria became an EU member (EU Commission).
Conditions set on EU membership have resulted in Bulgaria becoming a more favourable country to trade with. Bestco have the opportunity to enter the new market of Bulgaria and take advantage of expanding our existing market share through market stimulation and development of Bulgarian food products in the UK. It is suggested that Bestco focus its attention on Bulgarian suppliers of food and beverages (Arton Capital, Invest Bulgaria).
As a member of the EU, trade between Bulgaria the UK is logistically and economically more favourable than with our current trade partners in the Middle East(EU Commission).
Bulgaria has a fast expanding export market. However, their UK export market is new. Bulgaria’s main export destinations are Turkey (11%), Germany (10.5%), Italy (10.3%), Greece (8.9%), Belgium (6.3%) and Romania (4.8%)(Arton Capital, Invest Bulgaria).
Economic Issues Since 2008, the UK economic recessionhas dictated and shifted the needs of external customers. Market orientation has been an important part of Bestco’s success. We have achieved this through price competiveness. The introduction of cheap products from Bulgaria will increase our existing market share through market stimulation.
Bestco’s Economic Competitors: Although there are idual small supermarkets supplying Eastern European food and beverages, there lacks an outlet that caters for the expanding Bulgarian demographic.
An evaluation of the cost and popularity of Bestco’s existing products should be made, so that those products with the least profit margin can be replaced with a Bulgarian alternative that will provide a larger profit margin. The profit margin increase will also be achieved through favourable duty tariffs and cheaper products and logistics.
Social Issues The local demographic has shifted to include a large Eastern European community; with a high concentration of Bulgarians. Bestco has met the needs and expectation of customers through the variety of products we have supplied from rare markets abroad; serving the demands of our various ethnic communities. Incorporating Bulgarian products in our stores, will allow us to continue our market orientated focus.
Internal product promotion will be effective, but low in cost. Initially, the products will be displayed below a Bulgarian flag and then incorporated within their product placement areas within the stores.
Technological Issues Bestco should invest in a computerised till to enable accurate evaluation of the buying habits, costs and profits of our existing products.
Legal Issues Bestco will maintain to adhere to Employment Act 2008, the Equal Opportunity Act 2010, the Immigration Act 1990 and the Health & Safety at Work Act 1974. Whilst trying to reduce costs, Bestco will maintain to adhere to employment law by paying the minimum wage and adopt anti-discrimination policy during the recruitment and selection process. In addition, Bestco will maintain legal vigilance when recruiting non-nationals.
Environmental Issues When sourcing Bulgarian suppliers, Bestco should endeavour to research that their ethical practices meet EU and international codes of practice.
Conclusion/Recommendations:
Market orientation has been a fundamental part of Bestco since its inception. We have predominantly achieved this through our endeavours to meet and exceed our customer’s needs. We have to adjust our marketing orientation to incorporate our increasingly changing customer base. With this in mind, product adjustment is required. This report will provide a platform to develop a full market analyse of Bestco Supermarket Ltd’s proposed product expansion of commodities from Bulgaria.
Bibliography:
• Arton Capital. Accessed at: http://www.investbulgaria.eu/a/about-bulgaria/economy/trade.html
• BBC, ‘Bulgaria Profile’(24 July 2013). Accessed at: www.bbc.co.uk/news/world-europe-17202996
• Charles, Gemma. (2007) ‘CIM puts forward new definition of marketing’, Marketing Magazine.Accessed from: http://www.marketingmagazine.co.uk/article/739946/cim-puts-forward-new-definition-marketing
• European Commission, Trade. Accessed at: http://ec.europa.eu/trade/policy/countries-and-regions/agreements/
• European Union. Accessed at: http://europa.eu/about-eu/countries/member-countries/bulgaria/
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