Strategic Management Accounting

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Greggs Plc Report
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a)

Greggs are currently expanding and continuing to open more and more stores across the country; in the last financial period 84 net new shops were opened, as well as 183 current stores refurbished. In the current financial period they hope to open 90 net new stores; this means that some struggling stores would be closed and new stores in more prosperous areas would be opened. (Greggs, Netherton 2011) The company believes in investing on internal development to gain access to the markets and products in which they operate. In the previous year 2 new bakeries were opened to further this point, these are based in Newcastle and Cumbria. (Greggs, Netherton 2011) This means they would be producing exactly what they require and would not have any excess products. According to Bowman’s strategy clock Greggs employ the broad differentiation strategy. This involves mid range pricing for high quality products. Source: Johnson, Scholes & Whittington, 2008:225

Source: Johnson, Scholes & Whittington, 2008:225

As you can see above there are not many competitors, if at all, within the broad differentiation section. There is much competition within the other sectors; this is possibly why Greggs’ strategy works so well and why they have had an increase in profits last financial period. Customers are well aware of what level product they are expecting to receive, although they will not be of the highest level, they would be expected to be better than those which other companies supply within the same price range. This leads onto their next strategy, providing quality for value. Their prices aren't perceived as being too low; however for the quality of the products they are relatively low. They achieve this by using internal development, as stated above. Because they have found it cheaper to produce, compared to out sourcing, they are able to pass on the savings. This is because they will only be producing what is required,...
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