Greggs plc

Topics: Marketing, Strategic management, Barriers to entry Pages: 30 (6699 words) Published: September 13, 2004
1.0 Executive Summary

Greggs plc intend to expand their operations into international markets in order to satisfy their overriding objective: 'to be Europe's No. 1 Bakery'.

Germany has been selected as the host country and justification for this decision has been discussed.

Moreover, Greggs will enter the German Bakery market through the employment of a 'Foreign Direct Investment' method, more specifically a 'Sales and Production Subsidiary'.

This report outlines the blend of marketing mix components used to position the offering; the implementation method adopted to ensure effective product and service delivery; and the control mechanisms utilised to make sure that objectives are achieved.

2.0 Introduction

Greggs is the currently the leading UK retailer in the bakery market having experienced high levels of growth in 2002. The company achieved revenues of £422.6 million, an increase of 11.9% on the previous fiscal. Its operating profit also witnessed an increase of 11.8% to £35.3 million in 2002. Their popularity has rapidly increased as consumers are seeking quick, convenient and indulgent foods to complement their fast-paced lifestyles .

Greggs is actively expanding their operations and have over 1,200 retail outlets under the Greggs and Bakers Oven brands . They entered into the international arena in 2003 with the opening of two outlets in Belgium. This strategy was pursued in order to fulfil the company's long-term objective of becoming a leader in the European market place.

Further international expansion will therefore satisfy their current objectives and enhance their presence in the European bakery market.

2.1 Report Objectives

To justify market choice

To undertake internal and environmental analysis for the home and host country

To identify the most appropriate foreign entry strategy

To tailor a services marketing mix to requirements of the host market

To suggest methods of implementation to allow successful market penetration

To monitor the progress of this venture through the employment of control mechanisms

3.0 Mission statement

"We intend to be Europe's finest bakery-related retailer, achieving our ambitious growth targets by attaining world-class standards in everything we do. Our purpose is the growth and development of a thriving business for the benefit and enjoyment of employees, customers and shareholders alike.

3.1 Values

Greggs is a customer-focused business, seeking to provide excellent products and services that deliver enjoyment and value-for-money. We are committed to people development, within a considerate culture that combines autonomy and accountability and maintains a strong focus on profitability. In all our activities, we aim to achieve excellence through continuous improvement".

4.0 - Market Choice

Cannon and Willis propose a method of "simple elimination " to identify a potential host market. This method of market choice ensures that the remaining country satisfies all main criteria highlighted by the organisation. The diagram below shows a systematic approach to finding a suitable market for Gregg's expansion. Industrial, economic and cultural factors will be integrated into the selection process as these are central to Greggs' operations in addition to their main aim: 'To be the no.1 bakery retailer in Europe.'

Parallel to their objectives, all non-EU countries will be excluded from the selection process. Greggs' second priority is to enter markets which display fast growth in bakery markets. The countries with the highest levels of category growth are shown below:

Figure A

Country Cakes and Pastries Market - % Category Growth 1995 - 1999

Portugal 4.60%

Germany 3.70%

France 3.60%

Spain 1.80%

Denmark 1.80%

Using this table, Greggs may eliminate Denmark and Spain from their market choice selection process.

Psychological distance between the home and host country can also determine the success of...

References: Hollensen, S. (2001)Global Marketing - A market-responsive approach. Essex: Prentice Hall
Jobber, D
Johnson & Scholes (2002) Exploring Corporate Strategy. 6th edition, Essex: Prentice Hall
Pickton, D
Usunier, J. (2000) Marketing Across Cultures. 3rd edtion, Essex: Prentice Hall
Young, S., Hamill, J., Wheeler., C
Reuters Business Insight. (2004) Growth Strategies in Bakery Strategy. Boston: Vol. 2, Issue 3
Sterling, J
Tayeb, M. (2000). International Business - Theories, Policies and Practices. .London: Pearson Education Limited
Waterman, Robert H., Jr
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