Analysis of U.K Supermarket Development Strategy

Part one: Supermarket retail industry introduction

Effective strategy is developed first by identifying and understanding the implications of the changing events in the business environment. Many of the events occurring currently have a wide international impact, and they may be seen to be influencing the results and responses of large supermarket retailers. The changes, or issues, that we see as important from a strategic planning perspective are:
 The growth of global companies
 Changing customer characteristics
 Innovation, format changes
 Customer loyalty
 People
 The impact of information sciences and technology(David Walters & Jack Hanrahan 2002)

1. The growth of global companies
The international expansion is a main trend in supermarket industry. After the fully development in European countries, the retailers begin to move their eyes on Asian countries. During the globalization, retailers should pay more attention to the government policies of the host countries. Planning permission is increasingly difficult to obtain, as Government declared policy is to maintain the viability of existing retailer. For example, Wal-Mart¡¯s entry into the UK has been made easier by the acquisition with ASDA (Wal-Mart).

2. Changing customer characteristics
Salmon (1996) suggests five attributes that customers have always required:
 Good assortment of quality merchandise
It requires retailers widen the range of product.
 Convenience
It considers accessibility, ease of transaction and possibly home delivery.
 Reassurance
It has become reliance on retailer brand building. The stronger the brand, the more reliable the product and the less needs for reassurance.
 Service
Make sure the transactions supports not get the level causing considerable customer dissatisfaction.
 Competitive price
It requires retailers lower costs by means of advanced technologies and