1.1Terms of reference
This report is the result of analysing the Netto case study. The report identifies the key points that have helped Netto become a successful discounter store, the environmental analysis and problems that it may face in the future and how to maintain its competitive advantage.
2.0 SWOT analysis
§Netto has become a increasingly visible & recognisable high street name
§Netto has a range of products that covers 90% of the daily needs of customers
§Netto consolidated its position in Denmark, now looking at possibility of exporting the concept, in Germany and UK
§Penetrating 4 different markets successfully
§Established since 1981
§Good market knowledge
§Very focused company objectives e.g. just concentrating on being LRD and not supermarkets
§Price competitive products
§Good USP (special offers, concessions)
§Discount market leader in Denmark
§Good layout of shop (atmospherics), no nonsense quick access to products for customers
§Multi-tasked staff and good training and development team
§They have a flexible marketing strategy, pricing etc is determined by the market / industry
§Netto promotes quick access to the merchandise
Maintains a competitive retail price at a low profit margin
§People are sceptical about products which are cheap and therefore not associate them with quality (in UK market)
§Poor communications mix
§Brand name not as good as rivals
§To increase number of concessions in Netto stores by improving selling space
§Extend range of the retailer
§Improve store traffic
§Extending their range of offered services by diversifying into areas previously untapped by retailers e.g. retail banking, new retail formats.
§A challenge for Netto will be if they can get 'low price equals cheap' to 'low price equals value' to attract operate number of higher spending customers from social groups A and B
§To maximise its products offer and cost efficiency
§The company views competition on industry and regional level
§Competition coming from two-levels industry and regional. Industry level - Aldi, Kwik Save, Lidl, etc.
§Kwik Save is currently the UK's leading food discounter and 6 largest retailer in the grocery market
§Big supermarkets e.g. Tesco & Asda offering discounting product range e.g. 'Asda Price' therefore more competition from superpowers of the industry
§Future of LDR's is shaky as seen by many analysts
§Netto will have to consider population, demographics, social mobility - are customers able to get to them, consumers lifestyles, etc.
§Attitude towards foreign products and services * e.g. East German customers welcomed Netto who are from Denmark originally.
§Aiming more at socio-economic group of C1, C2, etc.
§Netto introduced £1000.00 tax free prize to employees who gives a hint of a new location
§Policies - Legislations, Netto employs locally so introduction of minimum wages will...