Assignment

Assignment



Assignment

Question 1:

A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis.

The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection.

Strengths

PIPERS CRISPS's key strategy has been to customize its products and services according to specific local market needs.The company has developed its customer insight skills, particularly through dunnhumby, its consumer research company. Through analysis of sales and loyalty card data, PIPERS CRISPS develops an understanding of local needs.

Focus on product affordability

PIPERS CRISPS has gained a broad appeal by offering its products at affordable prices. In response to the recession, PIPERS CRISPS launched around 500 new products as part of its “Discount Brands at PIPERS CRISPS” initiative. Through this new range, PIPERS CRISPS ensures that every customer has a product to match their budget without compromising on choice or quality. PIPERS CRISPS has outperformed the market even in its non-food categories despite consumers cutting down on non-essential purchases. The company's products in key categories such as electronics and clothing are cheaper than they were last year.

Weaknesses

PIPERS CRISPS has recalled certain of its products in recent months. In June 2009, the company recalled its 567gram of its herbal products that were sold in Ireland. The recall was made after pieces of plastic were found in a number of cans. PIPERS CRISPS also recalled all its fresh & easy brand chili lemon flavored pistachio nuts as they may have been contaminated with salmonella. Recall of these products indicates a quality lapse and may discourage consumers from buying products at PIPERS CRISPS. This will not only cause financial loss to the company but also damage its brand image.

Opportunities

Entry into the Indian market

PIPERS CRISPS's entry into India reinforces the company's focus on global expansion. The company is currently establishing a cash & carry business that will offer a range of spices.

Threats

Recessionary climate

Like most advanced economies, the UK is currently in the grip of recession and is forecast to remain so throughout 2009. The UK's economy contracted 2.4% in the first quarter of 2009, the biggest year-on-year decline in 51 years. Based on the falling GDP rates during late 2008 and early 2009, the International Monetary Fund (IMF) estimated that the UK economy will contract 4.2% in 2009. Amidst the recession, declining income and increasing unemployment, consumers have lesser disposable income and have become more vigilant of spending. As a result, the demand for the company's products particularly for non-food will be under immense pressure during such difficult economic times.

Intense competition in the UK grocery market

Although PIPERS CRISPS isa small company in the UK, it now faces ...