Also in 1 994 Gregg acquired 424 bakers oven shops which enabled Gregg to have an in store bakery this enabled them to put Gregg shops in built up busy areas and Bakers oven shops in smaller previously untouched areas with a lower population as the shops could bake what is needed for demand. Gregg offers take outs so it can be a quick and easy visit to the store whilst bakers oven offers seating and works similar to a restaurant for people on the move wanting a seat and something to eat.
Gregg competes with all bakery chains and food outlets as ell as coffee shops to gain customers as Gregg relies on people needing food so they must make their products affordable and of high quality in able to ensure that customers will choose their products rather than other food retailers. Gregg has also set the standard for other bakery chains by expanding outside of the UK with two shops in Belgium and plans for many more shops in Europe making them the first British bakery chain to attempt and expansion outside of the ASK.
In 2008 the global bakery products market is estimated to have been worth SIS$275 billion making it a very profitable market which is ever increasing. The forces talked about earlier are environmental forces, which are made up of the macro and micro environment, macro environment is uncontrollable external factors to the business, which consists of political, economic, social, technological, legal and CEO environmental factors. The micro environment is made up of stakeholders and how their ideas and demands affect how the business operates.
For the purpose of this essay will concentrate on the macro environmental forces in the form of a Pestle analysis. Gregg is British bakery chain which operates mainly in the LIKE with at least 1 500 shops, the overspent in the UK is classed as stable so this is of benefit to Gregg as it does not have to keep changing because of an unstable government making changes to laws and legislations or with a shift of power between parties battling to gain power.
Political factors affecting Gregg consist of health and safety regulations for employees which means that Gregg must operate in a safe way in order to prevent any injuries to staff or customers. All businesses must take great interest in health and safety but Gregg being a bakery chain that sell food products must pay extra attention to health and safety as a cut loud contaminate products and cause waste. Staff members must be careful while working to ensure there are fire exits accessible and the floors are clear of obstruction along with suitable oven cleaning equipment and personal protective equipment.
Gregg must adhere to food hygiene legislation set forth by the government such as the HACK to ensure that no cross contamination has occurred and no bodily fluids or pathogens have come into contact with the food which could cause harm to a customer through food poisoning. Also any plasters worn must be blue in color and waterproof o if it comes off in the baking process and comes into contact with any of the bread mixes or pastry mixes it is easily identified and taken out preventing contamination through blood etc.
Therefore all food must be of optimum quality and not posing a risk to consumers health and wellbeing by being unhygienic or uncooked. This brings me onto my next point of food safety legislations that state that meat products must be cooked to achieve a temperature of degrees also legislation to do with hot holding foods and how long food can be hot held. Another political factor is the minimum wage s the government and not Gregg sets the minimum wage it expects Gregg to pay its workers, this can pose threats to some bakery chains as the pay rate for people over 21 is E. 8 and usually there are a few people in the stores working for a few hours so this is going to eat away at the profits and smaller stores will be the worst affected however it will affect the likes of Gregg as well through eating profits. Gregg must also adhere to public holidays by not opening up on days that are specified to enable workers to have a day off, the government sets the public holidays and the businesses must adhere. Gregg stated that the 2 extra public holidays in 2011 had cost the business E million in profit.
The government in the UK may be classed as stable but the economy of the UK like so other many countries is in ruin, but has this had an adverse effect on Gregg? At the Start of the recession in 2008 Gregg pre-tax profits were EYE. 2 million up from EYE million in 2007 which was just before the start of the recession. Was this rise in profits a freak anomaly? No, Gregg is making steady progress year on year throughout the recession with pre-tax profits in 2009 of EYE. Million and 2010 EYE. 2 million especially. This goes to show that the recession has actually helped Gregg as a business with people cash strapped and in need of food the delicacy of a reasonably priced pasty seems to have been first port of call. However the recession has affected people all over the UK and in 201 1 the London riots showed just how bad it was with 19 shops being forced to closed whilst one shop was looted and another set on fire in Peacock.
The London riots also badly disrupted the Gregg delivery vehicles through prevention of access to stores and damage to vehicles. This has ultimately caused damage to profits Of roughly El . 2 million as profits dropped. The London riots were one Of few social impacts that affected Gregg in 2011 along with recession which as I have already said saw Gregg prosper with profits rising, this was due to Gregg selling cheap, quality food in readily available areas to attract customers.
Gregg, like all businesses cares about its consumer perception, this has led to the creation of 1 50 breakfast clubs in primary schools which aim to give school children a free nutritional breakfast which is provided by Gregg. This scheme also gets parents and careers in on the action as they can lunette to serve up the food after the delivery of food is made to the schools this will give Gregg a better consumer perception. The breakfast club scheme has been running since 2000 and will continue to run and expand to include more schools.
Gregg also recognizes that where its shops are located will determine the sales outcome, so it has opened stores in student friendly areas in towns and indeed in some university campuses as it recognizes that the typical student stereotype is someone that is always busy hasn’t got time to wait around and is pretty skink most of the time, what better place to locate popular bakery that has cheap products than in an area that is predominantly student and work orientated with lots of people wanting the products on offer.
Gregg also has a foundation set up with a hardship fund, this helps there consumer perception as they allow people to apply for household appliances if they cannot afford to buy them due to poverty. The hardship fund operates in the four counties of Northeast England and has been running since 1993 and has so far given around E million to people in poverty in the Northeast.
Having things like this showing people that Gregg Ares will predominantly boost sales as it helps their social status and people will know that Gregg helps people in poverty with its profits and as a result of this people may be more willing to purchase Gregg products. Technologically Gregg has been affected with an increase in computer technology which has led to new advertising campaigns, as well as Gregg advertising with billboards and television adverts etc. Hey now also advertise on the internet through their easy to use website and not only are their advertising techniques improving with technology but their checkout ermine’s are improving too with new compactness technology being implemented in stores which enables bank cards with this technology to just be tapped against the terminal and the payment will be made, this has been implemented to cut down on queues at peak trading times to keep the customers happy so they are not waiting around for ages.
Gregg also benefited through some free advertising on the 20/6/2011 with a newspaper having the headline queen has Gregg cater for dinner party with 8000 big name guests, this will no doubt have boosted Gregg sales With royalists hinging if its good enough for the queen its good enough for us so this will have led to an increase in profits. Gregg has plans to open up 600 more stores in the UK to help boost profits by having more stores in areas that do not currently have Gregg stores to tap into new customer pools to generate a larger customer base.
Along with the plans for expansion in size are plans to expand into new areas such as frozen food with Gregg planning to create branded frozen foods such as sausage rolls to be sold the Iceland food store chain. This will help Gregg also tap into new markets as they have never before been involved with frozen food sales and this offers great scope for expansion. Gregg is affected legally though hygiene laws and requirements such as the HACK food hygiene regulations guarding against food poisoning.
This prevents Gregg from being unhygienic and posing a risk to consumers. Gregg must also abide by the data protection act 1998 as it takes customer information for storage etc. It must not distribute this to third party groups or do anything else with it without the person’s permission. Gregg is also legally required to pay the national minimum wage to its employees. When laws are eased in regards to bakeries etc.
Gregg must accept them and work within the law or face the risk of prosecution, court cases and potential fines or store closures. Like all businesses Gregg knows that people are getting more environmentally friendly and as a result are striving to be more CEO environmentally friendly themselves, trying to work upon the reduce, reuse and recycle principle. Gregg is trying to reduce landfill waste, recycle what it can and reuse what it can in order to cut down on pollution.
Gregg is also offering some of its unsold food to charities in order to try and give people he chance to have food if they cannot afford it or if they are homeless. Gregg are not handing out free carrier bags to everybody now as well unless people ask for one if they have a lot of stuff they won’t get one. Also on Gregg paper bags it says keep Britain tidy which shows that it wants the customers to put the packaging in the bin or recycle it if possible.
Paper is also bio degradable so will rot away so will not damage the environment as much as plastic will. Gregg knows that it needs a good consumer perception and as a result throughout the different environmental forces affecting the inning of the business Gregg has stayed focused on this aspect with focus on charities and the Gregg foundation along with the breakfast clubs. Gregg is an ethical company with interests to help the people in need of it and trying to reduce its carbon footprint whilst offering tasty, reasonably priced foods.
Gregg is not really threatened by the changing environment as it is still making a profit which is getting bigger every year it is more prompted to do things slightly different for example the packaging and not giving out free plastic bags to everyone. As a result of my PESTLE analysis have formulated n Insofar matrix to help formulate an idea for Gregg to respond to and prosper in its changing environment.
For market penetration I thought of new advertising campaigns advertising new applications for android and tablet technology such as the pad which will give users details of where the nearest Gregg store is and what deals are on in the store along with prices. This brings me onto my next idea for market penetration, with the UK being in a financial crisis if prices are slightly lower or there are offers on for multiple purchases this could increase the sales and ultimately the profits if here is say a 2 for El . 0 on app pasties this will no doubt increase the number of sales as people like to think they are getting a bargain. For market development came up with the idea of new stores in other areas that do not currently have Gregg possibly because of a smaller population, this could gain Gregg a larger customer base. Also came up with the idea of focusing on expansion and opening more stores outside of the UK in order to globalize Gregg more so further expanding the customer base.
My last idea for market development is to have Gregg stores on more university campuses tit student friendly deals on which would boost sales on products currently sold through Gregg. For product development I came up with the an idea for more pasties and sandwiches along with more varieties of hot drink potentially even a coffee bar inside the stores or in certain stores kind of like a mini Cataracts so there are a larger range of coffees so that people can call in and get a quick bite to eat and get a nice coffee in the same place rather than have to go to numerous places or just settle for a basic coffee.
For diversification I came up with an idea for frozen food, as a kind of expansion o Gregg plans to sell frozen sausage rolls in Iceland stores and develop from there I thought Gregg could sell part baked frozen breads in store for customers that potentially want bread but not straight away for example if they are having a dinner party and are preparing a week in advance or so they could buy them put them in the freezer and are then able to bake them prior to the event starting so the bread is still warm.
I also thought Gregg could allocate a cake maker to larger stores so they could receive orders for cakes for special occasions and make cakes to specifications of the customer or example special birthday cakes or a cake for a wake after a funeral. The idea I think Gregg should take on to prosper in the changing environment is simply market penetration, I believe they would benefit from an application for android or tablet technology which would inform potential customers where the nearest Gregg store is and the deals they have on.
Also new television advertising campaigns advertising the application and the deals that are on in store would increase the number of potential customers entering the stores. Having lower prices or better promotions on products will cost profits as more people will be willing to buy more than one thing so will increase their basket spend, this would mean that potentially a El visit to the store could turn into a E visit with the right promotions in store and advertised well.
Due to the current financial crisis and talk of double dip recessions believe this would help Gregg continue to make profits in tough times and potentially make profits soar higher. By lowering prices and having better promotions it eliminates the risk of being undercut by smaller bakeries as they will not be able to afford to undercut the prices of Gregg as they will et less customers and if Gregg a more reputable bakery is cheaper they will struggle to generate as many sales.
Also new technology and advertising campaigns could increase the size of the customer base with potentially more people hearing about the deals and knowing where their nearest store will be. Smaller bakeries will not be able to afford extra advertising to this scale or the increase in technology to hire someone to create applications. This would also see off threats from supermarkets with bakeries as Gregg would stay market leader for bakery products in the UK and it would give them the scope o develop further.