Strategic Evaluation and Financial Analysis of Greggs

Introduction

The different strategic interventions that are devised by business, such as business dissertation help, are specifically reliant on the external and internal environmental evaluations which supports in identifying the situation or the position of a venture in a particular market. The financial evaluation of an organisation supports in developing a clear view on the performance and growth prospects or the loopholes that a business must consider in order to support their sustenance in the long term perspective. In this connection, the current discussion would be evaluating the external and internal position of Greggs, which is a British bakery chain specializes in savoury products including bakes, sandwiches, sausage rolls and sweet items including doughnuts and vanilla slices, while analysing their financial situations in order to understand the strategic position and the concerns that are being faced by the business while repositioning the brand through food retailing services by focusing on ‘food on the go’ (Greggs, 2021a). The discussion would also suggest certain recommended interventions which would allow the business in making a strategic growth in the markets.

The strategic external position and choices of the company

PESTLE analysis

Through PESTLE analysis, it is also possible to analyse the external business environment for Greggs in order to manage their activities and secure future sustainable development. The analysis will be evaluated further,

The strategic internal position

Greggs is benefitted through the brand image and the quality of bakery propositions that are made by the same in the UK markets. On the other hand, the green sourcing activities of the business has significantly supported the continuous growth while addressing the environmental and social concerns along with strong networking capabilities has supported the intensive growth and operational success factors (Greggs, 2021b). However, the organisation has been encountering significant challenges in managing the cost of their operations and the lower expansion rates which has limited their sale scopes to the saturated economy of UK. Another major weakness of the firm is lack of marketing strategic planning, for which the organisation face difficulties to promote their products and services across the bakery and food industry of the UK and there is also slowdown of the international business expansion.

Lestari et al. (2020) opined that, the lower rates of expansion made by a business limit the scope of improving sales. Therefore, the organisation continued to operate in the saturated UK markets which limited their scope of making sales. The increased competition in the markets and the threat from the new entrants has been challenging the sustenance and growth of Greggs. The lower levels of diversified propositions offered by the organisation again contributed towards limiting their scope of expansion and market penetration (Eikelenboom and de Jong, 2021). Therefore, Greggs is threatened through the increase in competition and the insufficiency of diversified propositions being offered to the customers, which might result to shifts made by the target audience to other competing businesses. The firm also has the opportunities of ecommerce business growth, adopting latest technology for running their operations, marketing strategic planning and international expansion as well as product diversification, through which Greggs would be able to gain high competitive advantage by strengthening their customer’s base (Greggs, 2021b).

Analysis of the financial performance of the company

The total revenue that was earned by the organisation in the year 2018 was £1,029,347 which grew to £1,167,900 in the year 2019, which reflected a positive financial growth of the venture (Finance.yahoo.com 2021). However, in the year 2020 the business earned total revenue of 811,300 which was due to the sudden outspread of Covid situation and the lack of affordability of the customers or the disruptions in the operational outputs. The gross profit of the organisation also reflected similar outcomes as the organisation made £649,913 in 2018 which grew up to £749,800 in 2019 but crashed to £510,900 in 2020 (Finance.yahoo.com 2021). The current profit margin of the organisation is down by 1.6% (Finance.yahoo.com 2021). However, it has been observed that the organisation would continue to re-establish itself and its profitability by the year 2021 (Greggs, 2021b).

Summary of the strategic position of the company

The organisation has taken the initiative of proposing quality bakery offerings to the customers, but failed to diversify the range of their propositions which limited their scope of ensuring hefty sales. The brand image of the organisation has supported towards building loyalty and commitment of the customers. However, the insufficient expansion in different other European and emerging economies limited the scope of sales (Agustia et al., 2020). It was observed that, the UK economy was saturated through the active participation of different existing competitors and new entrants. Therefore, the insufficient expansion made by the organisation largely reduced the scope of improving their sales volume. The organisation positioned their offerings as premium bakery which limited the scope of attracting a huge target audience in the middle of the sudden pandemic outbreak, limiting the growth prospects of the organisation. The purpose of Greggs is to make the good freshly prepared food accessible to everyone, with the aim of becoming the customers’ favourite for ‘food on the go’. Hence, the organisation focuses on expanding their business in another European Union country and attracts the audiences across the market through ‘food on the go’, so that their sales volume would be improved in long run the target market will be Italy as the Growth rate of the market is high with huge population and demand for the online food services. The organisational strategic planning includes quality products delivery, making the products convenient to the customers, creating values or the stakeholders and maximising service efficiency to gain high market share in the food and bakery industry (Greggs, 2021b).

A clear strategic recommendation with rationale

Diversifying the propositions: The organisation must take the initiative of diversifying the range of bakery propositions as it would support the organisation in attracting the attention of a large number of target audiences. On the other hand, the proposition of diversified offerings at differentiated prices would allow the organisation in gaining a competitive edge while avoiding their total dependence on the saturated UK markets. Therefore, the diversification of the propositions would allow the organisation in improving their sales prospects while addressing the strategic growth requirements. Greggs must focus on sourcing organic vegetables and ingredients to manufacture fresh food items for serving the customers healthily and also maximising the business sustainability.

Making expansion in different European economies: The expansion to different European economies would allow the organisation in reducing their dependence on the saturated UK markets in order to increase their sales volume and Greggs must focus on expanding their services of food retailing to Italy due to huge population and business growth. The increased sales of an organisation would contribute towards the profitability and growth of the business while ensuring a competitive advantage over the existing players and the new entrants in the UK markets. It is mandatory for Greggs to choose the market in Italy for establishing the retail shop and promote the products and services successfully across the international markets. The Italian market is growing with rapidly and it would be beneficial for Greggs to open a shop for improving brand visibility and target the audiences with quality food items for becoming a successful food retail organisation. Additionally, developing mobile application is essential for the firm to provide the scope to the customers for accessing the organisational website and place their orders to get delivery within effective time.

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