| Summary: | The objective of this management report is to evaluate through a multi perspectives
lens the strategic implications and decisions that are required to be made by the Fresh Cut
Produce (FCP) business, the largest single business within the Icelandic owned Bakkavör
Foods group.
Key influencing factors behind these decisions for FCP will centre upon the hyper
competition which exists within the grocery retail industry; this industry has dramatically
changed over the last 10 years, with market dominance being continually strengthened by
retailers such as Tesco and M&S resulting in considerable year on year financial
improvement.
The forecast for the next 5 years again shows a considerable transformation in
relation to the terrain of the market, this transformation is influenced by factors such as global
economic downturn, rising input costs and overall recession resulting in lower consumer
confidence and a considerable reduction in the availability of disposal income, these factors
have resulted in a marked rise in the power of the discounter retailers such as ALDI and
NETTO.
The turbulence of the UK grocery retail market and the overall uncertainty within the
UK economy has required a dramatic fundamental change in strategic direction for FCP; the
explanation for and evaluation of this strategic change will be evaluated through a strategic
multi-perspective comparing the strengths and weaknesses of these different approaches.
Initially the document will introduce the background of the Bakkavör business and
the subsequent development of FCP. Secondly the evaluation of the structure within the UK
grocery retail market focusing specifically upon Tesco, Marks & Spencer’s, ALDI and NETTO
and their overall structure, conduct and performance of these companies.
The next stage of this document will evaluate perceived effects of UK recession on
consumer confidence and their spending habits, the results of which have been obtained
through an internet survey carried out on behalf of Bakkavör foods.
The analysis of the survey results and an interview with the Commercial Director,
are then overlaid with the outcome of the UK grocery retail findings will be used to provide
the backdrop for the implications and decisions that are to be made by FCP to ensure
sustainable business security and the continued competitive advantage over the supply base
from which it operates within.
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