Health and safety is another important external factor for Waitrose. An example of the company’s policy was to support the farmers in South Africa by providing health and educational facilities. This resulted in a positive impact on Waitrose and the farmers since developed trust.
4.0 Porter’s five forces
This model has been applied in the following passages:
4.1 Threats of substitutes
Waitrose has substitutes for its products but it has an edge over their competitors because of product quality and brand name. The targeted customers are the elite and they trust the supermarket such that even if they find the same goods cheaper in other stores, they still prefer Waitrose. (Environmental fit analysis, …show more content…
Waitrose holds approximately 4% of the retail market, relatively smaller than its competitors, but has a strong hold over its consumers. The growing demand in the market narrows down the competition between the firms. However due to quality of products offered by Waitrose there is an increase in the demand for its products. Waitrose is the final target for the buyers for fruits, vegetables and organic foods, thus it has a competitive advantage over other established firms. (Waitrose stores and its management decisions, 2003)
Waitrose mostly depends on outsourcing of its products, as such if one season is not good enough, then it results in positive influence to other firms.
Many firms such as Tesco, Sainsbury have their own brands at premium prices. This may be a threat to Waitrose own brands. However Waitrose is in the lead in this aspect because their products have efficient provenance and traceability records. (Waitrose analysis, 2009)
High fixed costs are among major constrains and Waitrose being a large company requires higher cost in outsourcing products and maintenance of their farms. This is a potential threat and may in turn affect the profit margins of the