Greggs is a UK-based bakery chain and is the largest in the nation. The bakery specializes in various savory products such as sausage rolls, cakes, doughnuts, sandwiches, and so on. It was found in 1939 by John Gregg and has its headquarters in North Tyneside. The bakery has more than 2000 outlets across the United Kingdom (Greggs, 2019). Over the years, the company has acquired various competitors to increase its market share and reduce the competition it faces in the country. In 2018, the company generated revenue of 1.0293 billion Pounds and had more than 22000 employees (Greggs-2, 2019). The company has both franchised and self-operated outlets. Greggs has an extensive expansion plan in place where it intends to open hundreds of more stores across the nation.
Following are the four dimensions of the Ansoff Matrix for Greggs:
Market Penetration
A company focuses on market penetration when it promotes its existing products in its existing markets. Greggs does this in numerous ways. The first strategy that Greggs follows is to acquire competitors to increase its market share and reduce competition it faces. This helps drive out competitors as well. The acquisition of Bakers Oven led to Greggs becoming the largest bakery chain in the nation. The company also motivates its existing customers to increase the consumption of its items by highlighting the benefits they have and the taste the bakery has to offer. It also offers various augmented discounts during holidays and other times to increase sales. Over time, various products are also improved such offering sugar-free variants and reducing the sugar content in them while maintaining their taste. Greggs also has strategic alliances with other companies to help increase the number of its outlets at specific locations (Greggs-2, 2019). All of these market penetration strategies help increase sales and earn greater profits.
Market Development
Market development is the promotion of existing products in new markets. The prime strategy of Greggs is to open new stores in areas where it currently does not have any stores to attract the local market segment. Greggs currently does not operate outside of the UK. It has the potential and can expand geographically into other nations and further promote its brand. It also offers various product variants of existing products to attract certain market segments. For example, it introduced sugar-free items to attract the market segment that suffers from diabetes or is conscious of their health. It also offers its products in different sizes to create new market segments. In each case, the company is able to increase its market share and enhance its dominance in the market.
Product Development
This strategy requires an organization to introduce new products in its existing markets. For Greggs, the best product development strategy is to launch new bakery items. This can be in terms of exclusively new products or new flavors of existing products. For example, new flavors of doughnuts or a new type of sandwich are both product development strategies. The existing products are also improved through quality improvement, making them healthier, and so on. For each new product, the company does a detailed marketing analysis to determine the customer requirements and the flavors they desire. The customer feedback helps drive the research and development efforts of the bakery to develop new products. Each new product is then aggressively marketed to develop awareness amongst consumers. In certain cases, new products may be distributed amongst customers at an outlet to get instant feedback. For new products, their presentation also plays a vital role for customers to focus on them. Greggs also works on this.
Diversification
This is the riskiest strategy and takes place when new products are launched in new markets. Greggs does this by opening new stores and launching new products in them. It can also vertically diversify by establishing its flour processing units, poultry farms for eggs and chicken, and so on. It can also diversify into various related industries such as restaurants, coffee chains, hospitality, and so on. Another diversification option for the company is to use the brand name and diversify into unrelated industries such as fast-moving consumer goods, processed food, cereal, and so on. The successful brand name can help. However, these strategies hold risks and will have a financial impact on the company.
References
Greggs, 2019. THIRD QUARTER TRADING UPDATE. [Online] Available at: https://corporate.greggs.co.uk/sites/default/files/Greggs%20-%20Trading%2001.10.19%20Final.pdf [Accessed 10 Jan. 2020].
Greggs-2, 2019. PRELIMINARY RESULTS FOR THE 52 WEEKS ENDED 29 DECEMBER 2018. [Online] Available at: https://corporate.greggs.co.uk/sites/default/files/190307%20-%20Greggs%20-%202018%20Preliminary%20Results%20.pdf [Accessed 10 Jan. 2020].