Greggs: The Strategic Issues Analysis

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Table of Contents

Introduction
Strategic Issue Diagnosis
External Analysis
Internal Analysis
Conclusion
Works Cited

Introduction

Greggs is a popular business in the United Kingdom since it provides customers with high-quality food. The business has a rich history explaining how the company overcame various challenges. The current environment also offers many issues that should be properly managed. That is why the given report assesses strategic issues of Greggs and focuses on the internal and external conditions that determine how the organization develops.

Strategic Issue Diagnosis

Business Issues

The given company represents the UK food-on-the-go industry, and it is reasonable to consider its life cycle. The field has a vast history and was experiencing a dramatic increase pre-pandemic. For example, the UK market was worth £18.9 billion in 2019, but the crisis led to its estimated value of £15.6 billion in 2021 (Heath par. 2). That is why the industry is currently facing an economic downturn resulting in financial losses for individual businesses.

The life cycle of the selected organization also deserves attention. The company emerged 80 years ago when John Gregg started delivering fresh eggs and yeast by pushbike (Greggs, “Our History” par. 1). The first shop was opened ten years later, and it gave rise to a large system, including almost 2,000 stores today (Greggs, “Our History” par. 4). Throughout its history, Greggs attempted to satisfy customers’ needs and expectations, which explains the development of a vegetarian menu, free Wi-Fi, and so on (Greggs, “Our History” par. 2-3). This information demonstrates that the organization is ready to make strategic decisions to promote growth.

Cultural Issues

The cultural web is a helpful tool that relies on numerous elements to assess Greggs culture. Firstly, the Stories component reveals that the organization positions itself as a major employer and a provider of healthy food, while ordinary citizens appreciate it. Secondly, Greggs relies on many symbols to establish and distribute its cultural values. In particular, the company uses unique stores interior and exterior design, customized packages, and specific gift cards. The organization invests in marketing, meaning that Greggs advertisements appear at cars and on streets. Thirdly, routines and rituals represent the accepted norms and practices governing the workforce. The company has regular meetings for the board of directors, while rituals are developed for ordinary employees (Greggs, “People” par. 3-8). For instance, the business provides individual workers with a rewarding system, training and growth opportunities, and an equal environment.

Fourthly, the organization relies on a specific control system to ensure that employees correctly perform their duties. Greggs provides its workers with competitive salaries and shares a part of the overall profits with them (“People” par. 5). Fifthly, the company’s power structure is represented by the board of directors, including eight highly skilled and experienced professionals. Finally, the business’s organizational structure consists of a few departments, each of which is responsible for a particular business area. This information concludes that Greggs is an example of task culture. The rationale behind this statement is that the organization is divided into departments, i.e., teams, and each of them is expected to solve issues within its responsibility area. All the teams and their members join their efforts to contribute to the business development.

Political/Governance Issues

Greggs has two groups of stakeholders, including internal and external ones. Internal stakeholders are employees and executives, while customers and suppliers represent outside ones. A mapping activity allows for identifying the meaning of these groups and how the business should address them. Executives have high interest and power, meaning that they should receive the most attention. Suppliers have low interest and power, and the company should monitor them. Low interest and high power characterize customers, and Greggs should keep them satisfied. Finally, employees feature high interest and low power, denoting that the organization should keep them informed.

A principal-agent issue emerges when it is necessary to hire new employees. Since managers cannot have exhaustive information about candidates’ performance, their hiring involves risks that can affect the entire organization. The organization tries to minimize these hazards and ensure all the employees effectively engage in performing their obligations. Competitive salaries and additional bonuses serve as an effective motivation for workers.

In addition to that, Greggs draws significant attention to corporate social responsibility. In 2021, it announced “The Greggs Pledge,” highlighting the objectives and positive changes that the business wants to achieve. In particular, the company advocates for stronger and healthier communities, promises to establish a carbon-neutral and zero-waste business, promotes diversity, and establishes sustainable operations (Greggs, “The Greggs Pledge” 4). These goals demonstrate that the organization understands its social responsibility and does its best to improve the world.

External Analysis

Macro Level Issues

The PEST analysis is helpful since it can reveal what specific political, economic, social, and technological forces affect the business. Firstly, the UK government is serious about food safety, meaning that Greggs should satisfy such standards to operate within this environment. Secondly, economic conditions significantly deteriorated when the COVID-19 pandemic shocked the world. The organization lost a significant part of its revenues and is currently struggling to reach pre-crisis levels. Thirdly, social forces are positive for Greggs because the organization has high brand awareness, and customers positively assess it. Fourthly, the company benefits from technological achievements because free Wi-Fi and online marketing tools attract more customers. Macro-level scenarios imply that the organization should use its internal and external strengths to mitigate adverse impacts of political and economic issues.

Market and Industry Analysis

Greggs relates to the strategic group of fast-food restaurants, meaning that the business should prioritize specific values. For instance, they are timely service, an efficient supply chain, and a professional workforce. Greggs offers products for the middle class, including representatives of all races, genders, and ethnicities. Simultaneously, the Five Forces analysis demonstrates that the organization’s position in the industry is challenging. The threat of new entrants is not high, but Greggs still has to invest in innovation and growth to have an advantage over new players. The bargaining power of suppliers is medium, and the organization should diversify its supply chain and cooperate with multiple partners to mitigate risks. Buyers have a significant force in the market, and Greggs should continue increasing its customer base to protect long-term development. The threat of substitutes is rather high, and the company should offer high-quality services and products to address it. Finally, Greggs should differentiate its brand to compete with numerous rivals.

Environment-Organization Fit

The selected company does its best to ensure that it positively affects the environment. Greggs scans for its impact on nature and develops specific goals to minimize this harm. In particular, the business announced that it would use less packaging, reduce carbon emissions, and decrease the amount of waste (Greggs, “The Greggs Pledge” 4). However, the company does not mention that it relied on Big Data and analytics to address the issues.

Internal Analysis

SBU Analysis

The organization consists of a few strategic business units, and thye join their efforts to create a value chain. In particular, there are three committees, including the audit, remuneration, and nominations ones (Greggs, “Board Committees”). Simultaneously, the Chief Executive Officer presides over the operating board with its responsibilities. The given value system implies that these bodies are responsible for different activities that are performed to ensure that Greggs can adequately offer service and products to customers.

Organizational Architecture

The previous section has already commented on what committees are involved in Greggs management. However, it is now reasonable to comment on what relationships exist among individual bodies. Horizontal links have occurred among the committees that are subordinate to the board of directors (see fig. 1). The synergy among all these establishments results in the fact that the business has a rather effective and clear organizational architecture.

Financial Resources

Financial analysis of the business reveals mixed results that deserve attention. On the one hand, the company’s financial report demonstrates that the 2021 total sales increased to £1,229.7 million from £811.3 million in 2020 (Greggs, “Annual Reports” 1). However, the price-to-earnings ratio is 20.82, which is significantly lower compared to the average industry value (Investing.com). These findings reveal that both positive and negative features can be found.

Integrative Internal Analysis

Greggs has a few generic strengths that allow it to withstand the crisis. Drawing attention to workforce training and development is one of them. Since the company has a skillful workforce, it can easily overcome different challenges. In addition to that, this characteristic feature provides the organization with numerous capabilities to develop and grow. Consequently, Greggs should invest more resources to attract and retain experienced employees.

Conclusion

The report has presented an analysis of Greggs as well as its external and internal environments. The COVID-19 pandemic brought many challenges, and the company was forced to deal with versatile consequences. However, the findings reveal that the organization has sufficient resources to mitigate the challenges. In particular, social and technological conditions, as well as an experienced workforce, provide Greggs with effective resources to keep developing.

Works Cited

Greggs. “Annual Reports and Accounts 2021.” Web.

“Board Committees.” Web.

“Our History.” Web.

“People.” Web.

“The Greggs Pledge.” Web.

Heath, Kim. “Will the UK Food-To-Go Market Get Back to Growth Post Pandemic?” AHDB, 2022.

Investing.com. “Greggs PLC.” 2022.

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