Netto Case study.

1.0 Introduction

1.1Terms of reference

This report is the result of analysing the Netto case study. The report identifies the key points that have helped Netto become a successful discounter store, the environmental analysis and problems that it may face in the future and how to maintain its competitive advantage.

2.0 SWOT analysis

2.1.1 Strength

§Netto has become a increasingly visible & recognisable high street name

§Netto has a range of products that covers 90% of the daily needs of customers

§Netto consolidated its position in Denmark, now looking at possibility of exporting the concept, in Germany and UK

§Penetrating 4 different markets successfully

§Established since 1981

§Good market knowledge

§Very focused company objectives e.g. just concentrating on being LRD and not supermarkets

§Price competitive products

§Good USP (special offers, concessions)

§Discount market leader in Denmark

§Good layout of shop (atmospherics), no nonsense quick access to products for customers

§Multi-tasked staff and good training and development team

§They have a flexible marketing strategy, pricing etc is determined by the market / industry

§Netto promotes quick access to the merchandise

Maintains a competitive retail price at a low profit margin

2.1.2 Weakness

§People are sceptical about products which are cheap and therefore not associate them with quality (in UK market)

§Poor communications mix

§Brand name not as good as rivals

2.1.3 Opportunities

§To increase number of concessions in Netto stores by improving selling space

§Extend range of the retailer

§Improve store traffic

§Extending their range of offered services by diversifying into areas previously untapped by retailers e.g. retail banking, new retail formats.

§A challenge for Netto will be if they can get 'low price equals cheap' to 'low price equals value' to attract operate number of higher spending customers from social groups A and B

§To maximise its products offer and...