Title: International Dimensions of Marketing

Code:7052SMM
1.0 Introduction
The global market is increasingly competitive, and many companies are looking to expand their
reach beyond their domestic boundaries. One such company that has chosen Germany as a target
for its global expansion is the UK-based Greggs. Greggs, a well-known bakery brand, offers a
variety of goods such pasties, cakes, and sandwiches, and they have already begun to gain
ground in Germany. The cultural and economic distinctions between the UK and Germany must
be taken into account in order to comprehend the global aspects of marketing as they relate to
Greggs. With a population of over 82 million, Germany is a sizable and diversified nation. Its
economy is well developed, and the hospitality sector is tightly regulated. As a result, Greggs
needs to be aware of any potential cultural and legal barriers to conducting business in Germany.
Also, recognizing local consumer preferences is necessary for the global market. In order to
make their products appealing to local consumers, Greggs must be aware of the popularity of
traditional bakery-style goods in Germany, such as breads, rolls, and pastries. When marketing to
a foreign audience, a number of other aspects, such as language, communication techniques, and
promotional tactics, must also be taken into account. In order for Greggs to be successful in their
international expansion into Germany, they must be aware of the conditions and cultural norms
of the country and have a sound marketing plan in place. Therefore, this article will examine the
global aspects of marketing as they apply to Greggs' entry into Germany and its offerings. Also,
it will examine the various marketing considerations that must be made when breaking into a
new international market and how Greggs may make the most of them.

2.0 Overview of Greggs and Products

John Gregg established the well-known British bakery Greggs in Newcastle upon Tyne, England,
in 1951.The business is well known for its extensive selection of premium goods, which range
from sandwiches, pastries, and cakes to hot and cold beverages, snacks, and desserts. It presently
operates more than 2000 outlets in the UK and Ireland and is aiming to grow in other countries,
especially Germany. Greggs has a large selection of breakfast items, sandwiches, salads, cakes,
pastries, and snacks to choose from. Moreover, Greggs offers a variety of hot and cold
beverages, such as tea, coffee, and soft drinks. In terms of marketing, Greggs has a significant
following on social media sites and has put ad campaigns into place to attract prospective
customers.
Greggs has a large selection of breakfast products, sandwiches, salads, cakes, pastries, and
snacks to choose from. Moreover, Greggs offers a variety of hot and cold beverages, such as tea,
coffee, and soft drinks.

In terms of marketing, Greggs has a significant following on social media sites and has put ad
campaigns into place to attract prospective customers. Germany is a key target market for
Greggs because of its excellent location in the center of Europe. Due to the country's expanding
population and rising tourist industry, bakery items are in great demand on the market. The
German market is also very competitive, with several domestic and foreign bakeries vying for
consumers' attention. Greggs is ideally suited for entering foreign markets, especially Germany.
Greggs is well-positioned to develop a footing in the German market thanks to its well-
established presence in the UK and Ireland and its extensive selection of high-quality products.
The German market is also very competitive, giving Greggs a chance to distinguish out and
increase market share.
2.1 History of Greggs
Since 1939, Greggs, a renowned British bakery business, has been a mainstay of the UK market.
It is the biggest chain of bakeries in the UK and offers a wide variety of goods, including sweet
sweets, coffee, and savory pastries and sandwiches. With Germany as one of its main target
nations, Greggs has recently sought to increase its footprint abroad. Greggs has had to address a
variety of international marketing factors in order to be successful on the global market. First and
foremost, Greggs had to learn about the German market and its clientele. This has required
conducting market research to determine which goods and tastes the German consumer base is
most likely to favor. Also, Greggs has to decide where in Germany to set up shop and make sure
that the goods and services it provides are catered to the demands of the regional market.

Also, Greggs had to make sure that the German market could be reached via its supply chain and
distribution networks. In order to make sure that the company's products are accessible in the
appropriate regions, this has necessitated collaborating with regional distributors and logistical
service providers. In addition, Greggs had to think about the advertising and promotion activities
that would be most effective in reaching German consumers. In order to successfully enter the
German market, Greggs has used a variety of global marketing strategies. Greggs has been able
to reach a new audience by comprehending the regional market and addressing the logistical and
marketing issues.

2.2 Products Offered

The well-known British bakery Greggs has decided to focus its worldwide growth on Germany.
As a result, it's critical to comprehend the global marketing implications of the goods that Greggs
sells in Germany. Greggs' worldwide marketing plan in Germany needs to be customized for the
regional market. This includes customizing the product to the preferences of German consumers.
For instance, Greggs may provide a selection of German-style breads and pastries. In addition,
German consumers' preferences should be taken into consideration when designing the
packaging and branding. Another crucial element of global marketing is price. To make their
products competitively priced in the German market, Greggs must take into account the various
costs of local ingredients and labor.

A promotion and advertising strategy for Germany should be part of the marketing plan. Online
marketing, print ads, and in-store promotions are a few examples of this. Furthermore, but not
least, marketing for any business that operates in a foreign market must include after-sales
service. A customer care department ought to be established by the business to help with any
potential issues. Greggs could also incorporate client feedback to enhance the goods and services
provided in Germany. Further, Greggs' worldwide marketing plan for Germany must incorporate
all of the various facets of global marketing. This covers product customization, pricing,
advertising and promotion, and post-purchase support. Greggs can then make sure that their
goods are a success in Germany by doing this.

2.3 Marketing in Germany

A British bakery firm called Greggs recently made the decision to open an office in Germany.
Any successful company must have an international marketing strategy, and Greggs is no
exception. Understanding the cultural quirks and preferences of the target country is essential for
marketing success abroad. The classic baked goods that Greggs is known for in the UK,
including as pastries and sandwiches, will be its main focus in Germany. Also, they will launch a
few fresh goods onto the German market, like artisanal pretzels and breads. Greggs will need to
adjust its marketing plan for the German market in order to successfully market these goods.
This might entail using digital marketing strategies, culturally appropriate advertising campaigns,
and product packaging adaptation. When selling their products in Germany, Greggs will also
need to take German laws and regulations into account. This involves being aware of the German
standards for food product labeling and making sure that all internet advertising complies with
those standards. Also, because German is the official language, Greggs will need to take into
account the language requirements for marketing in Germany. When focusing on Germany,
Greggs will also need to take the global aspects of marketing into account. This entails
customizing their marketing strategies to the German culture, as well as modifying their product
offers to the German market and local laws and regulations. By doing this, Greggs can guarantee
the success of their company in Germany.

3.0 Analysis of Macro and Micro Factors

Today, macro and micro elements play a critical influence in the success of a company's
international expansion, making the international components of marketing much more complex.
This essay will examine the large- and small-scale variables influencing Greggs, a British bakery
and retailer of food-on-the-go, in its efforts to enter the German market. It will emphasize how
these elements affect Greggs' present business strategy and how the company must change in
order to succeed in Germany. A well-known British bakery called Greggs specializes in quick-
to-eat foods including sandwiches and pasties. It has operated in the UK for more than 80 years
and recently made the decision to enter the German market. The numerous macro and micro
aspects that Greggs must take into account in order to succeed in the German market will be
covered in this essay. In order for Greggs' expansion to be successful, it will be examined how
these factors affect the company's current strategies and how to adapt.

3.1 Analysis of PESTEL Factors

3.10 Political Factors
A British company named Greggs is attempting to grow its clientele in Germany. The PESTEL
examination of Greggs' ambitions for international expansion gives political considerations a
significant amount of weight. Germany is a stable nation with a robust economy, which
favorably impacts the environment for international investment. The nation also provides a
helpful legal and regulatory framework and adheres to a consistent, open policy with regard to
international investment. Greggs will profit from the free trade agreement between the EU and
other nations because Germany has strong ties to the European Union and is a part of the
Eurozone. The cost of doing business in Germany can be dramatically decreased as a result. But
Greggs must also take into account the linguistic and cultural barriers that may exist between the
UK and Germany when trying to join that market. Yet, Greggs should be able to benefit from
Germany's political stability and economic expansion in order to build their company.

3.11 Economic Factors

Germany is one of the nation Greggs has targeted for expansion. Greggs is a firm that has been
growing internationally. The Economic Elements in PESTEL Analysis.The GDP per capita,
exchange rates, inflation, interest rates, and unemployment are all variables that could have an
impact on Greggs in Germany. Germany has a high GDP per capita, which means that
consumers have more money available to spend on Greggs' products. Also, because of the
relatively steady currency rate between Germany and the UK, Greggs can simply transfer its
German profits into British pounds. Germany is a desirable market for Greggs to develop into
because of its low inflation rate. Because of Germany's low interest rates, Greggs can borrow
money for expansion there more affordably than in other nations. Furthermore, Greggs has
access to a huge pool of candidates in Germany thanks to the low unemployment rate there.
Overall, Germany is a desirable market for Greggs to develop into due to the economic reasons
in the Analysis of PESTEL Components. Germany is a great place for Greggs to grow due to its
high GDP per capita, steady exchange rate, low inflation, low lending rates, and low
unemployment.

3.12 Social Factors

One of the most well-known bakeries in the UK, Greggs, is planning to expand to Germany in
the near future. It is crucial to take into account the social aspects of the German market when
determining whether or not this decision is feasible. With a median age of 45.2, Germany's
population is quite youthful, indicating a sizable potential market for Greggs. Also, it has a
generally educated and wealthy populace, making it a lucrative target market for Greggs' goods.
In addition, Germany is a highly urbanized nation with a number of sizable cities where Greggs
may open stores. Germans are known to adore baked goods and pastries, which could be
advantageous to Greggs' growth from a cultural standpoint. Also, Greggs may choose to
concentrate on family-oriented product lines to capitalize on the strong family values of the
German population. General, Germany's sociological characteristics provide a favorable
environment for Greggs to enter, indicating that it might be an effective location for global
expansion. Greggs might succeed in Germany with the correct marketing approach and product
line.

3.13 Technological Factors

A UK-based business of bakeries called Greggs has recently focused on expanding to Germany.
While examining the PESTEL variables as part of this procedure, it's crucial to take the target
country's technological factors into account. Germany is a technologically savvy nation with one
of the best digital infrastructures in the world. As a result, Greggs may employ digital marketing
and advertising channels to successfully reach its target demographic in Germany. Additionally,
Greggs is able to efficiently distribute its products to customers because to Germany's highly
established logistical system. Due to the high level of digital literacy in Germany, Greggs may
use a variety of technology-based platforms to interact with customers and foster client loyalty.
Furthermore, Greggs may quickly open up an online store and begin selling its products to
German customers because to the several e-commerce platforms that are available in Germany.
Overall, Greggs has a fantastic opportunity to successfully grow its business in Germany due to
the country's technological features. Greggs may successfully expand its business and reach a
huge number of potential clients in Germany by utilizing digital marketing, e-commerce, and
logistics.

3.14 Environmental Factors

The bakery company Greggs is situated in the UK and makes a variety of baked goods, such as
breads, cakes, pastries, and sandwiches. The corporation has selected Germany as their target
market for expanding their operations worldwide. Understanding Germany's environment in
order to identify the potential benefits and risks of global expansion requires doing a PESTEL
analysis. Germany's stable administration and strong commitment to the European Union make
the political situation there ideal for Greggs. Due to its large GDP and robust customer base, the
economic environment is very favorable. Given that Germany has a diverse population with a
range of tastes and preferences, the social environment is an important issue to take into account.
As a technologically advanced and connected nation, the climate is also favorable for Greggs'
international growth. Due to Germany's strong environmental protection laws, the environment is
a key cause for concern. Last but not least, Greggs will benefit from a supportive regulatory
environment and a robust legal system in the nation. Generally, Greggs finds the German market
to be appealing because of its favorable PESTEL characteristics. The business may take
advantage of the prospects on offer in this sector while reducing the risks. Greggs can
successfully grow their company by entering Germany and other markets with the correct
strategies.

4.0 Analysis of Market and Competition

4.10 Market Size and Growth, Market Structure, Target Market and Competition
A UK company selling meals on the go called Greggs has been considering growth in Germany.
An examination of the German market is necessary to determine the likelihood of success. The
83 million individuals who make up Germany's population represent a sizable potential client
base, and the country's food-on-the-go industry is expanding quickly. The market structure is
defined by a mix of numerous smaller, independent businesses and a few large companies.
Greggs products might be a good fit for the market for quick, affordable snacks, giving them a
chance to fill a void. Young, tech-savvy, urban consumers are most likely to be Greggs' target
market in Germany since they are most likely to be interested in the convenience and
affordability of Greggs products. Greggs will probably encounter fierce competition from
already-established competitors in the food-on-the-go market. But, Greggs might be able to set
themselves apart because to its distinctive product lineup and dedication to sustainability.

5.0 Consumer Profile

Greggs, a well-known bakery business with headquarters in the UK, has chosen Germany as a
major area for global expansion. Understanding the customer profile of this market is crucial in
order to properly target German consumers. According to demographic data, the majority of the
population of Germany is made up of individuals between the ages of 25 and 54, many of whom
are in the middle to upper income echelons. Psychologically, many Germans are concerned with
their health and are more prone to buy upscale goods. Germans tend to favor convenience, as
shown by their high demand for takeout and delivery services, which is indicative of their
behavioral preferences. Greggs, a well-known bakery business with headquarters in the UK, has
chosen Germany as a major area for global expansion. Understanding the customer profile of this
market is crucial in order to properly target German consumers. According to demographic data,
the majority of the population of Germany is made up of individuals between the ages of 25 and
54, many of whom are in the middle to upper income echelons. Psychologically, many Germans
are concerned with their health and are more prone to buy upscale goods. Germans tend to favor
convenience, as shown by their high demand for takeout and delivery services, which is
indicative of their behavioral preferences.

6.0 Market Entry Strategy

Greggs wants to increase its market share in Germany, a nation with a sizable and diverse
population. The business should have a thorough market entry plan to assure success in this
endeavor. This plan should carefully take into account the cultural, legal, and economic aspects
of the German market. To find the best position for the brand, the organization needs also assess
the competition landscape. Ultimately, in order to reach potential customers, the business should
combine traditional and digital marketing tactics. Greggs will be in a good position to succeed in
the German market if it takes the time to create a strategic market entry plan.

6.1 Market Entry Strategy Journal

Gregg’s plc Essay
Topics: EconomyFranceMarketingResearchTrade
1. 0 Executive Summary

Greggs plc intend to spread out their operations into international markets in order to fulfill their
overruling aim: ‘to be Europe’s No. 1 Bakery’ .

Germany has been selected as the host state and justification for this determination has been
discussed.

Furthermore. Greggs will come in the German Bakery market through the employment of a
‘Foreign Direct Investment’ method. more specifically a ‘Sales and Production Subsidiary’ .

This study outlines the blend of marketing mix constituents used to place the offering ; the
execution method adopted to guarantee effectual merchandise and service bringing ; and the
control mechanisms utilized to do certain that aims are achieved.

2. 0 Introduction

Greggs is the presently the taking UK retail merchant in the bakeshop market holding
experienced high degrees of growing in 2002. The company achieved grosss of ?422. 6 million.
an addition of 11. 9 % on the old financial. Its operating net income besides witnessed an
addition of 11. 8 % to ?35. 3 million in 2002. Their popularity has quickly increased as
consumers are seeking quick. convenient and indulgent nutrients to complement their fast-paced
life styles.

Greggs is actively spread outing their operations and have over 1. 200 retail mercantile
establishments under the Greggs and Bakers Oven trade names. They entered into the
international sphere in 2003 with the gap of two mercantile establishments in Belgium. This
scheme was pursued in order to carry through the company’s long-run aim of going a leader in
the European market topographic point.

Further international enlargement will therefore fulfill their current aims and heighten their
presence in the European bakeshop market.

2. 1 Report Aims
To warrant market pick

To set about internal and environmental analysis for the place and host state

To place the most appropriate foreign entry scheme

To orient a services selling mix to demands of the host market

To propose methods of execution to let successful market incursion

To supervise the advancement of this venture through the employment of control mechanisms

3. 0 Mission statement

“We intend to be Europe’s finest bakery-related retail merchant. accomplishing our ambitious
growing marks by achieving world-class criterions in everything we do. Our intent is the
growing and development of a thriving concern for the benefit and enjoyment of employees.
clients and stockholders likewise.

3. 1 Valuess

Greggs is a customer-focused concern. seeking to supply first-class merchandises and services

that deliver enjoyment and value-for-money. We are committed to people development. within a
considerate civilization that combines liberty and answerability and maintains a strong focal
point on profitableness. In all our activities. we aim to accomplish excellence through
uninterrupted improvement” .

4. 0 – Market Choice

Cannon and Willis propose a method of “simple riddance ” to place a possible host market. This
method of market pick ensures that the staying state satisfies all chief standards highlighted by
the administration. The diagram below shows a systematic attack to happening a suited market
for Gregg’s enlargement. Industrial. economic and cultural factors will be integrated into the
choice procedure as these are cardinal to Greggs’ operations in add-on to their chief purpose: ‘To
be the no. 1 bakeshop retail merchant in Europe. ’

Parallel to their aims. all non-EU states will be excluded from the choice procedure. Greggs’ 2nd
precedence is to enter markets which display fast growing in bakeshop markets. The states with
the highest degrees of class growing are shown below:

Figure A

Country Cakes and Pastries Market – % Category Growth 1995 – 1999

Portugal 4. 60 %
Germany 3. 70 %

France 3. 60 %

Spain 1. 80 %

Denmark 1. 80 %

Using this tabular array. Greggs may extinguish Denmark and Spain from their market pick
choice procedure.

Psychological distance between the place and host state can besides find the success of
international activities and therefore have been incorporated into the procedure.

The Gallic have a broad choice of elaborate. exquisite and epicure dishes. This contradicts the
typical merchandise proposition offered by Greggs. Although Greggs could see a focussed
distinction scheme aiming niche markets. the copiousness of specialist bakeshop retail merchants
would suggestively do the Gallic bakeshop market hard to perforate efficaciously and hence
exclude it from farther examination.

Lusitanian market tendencies highlight an increasing demand for “wholesome. household

merchandises “ .

In contrast to the latter. Greggs offer an ‘on the move’ nutrient proposition which is typically
consumed separately instead than in a household environment. Suggestively the Portuguese are
loath to encompass new nutrient offerings as research illustrates a strong penchant for traditional
culinary art served in traditional eating house scenes. Furthermore the market is dominated by
both high street retail merchants such as Podaria Popular and industrial makers therefore
connoting high barriers to entry are high.

Having adopted this procedure of riddance. Germany appears to be the predominating market
pick.

Despite the high labor costs. long holiday clip and decelerate economic growing. Germany’s
overall economic public presentation is the 3rd largest in Europe and accordingly presents itself
as an attractive market pick for Greggs.

“Products with a convenience character are go oning to turn out popular in the German bakeshop
market. runing from ready to eat and impulse merchandises to in shop bakeshop merchandises “ .
Furthermore. “across the bakeshop market. international bakeshop fortes such as crescent rolls.
ciabattas and baguettes are lifting in popularity. a contemplation of higher consumer demand for
more non-traditional or fresh merchandises “ . This market therefore presents itself as an ideal
location for Greggs to spread out their international operations. Greggs will prosecute a
‘concentration’ technique with respect to state and client mark group. “A company may
concentrate its attempts by come ining states that are extremely similar in footings of market
features and substructure to the domestic market “ . This will enable Greggs to understate hazard
and benefit from cultural tantrum. Furthermore. as in the UK they will concentrate attempts on a
focussed mark audience.

5. 0 – Internal and Environmental Analysis

5. 1 – Internal Analysis

5. 1. 1 Strengths

Internal strengths need to be assessed to place assets. capablenesss and nucleus competences that
are movable to the host state.

Greggs is a good recognized bakeshop retailing trade name in the UK which aims to “create a
individual and cohesive Greggs trade name countrywide “ . This is being executed utilizing a
coherent and consistent publicity of the company’s proposition and trade name across the state.

Greggs have sustained a strong hard currency flow which allows them to put money in keeping
in their retail mercantile establishments. bakeshops and trade name. Key investings include
important financess spent on production installations to back up the growing of retail operations.

Greggs actively seek to place their shops in outstanding locations relative to distribution
channels and client entree. Greggs shops are typically located in busy and to a great extent
populated towns where their fast and convenient proposition is ideal. In response to the 6. 4 %
addition in demand for takeaway nutrients. Greggs is accommodating their servicescape to
provide for these turning demands.

5. 1. 2 Corporate Culture

Greggs operates in a hazard taking corporate civilization which allows them to be advanced and
antiphonal to market alterations. They believe in supplying high client service taking to retain
clients by bring oning trueness and trust. They place great accent on motivation and authorising
employees as they believe that continued growing of the concern is a contemplation of the work
force. These competences are movable and of equal value to the German market place.

Greggs are actively spread outing their operations internationally in order to distribute hazard.
increase international trade name consciousness of their merchandise portfolio and exploit fast
turning new markets.

5. 1. 3 Value Chain

Greggs UK have produced a ‘Value Chain Analysis’ which is “an analytical tool that describes
all activities that make up the economic public presentation and capablenesss of the house. ” This
can be used by Greggs to exhibit nucleus competencies that can be exploited in the host market.

5. 2 – Environmental Analysis
The environmental analysis purposes to place the current state of affairs of the German bakeshop
market utilizing relevant tools of analysis and international research methods. A Plague analysis
has been used to place influential factors for Greggs in Germany as discussed.

5. 2. 1 International Marketing Research

“Marketing research refers to garnering. analyzing and showing information “ .

It is the deficiency of cognition on foreign markets that is one of the major barriers an
international selling director must get the better of. It is hence imperative that Greggs formulate
an effectual market research scheme as the first measure in get the better ofing this barrier. In
this instance. international selling research was carried out for the intent of cut downing possible
hazard and supplying us with a concluding systematic and nonsubjective attack for our
proposition.

Primary research has non been undertaken due to the restrictions of this study. However. if
Greggs were to implement this internationalization proposal. primary research would be an
imperative tool when sing market pick. These could include qualitative methods such as
interviews and observation. Secondary signifiers of research carried out have included
Government studies. Internet beginnings and text edition literature. and farther strengthened by
journal articles. This assortment of informations aggregation methods helps to supply a rich
analysis from legion beginnings as a foundation for decision-making.

From this research the undermentioned factors have been taken into consideration when sing
Germany.

5. 2. 2 Social & A ; Economic Environment

Social factors. as outlined in the PEST analysis outline the increasing tendency towards ‘on the
go’ ingestion. This reflects the busy life style of the working population in Berlin hence the pick
of location. The economic factor of high disposable income besides provides an attractive ground
for Germany as consumer disbursement is high.

5. 2. 3 Prospective Country Culture

Greggs may utilize the Hofstede theoretical account to “identify persuasive cardinal differences
of national civilizations ” and thereby measure their cultural tantrum. “According to Hofstede.
the manner people in different states perceive and interpret their universe varies along four
dimensions: power distance. uncertainness turning away. individuality and maleness. ”

The German civilization is a low context and explicit. possibly of all time more so than the
British. Furthermore. “the German national outlook is of a comparatively high degree of
uncertainness turning away. The Germans do non like a sense of insecurity which makes them
experience uneasy in concern. ( Germans work with ) difficult facts. and sound statements “ .
There are hence little cultural differences that the UK direction squad will hold to see upon come
ining the German market.
5. 2. 4 Market Competition

Competition in the German market is a cardinal variable of Greggs’ success.

Figure B- Competitor Analysis

Germany bars and pastries market portion ( % value ) by company

It is hence of import to place. analyse and proctor competitory motion. Figure B illustrates the
possible competition in the German bakeshop market in conformity to market portion

5. 2. 5 Geographic Climate

Greggs’ gross revenues are affected merely by climatic extremes – really hot conditions can
deject demand for bakeshop merchandises. and drawn-out rain or snow can do people reluctant
to travel out and do their usual day-to-day purchases. This form is mirrored in Germany and
hence fluctuations in gross revenues must be accounted for.

5. 2. 6 The German Market

The usage of the Porters 5 Forces theoretical account has recognized the attraction of the German
bakeshop market through the designation of barriers to entry and possible replacements.

6. 0 – International Marketing Aims

In visible radiation of the administrations resources and competences. the following aims have
been established:

6. 1 Short Term Aims

Utilise promotional mechanisms to promote test and to animate client trueness to the trade name

By carry throughing this aim. Greggs will be working toward procuring a loyal client base
thereby supporting themselves. to a big extent. from rivals.

Conduct quarterly pricing reappraisals to guarantee that monetary values remain competitory
with challengers

By guaranting competitory monetary values. Greggs’ reinforce their committedness to offering

‘value for money’ as highlighted in their mission statement.

To guarantee all employees receive high criterions of preparation that is reflected in high quality
service to the consumer
Greggs corporate scheme highlights the importance of a merriment and supportive working
environment. They promote themselves as being a “great topographic point to work ” and
promote personal development. This in bend reflects on their high quality service offered to the
terminal consumer.

6. 2 Long Term Aims

To continually supervise. anticipate and challenge rival motions in the bakeshop market.

This will let Greggs to stay advanced and develop new and altered formulas in response to
market alterations and consumer demands.

To beef up and construct upon our topographic point market to accomplish 4 % place by 2010.

This will be achieved through “core growing and debut of new mercantile establishments “ . It
will enable Greggs to be a adept participant in the German Bakery market ( see Figure B )

To broaden the Greggs merchandise portfolio by 5 % twelvemonth on twelvemonth.

This will allow Greggs to spread out their operations. in line with their growing ideals. and to
boot offer a larger merchandise scope to ever-evolving consumer demands.

To establish a farther 6 shops in Germany by 2010 therefore spread outing range and influence.

This will ease Greggs strive towards accomplishing their chief purpose: ‘To be Europe’s finest
bakery-related retail merchant. ’

Increase consciousness of the Greggs trade name in the German bakeshop market

By achieving trade name consciousness. Greggs will able to insulate themselves. to an extent.
from the wrath of competition. The German bakeshop market is mostly disconnected therefore
doing it an attractive market for possible new entrants.

7. 0 Foreign Market Entry Strategy

“Firms make up one’s minding to come in a foreign market face a critical determination in taking
the best market entry manner to serve the market. This determination is important because it can
hold an on-going impact on a firm’s international concern public presentation. ”

Root ( 1994 ) suggests three different regulations ‘Naive rules’ . ‘Pragmatic rules’ and ‘Strategy
rules’ . However as a consequence of the progressively heterogenous nature of the international
market. it is of import that Greggs do non generalize their attack. but adapt each entry manner
harmonizing to the host market. The manner selected in Belgium hence. may non be wholly
applicable to Germany. Based on this principle. Greggs will be using ‘Strategy rules’ which is
when all entry manners are compared and evaluated before a pick is made.
Furthermore. harmonizing to Hollensen ( 2001 ) “some houses have discovered that an ailment
judged market entry choice in the initial phases in the houses internationalization can endanger
the houses future market entry and enlargement activities “ . hence exemplifying its importance
to Greggs plc.

Greggs will necessitate to see the chief groups of entry manner influencers prior to pick in order
to place the most appropriate and profitable manner.

1 ) Internal Factors

Harmonizing to the Company’s Act ( 1985 ) . houses with over ?5. 75 million in turnover and
over 250 employee are classified as big. Greggs more than qualifies this with a turnover of ?422.
6 million and employment of 17600 people in 2003. This provides them with an equal resource
capableness to open up a gross revenues and production subordinate in Germany.

Furthermore. in developing their theory of internationalisation. Johanson and Vahlne 1977 assert
that “uncertainty in international markets is reduced through existent operations in foreign
markets ( experiential cognition ) instead than through the acquisition of nonsubjective
cognition. ” Greggs have already ventured into Antwerp and Leuven in Belgium hence
increasing their experiential cognition and expertness.

Greggs green goods is fresh and adust goods. In order to keep this stance. the lone executable
option would be to bring forth. every bit good as sell in the host state. Additionally. because
Greggs will advance themselves as a British company. they will be pass oning a clear derived
function and competitory advantage.

2 ) External Factors

Both the UK and Germany are members of the European community thereby cut downing their
Socio-Cultural distance. This propinquity between states will therefore favour hierarchal
manners of entry.

Due to the propinquity between states perceived hazard is reduced. Companies are hence less
loath to prosecute more affecting manners of entry.

It has been stated that “the size of the host state is an of import attractive force to foreign direct
investing ” as big and turning markets will do direction more likely to perpetrate resources to the
development of a entirely owned subordinate. With a population in surplus of 825 Million people
in 2002 Germany is obviously a big and turning market doing it an ideally suited to a FDI
manner of entry. Furthermore. the German bakeshop market is extremely disconnected which
reduces barriers to entry in the signifier of dominant rivals.

All other variables being equal. the higher the strength of competition. the more likely a house is
to choose an export manner of entry. The German bars and pastries market is made up of several
little participants each of which occupy little proportions of the market place. This presents itself
as an ideal proposition to Greggs who will be able to set up themselves without dominant
resistance.

3 ) Desired Mode Features

The pick of manner of entry will besides depend on the attitudes of the determination shaper.
Although it is hard to find how pro-risk or hazard averse Greggs Managing Director Sir Mike
Darrington is. one may presume from their hierarchal entryway into Belgium that a high hazard.
expansionist scheme has been adopted and will be pursued.

The grade of control that direction desire over operations will assist set up which manner of entry
to use. Hierarchical manners allow high degrees of control over operations guaranting that the
latter are carried out to Greggs specification.

All else being equal. the greater the resource investing. the lower the flexibleness of the concern.
Consequently. if Greggs pursue a hierarchal manner of entry. they will hold to see their potency
limited flexibleness.

The above suggests that Greggs’ would profit from a hierarchal manner of entry as it satisfies all
standards for the latter. This is where the house wholly owns and controls the foreign entry
manner.

However. regardless of the evident control over operations specified by this manner. the grade of
control that caput office can exercise over the subordinate depends on how many and which
value concatenation maps can be transferred to the market.

Having reviewed all options. its was decided that a Gross saless and Production subordinate will
be introduced in Germany go forthing the Research and Development and Marketing activities to
be conducted at place in the UK.

Harmonizing to Hollensen ( 2001 ) . holding selected this manner of entry. Greggs will profit
from holding full control over the whole operation. Furthermore. Greggs has long term market
potency in Germany and hence the ownership of a gross revenues and production subordinate
will enable Greggs to construct a strong international presence over a long period of clip. This
method besides eliminates the possibility that a national spouse gets a ‘free ride’ and allows
Greggs to derive market cognition straight.

A gross revenues and production subordinate will ease rapid entry to the German market leting
speedy entree to its distribution channels. Plus. no transit costs will be incurred as natural stuffs
will be purchased in the host state.

In add-on to those proposed by Hollensen. Greggs may profit from being able to accommodate
the ingredients used to German gustatory sensations. They can to boot orient the servicescape to
German penchants. Greggs green goods is non-durable and therefore it would be inappropriate to
demands to be produced and sold rapidly as it is preponderantly sell fresh nutrient.
Retaining R & A ; D and Marketing operations at place will cut down costs and hazard. Having
established themselves in the German market. Greggs may see reassigning these operations over
in the hereafter. Furthermore. using a hierarchal manner will enable Greggs to work new market
chances every bit shortly as they arrive with minimum hold. In line with the latter. Abell ( 1978 )
construct of a strategic window provinces that there are merely limited periods during which the
tantrum between the demands of the market and capablenesss of the house are at an optimum.
Investing should hence be timed consequently.

Although. this method will necessitate a great trade of investing in footings of clip. money and
committedness. research has shown that “the net income returns generated by foreign direct
investing manners are normally greater than those generated by exporting “ .

Harmonizing to the Uppsala Internationalisation Model. companies begin their

internationalization process a ) by traveling into comparatively close markets foremost so more
distant 1s and B ) companies entered new markets through exporting. Although at face value it
appears that Greggs’ scheme contradicts the premises of theoretical account. it does nevertheless
highlight the undermentioned exclusion: Firms that have larger resources can take larger stairss
with fewer effects. Arguably Greggs autumn under this class.

This theoretical account besides suggests that houses start by come ining markets which are
nearer in footings of psychic distance hence cut downing uncertainness. Germany is considered
comparatively near and despite linguistic communication barriers. the German civilization is
similar to that of the UK as highlighted in the ‘Environmental Analysis’ subdivision of this
study.

7.0
Greggs, a well-known British retailer of food-on-the-go, has chosen Germany as its target market
for worldwide growth. Greggs must think about how to use their marketing mix in order to
successfully enter the new market and increase their chances of success. When entering the new
market, Greggs should consider adapting their product features, packaging, pricing, and
promotion, as well as standardizing their brand positioning and distribution strategy. Greggs
must make sure that their marketing initiatives are suited to the German market in order to
guarantee that buyers are aware of their products. The cost of production and labor in the market
must be taken into account to guarantee their pricing is reasonable.

7.1 Journal