Exki implementation in UK
Publié le 05/05/2011
Extrait du document
Table of Contents
Introduction
I. Situation Analysis
A) Stakeholders
B) Environmental
- Social Cultural
- Legal
- Economic
- Political
- Technology
C) SWOT Analysis
D) Competitor Analysis
II. Market Development Strategy
A) Segment Identification
- Segment Needs
- Segment Trends
- Segment Growth Potential
- Size of Segment (Population)
B) Target Segment Profile(s) and Strategy
- Target Market
- Entry Strategy
C) Offering : 4 P’s
- Product
- Price
- Distribution
- Promotion
D) Resources Required
- Human
- Capital
- Material
E) Key Success Factors
Conclusion
Introduction
Exki was created in Belgium in 2000 by three friends: Frederic Rouvez, Nicolas Steisel ad Arnaud de Meeûs.
Their main challenge is to offer a new kind of quick restoration that combines quality and speed. The Belgium market was an immediate success with three opening restaurants in one year and 48 restaurants today!
In 2009, Exki received the “Managers of the year” price from the Trends-Tendance magazine and in 2010, Exki won the 15th edition of the “Company of the year” organized by the famous Ernst & Young company in collaboration with the newspaper L’Echo and the bank BNP Paribas Fortis.
The doors are open, the company is clearly launched and more than ready to expand to new markets.
We will see through this study why the UK seems to be the best field to implant for a company like Exki at its stage.
I. Situation Anaylsis
We are going in this part to look at the UK situation according to various criteria as stakeholders, legal, political, environmental, economic and social cultural.
The situation seems very attractive to implement our brand, EXKI, in the UK.
With a land area of 93,278 sq mi, UK’s population represents 61,284,806 with a growth rate of 0.2% (2010).
The monetary unit is the pound sterling (£)
The capital and largest city is London with 7,615,000 citizens.
The other large cities are Glasgow (1,099,400 citizens); Birmingham (971,800); Liverpool (461,900) ; Edinburgh (460,000); Leeds (417,000); Bristol (406,500); Manchester (390,700); Bradford (288,400)
A) Stakeholders
Investors
Knowing that England is one of the countries that receive the most foreign investment, we can only be optimistic about implementing our company over there.
Indeed, if we look at the embassy website[1], we found out that foreign investors receive very various help from the government.
This helping hand offer them advices concerning the location where the foreign company want to implement, giving them advices about the funding, the recruitment, the tax system and linking them with professional advisors like lawyers, experts…
Moreover, the government can also suggest them partnership programs enabling them to make contact with potential commercial partners, give them a physical assistance in the field and the last but not least help proposed is the financial ones for the foreigners to optimize their investment.
Good to remember that both states, Belgium and UK share membership of the European Union and NATO.
Partnerships
One on the most important detail we will have to look at is the partnership.
EXKi’s main partners in Belgium are Max Havelaar and the WWF. For WWF for example, in all cases, where possible, EXKi supports business initiatives such as the ‘Heart of Africa’ campaign, the Amazon forest...
The Fairtrade Max Havelaar ensures that the purchase price of some imported products (like coffee) that does not remain stable (no secure income for producers) has a minimum, guarantees them an extra allowance which they can invest in development projects, and also decent working conditions, with a constant view to respect for the environment.
This global system is already improving the prospects for 1.5 million producers and their families, grouped together in 632 organizations and present in 58 countries.
This tool will be very important for the financing aspect and also for the promotion part.
On one hand those partnerships are interesting because they are international and so have contacts and structures in almost every country, so it can offer Exki related partners providing them funds. And on the other hand, those partnerships are for Exki a real leverage that can truly help the brand in UK to promote quickly a very good image.
Furthermore, Exki offers spaces for expression (exhibit, concert) to artists sharing its values and, moreover it has artistic partnerships like the young designer Gauthier Polain that decorated and created the atmosphere for its restaurant.
According to me, that point is very interesting as London which will be the starting point for Exki, is one of the most creative city around the world.
Such a partnership in UK would accurately help Exki to promote and to integrate the social culture…!
Let’s now look at the UK environment!
B) Environmental
“The coalition government (DEFRA: Department for Environment Food and Rural affairs) is committed to being the greenest government ever. It is taking action to cut carbon emissions, create the conditions for green growth, and improve resilience to climate change. All these elements contribute to the development of a sustainable green economy.
In order to deliver this, the one of Defra’s priorities is to “Support a strong and sustainable green economy, resilient to climate change”[2]
As the UK’s government is more and more concerned about the footprint it has on environment, Exki would be more than welcome in this new market as its policy already meets a lot of goals the UK’s government like for example the waste and recycling, the use reduction of gas emissions.
Indeed, Exki launched its own responsible company project Re-Think which is its seminal concept.
Re-Think represents a community that everyone can join, receiving gifts if ones play the game and try to reduce our own impact on environment (customers can get their green card that gives us free sandwiches if they come by bicycle to Exki’s restaurants for example)
Furthermore, Re-Think shows its customers in real time how it is becoming a green company and what its next objectives are.
For example if we look at those diagrams above and below, we can see how Exki manages its energy waste and what measures it took or also how it reduces its waste and what is the next measure it will take (in that case, its next step will be to promote sorting waste)
- Social Cultural
“It’s an often told tale, but it’s true that the UK staple fast food was invented by the Fourth Earl of Sandwich in 1762. The Earl, John Montagu, didn’t want to interrupt his gambling, so instead of sitting down to a meal, he asked for dried meat to be wrapped in bread.” [3]
Since that time, fast food market has been growing more and more.
Althought, the tendency in UK has been accentuated on Green fast food with the new need of people to eat healthy products even when they buy in QSR (Quick Service Restaurant).
A fast-food restaurant is a restaurant characterized both by food which is supplied quickly after ordering, and by minimal service. The food in these restaurants is often cooked in bulk in advance and kept hot, or reheated. Many fast-food restaurants are part of restaurant chains or franchise operations, which ship standardized products to each restaurant from central locations.
The industry has been trying to move the public away from that term over the past five years, shifting to the term quick service restaurant (QSR) in response to increasing backlash against \"fast food\". Consumers still refer to the restaurants as fast-food restaurants…
People in the UK appear to be the Europe's biggest fast food consumers.
Indeed, “In 2007 figures showed that UK consumers spent £82 per head just in fast food restaurants and burger chains.” [4] – that doesn’t even take into account other types of fast food order such as Chinese, Indian or Pizza.
Nowadays people are more and more willing to buy gourmet sandwiches and so, are getting ready to buy more expensive products if they get quality.
- Legal
Legally speaking, to sell Exki’s products, we don’t see a real legal problem as the UK system is quite similar to the Belgium one and that we would probably furnish ourselves directly in UK so that there would be any customs problem for food entry in the UK’s territory.
However, we have to ensure that the products we sell and the way we “interact” with clients are “legal”. As there are no additives in Exki’s food, it does not taint the consumer’s health.
But, since 2005, there has been a lot of new legislation with the diets of children mainly being targeted. Indeed, obesity levels in UK have increased a lot and health campaigners have been concerned with getting regulation in place that limit children’s access to the fast food that are said to be making them obese and unhealthy. This also includes the ways that advertisers can market their clients and especially the children.
For example it was announced in 2007 that junk food advertising would be banned during or close to all specific children’s programs.
In Exki’s case, it is not a real problem as it sells organic and healthy food but as we are talking about a “fast food”, this element must seriously be taken into account to not be labeled upon the entry into the UK’s market.
The legal concerns would much more concern the way Exki manages its stores in UK.
Most of the fast foods (and in our case for Exki) sell its products through franchises that offer much more flexibility and are clearly easier to manage abroad to adapt to customers’ various expectations. We should therefore regard more on the legal employment system and on the right or due we to buy or rent structures.
- Economic
The UK economy continued to recover from recession in the first three months of the year 2010, according to official estimates.
Indeed, “GDP grew by 0.2% between January and March, the Office for National Statistics (ONS) said.”[5]
We can’t really interpret this factor as a real indicator to invest or not as the world situation was pretty the same. The predictions tends to indicate that GDP will carry growing and people still need to eat and as they will have to work maybe more, they will have less time to eat so more time for fast food…
- Political
The sovereign is the Queen Elizabeth II since 1952 and the Prime Minister is David Cameron since 2010.
The situation is quite stable and the government helps a lot foreign investors.
- Technology
As the UK is part of the developed countries its citizens have a very good access to technologies.
Exki will be able to enjoy technology for its structure (and making bread, soups or sandwiches doesn’t require much evolved technologies) but also to promote.
Indeed, Exki’s website is its only tool to promote for now in Belgium and in the countries where it has established.
Moreover, Exki offers its clients an internet access in its restaurants and this part of the concept will also be feasible in the UK.
According to Exki’s launchers, Exki will pursue its intranet development as the Facebook model (with a chat for employees for example).
C) SWOT Analysis
Based on what we observed, here is the SWOT analysis of Exki in the table below. We will take a look at Exki’s Strengths, Weaknesses, Opportunities and Threatens.
|
Strengths |
Weaknesses |
|
- Product Quality - Strong Partnerships - Ethical values - Strategic locations of selling points - Leader in its category at home |
- Prices quite expensive - No advertisement budget - Limited target - High purchase price of raw materials
|
|
Opportunities |
Threaten |
|
- Growth of organic and green markets - Tendency to consume more healthy - Fast food in line with the need for time saving - Very positive image of organic |
- Active area with many new entrants - Concept easily imitable - Fast food associated to junk food |
Diagnostic: Besides many weaknesses, Exki situation would be extremely favorable in UK because the concept answers a growth demand.
D) Competitor Analysis
The fast food market in UK is already very competitive with worldwide brand already established and also with some luxurious neighborhood bakery.
Furthermore, six of the country's biggest restaurant chains( Burger King, KFC, McDonald's, Nando's, Subway and Wimpy) have signed up to the anti-obesity drive by the Government's Food Standards Agency (FSA) and have also pledged to serve more salad and slash levels of fat and salt in their products in an historic shift.
Burger King is also introducing a new healthy apple dessert as an alternative to ice cream and McDonald which opened its first restaurant here in 1974, now receives the visit of more than 2.5 million people in the UK every day.
Those brands are Exki’s biggest competitors because they already own a lot of market shares but happily they also have a “junk food reputation” and Exki will have to differentiate itself thanks to its healthy products and Zen atmosphere.
Opportunely, the popularity of sandwich bars and juice bars is rising and the healthy eating attitude is becoming more and more “up to date” and as it is Exki’s best weapon (it is nowadays considered as the best brand in term of value for money), the competition will not be a very big obstacle to Exki’s success in UK.
II. Market Development Strategy
Families are widespread, commuting public transportation is higher between home and workplace in UK than on the continent (at least in London), the higher housing prices means that the size of kitchen is reduces and young professional often share apartments and people have not a lot of place to cook.
Those reasons explain the fast food success in UK. But we will also analyze that the demand is more and more oriented on the green fast food.
How are we going to meet our market? Which strategy are we going to choose?
Which locations?
All those questions will be answered in this part to accomplishment Exki’s implementation in the UK.
A) Segment Identification
- Segment Needs
We saw before that the fast food culture is very well established and is here to stay in UK.
In fact a recent survey of 9000 people across 13 different countries carried out by BBC World in early 2008 found that 45% of people in the UK were more likely to agree that they liked the taste of fast food too much to give it up. The US weren’t far behind with 44 per cent agreeing with the statement.
As we also observed, the UK government prevent the population from obesity and regulates more and more the advertisement for fast food, moreover, the consumption of fast food tends to focus more and more on keeping the line and eating healthily.
As we saw backwards, UK consumers spend 82£ per head only in fast food which is not an insignificant data to take into account.
Exki’s offer is completely adapted to UK citizen’s needs because it propose value for money food that meets healthy expectations and further, it is a very environmental concerned company and as people are getting more concerned about ecology, it is the right time for Exki to implement in UK.
- Segment Trends
The healthy fast food is definitely the new trend to follow.
People are looking for justification if they buy fast food – yes, they all want a quick, filling meal but with pennies being harder to get, they also want value for money plus something that tastes good but that we can justify on health grounds. The big fast food chains are rushing to point out that their foods are healthier than we think – a case in point being recent KFC adverts showing a trainee ‘chef’ preparing the KFC chicken ‘fresh in today’ and showing a mountain of salad.
The organic and environmentally friendly food plays also a huge part in this new trend. In America, this has gone as far as a “green rating” for fast food brands published Greenopia (a very famous website in USA that provides customers ratings and comparison between various brands about their eco-friendly concern). Sadly, the best known food joints in the UK don’t appear to score very highly; but happily for Exki those brands are also its main competitors (Burger King, KFC, Dominos Pizza, Pizza Hut)
Exki will have to polish its green strategy because compared to its rivals, Exki’s first asset is: its preoccupation about environment and delivering healthy organic products.
That is the new trend!
- Segment Growth Potential
The main aspects where there is a serious growth potential for Exki is the organic food.
Indeed the tendency is for customers to look for value for money healthy products and Exki offers fresh, products, handmade sandwiches, organic milk and bread.
The other potential growth is the fat that Exki is an eco-friendly business much concerned about its reduction of electricity, gas emissions and waste.
People are more willing to buy their products from responsible business.
Indeed, it gives them a clear conscience about their own impact on environment and respect of human beings.
And the last but not least asset that would let Exki growing in the UK market is the fact that its restaurants offer, on top of a nice and quick service, a real concept where customers can eat peacefully and enjoy an internet connection if they want to work. Over and above, they can eat in a very well thought artistic Zen atmosphere as we saw that Exki was asking designers to build the interior of its restaurants.
This point can be a real differentiation factor over its rivals as the “fast food” word often refer to the fact of eating quickly and that is said to increase obesity.
This Zen concept could render the fast food more like a real restaurant where customers can take their time to eat a bit more than in chain restaurants like Mc Donald where you eat and go.
- Size of Segment (Population)
Population: by gender and age, mid-2009[6]
The diagram above is a representation of the age and sex structure of the population. Each bar represents a particular single year of age and the length shows the population of that age.
Children aged under 16 represented approximately one in five of the total population, around the same proportion as those of retirement age. In mid-2009 the average age of the population was 39.5 years, up from 37.3 in 1999. Further down the pyramid, people of working age (aged 16 to 64 for males and 16 to 59 for females) represent 62 per cent of the total mid-2009 population. Between ages 37 and 50 there is a ‘bulge’ due to the ‘baby boom’ years of the 1960s and early 1970s.
Those data will help Exki targeting its new customers in the UK.
B) Target Segment Profile(s) and Strategy
- Target Market
According to the information we got from the diagram above, we can say that 1/5 of the population is children under 16 years old and that 62% of the population is composed of women under the age of 55 years and men under the age of 60 years.
In the countries where it is already established, 70% of its customers are women which mean that the brand will have to ensure women’s expectations carefully.
The average age of those women is about 30 years old so it concerns women already working and often from an upper class.
However, the men still represent 30% of Exki’s customers and must not be neglected as the trend to eat fast and healthy also concerns them.
Moreover, the children under 16 represent a significant part of the population and are potential clients for future, so Exki should adapt its offer to those students from upper class.
Therefore, the clients Exki will have to target are upper class people including especially women around 30 years old, men about that age and children under 16.
It would be interesting to offer special menu for those children and to adapt Exki’s awareness campaign about environment to younger people.
Furthermore, we know that about 30 000 000 people visit London every year so it would be intelligent for Exki to take into account this information to locate its restaurants in touristics and strategic locations.
- Entry Strategy
Sandwiches represent about 30% of the total sales, plus the soups, salads, desserts, fruits, fait trade coffee, organic wine etc…
To enter the market Exki will have to claim its natural, healthy, fresh, fair trade, organic aspect without forgetting the sustainable side.
The emphasis is on vegetables—chronically lacking in our modern diet—as well as on reducing sources of fats. For example, EXKi does not use mayonnaise, but there are tapenades, légumaises®, or fresh pesto, packed with vegetables and flavour but low in fat.
Confident in its exclusively fresh products, EXKi will go to great lengths to avoid using any type of additive. What’s more, some of its ingredients (bread, dairy products, jam, vegetable sprouts, quinoa, etc) carry the ORGANIC label.
This will be seen on the way Exki advertise its customers on the frontage of its restaurants and also on its website.
Location will also have to be carefully chosen to attract the more people possible; it will probably represent the more important costs and are the key to success.
Indeed places like “City”, the “Docklands”, “Westminster”, “Oxford Street, “Picadilly Circus”, “Soho”, “Covent Garden” are very expensive areas but for Exki to achieve its implementation it will be more than needed to get rent there.
C) Offering : 4 P’s
- Product:
Exki offers a large gam of products answering its motto: “Natural, Fresh and Ready”.
Natural:
They select the best seasonal ingredients and use no additives at all. Moreover, some of their products are totally organic (BIO). For example the bread made and cooked homemade without any conservatives or artificial additive comes out from the four every morning in every Exki restaurant. The milk, the yogurts, most of their legumes, biscuits and jams are also bio.
Fresh:
To reduce their production and logical cost, the food industry looks to extend more and more the expiration dates of consummation: pasteurization, sterilization, freezing, sugar, additives, coloring etc…
At Exki, it is the opposite! To preserve taste and respect the customer’s health, its is the freshness that count the most. No ingredient is kept more than 2 days in restaurants without being consumed.
Ready:
A product already made that is ready to be eat or takeaway at home.
- Price:
Exki’s prices are the main reason for the company positioning.
It is justified by the quality and the products’ freshness. Their pricing method is determined y their different production costs. As London is one of the most expensive cities in the world, we think that the price won’t really be a problem. Moreover, our target tends to be in the upper class.
- Place:
The basic concept of Exki is to offer healthy food in an agreeable cadre.
A special effort has been made for the client to feel comfortable and can eat quietly
In this optic, every restaurant is decorated in a “Zen” atmosphere with peaceful and warm colors. The personnel are also very careful and smiling because he is always in contact with customers and have been trained.
Every restaurant adapts his personnel to his size and type of demand it meets.
Some restaurants that are quite small tend to focus more on the food to takeaway which implies a special laying out of the counter.
Another kind of restaurants much bigger and with much seating places focus more on the personnel en sale.
For all his restaurants, Exki focus more on stock management and has a central purchasing which negotiates with about 30 suppliers.
- Promotion:
For Exki the best advertisement is the one “mouth to mouth” which has for now worked admirably.
Nevertheless, the company beneficiates of an indirect advertisement thanks to the special attention being done on the ecological footprint.
Among his development, Exki has adheres to various labels BIO which can prove the quality of its aliments.
Ainsi, we can find on their website (http://www.exki.be) and also in its restaurants, multiple information about commerce equitable, respect of environment and equilibrated nutrition.
Furthermore, the company sends folders to companies in order to offer them its delivery services for sandwiches.
D) Resources Required
- Human
Everyday, every Exki restaurant receives about 1000 clients.
Most of those restaurants are franchises but they all work in the same way: with empowerment.
Indeed, Exki has did a particular effort on the way it furnish its food: service.
According to Frederic Rouvez, the real boss at Exki is the restaurant manager. Managers refer to a clear structure that control management and create a real culture orga
nization.
This empowerment is realizable through a training that Exki put into place.
It is its own academy that ensures Exki good service: Exki Academy which is the key to this very strong organization culture.
EXKi invests in the development of its employees within the company. EXKi offers constant training carried out by the EXKi Academy, founded in 2006. These courses are designed to harmonise methods and tools used at EXKi. This is also a forum for exchanging tips and tricks among the teams from different restaurants. The courses are open to all motivated staff members who are part of the integrated and franchised restaurants. Their content changes from year to year: customer service, leadership, work relationships, product quality, coffee, stress, anti hold-up precautions, and so on. EXKi also works with a number of experienced coaches to help managers develop their role...
Exki even started lanching learning session for sign language.
To ensure good work relationships, every two years, EXKi conducts an internal satisfaction survey which gives employees the opportunity to speak about their well-being, their motivation, relationships within the organisation, pay, and so forth. These findings are passed on to each restaurant and an action plan is put in place.
An intranet for staff members (My EXKi) enables everyone to find the latest news on what’s happening at EXKi, see photos of everyone, find internal contacts and take part in competitions. This is a place where everyone can say what they think.
- Capital
To establish a fast food franchise in the UK, we don’t really need big capitals. In fact, we have to pay the initial upfront costs (legally forced to pay to Exki even it open the restaurants directly).
To pay those costs, we have the possibility to receive a grant or a loan from government and banks that are very favorable to foreign investments.
- Material
There will also be on-going management services fees to pay plus the training of the worforce (Exki Academy that we saw previously) and other promotional activities.
Moreover there will be the costs for the rent, the equipment, the stock and the staff.
Knowing that vegetables and organic vegetables represent 15 to 20% of Exki’s purchase we will have to find a good partner to make business with and to furnish our restaurants.
It is also important to not forget that acoording to the location where our restaurants will be located we will be able to adapt our product offer.
For example along the coast, we would probably be able to buy more seafood products, it will be less expensive and more fresh!
By looking at the internet we found this retailer VEG. (UK) LTD (http://www.veguk.co.uk/production.htm) that seems to cultivate various vegetable and to have different point of sale in the country. It would be very interesting for us to reduce our transportation cost within the country and to furnish our clients fresh and quality products.
III. Key Success Factors
Here are the various aspect on which Exki has to focus to success its implementation in the UK:
- Organic/ Healthy products: provide quality products for health
- Restaurants Atmosphere: new kind of fast food (more like restaurants ones)
- Re-Think: sensibilize people to the eco friendly
- Website: advertisement through internet only (ecological and leading edge)
Conclusion
In other words, Exki’s success depends on two factors : the immediate pleasure for customers thanks to its products quality and the long term satisfaction with the health message that conveys the organic choice (priority is given on vegetables, no sugar etc.)
A dual message that it adds another one: recycling fast food!
Indeed, fast foods generate a lot of waste and at Exki everything is recycled.
Moreover, the food that has not been sold during the day is supported by charitable organizations.
Exki meets the new trend oriented on health and organic products, the government policy that will take into account more than ever the environment and how businesses impact on earth.
It is clearly in advance upon its rivals and will surely meet success in UK.
Sources
http://www.infoplease.com/ipa/A0108078.html
http://www.experiencefestival.com/a/Fast_food_-_Overview/id/5041741
http://www.fastfoodnation.co.uk/fast-food-firms-law.html
http://www.fastfoodnation.co.uk/fast-food-facts-figures.html
http://www.fastfoodnation.co.uk/developments-fast-food-what-are-trends.html
http://www.fastfoodnation.co.uk/how-set-up-your-own-fast-food-franchise.html
http://www.fastfoodnation.co.uk/fast-food-facts-figures.html
[2] http://www.defra.gov.uk/environment/economy/