The strategic analysis has been undertaken with reference to two different tools developed by Porter in his book publication Competitive Strategy. While these have been criticized by some,they still have a strong influence over both business practices and academic research. Initially ,the focus is at the company level, although this will be followed by an industry wide perspective using Porter's "Five forces model" to assess the long-term strategic re-structuring implications, the move has had on the UK grocery sector.
Internal strategic benefits
In the grocery industry, price is an important part of the service offering for retailers. Strategically,FGP has the potential to deliver economies of integration,which supports this market-winning goal by providing for lower distribution costs.Porter states five possible economies of integration, namely:
1.enonomies of combined operations
2.enonomies of internal control and coordination
3.enonomies of information
4.enonomies of avoiding the market
5.enonomies of stable relationships