Iceland Foods

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Iceland Foods


7 pages / 1925 words



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Please use UK english not US english
Please use Harvard reference style
please use Academic sources from the UK

Iceland Foods
Iceland Foods is a British supermarket chain, operating primarily in the UK. Iceland (as it is commonly known) opened its 800th store in September 2013 (Halliwell 2012a).It employs 25000 people (Jacobs 2013) and in recent years the company has actively sought international market expansion.
According to Mintel (2013) “Aldi, Lidl and Iceland have between them around 5% of the (UK) grocery market, but they attract over a quarter of shoppers on an occasional basis”. These stores are known as hard discounters, they are complementary to the superstores as they compete for part of the main shop. Strong growth was seen among the hard discounters over 2012 in the store cupboard basics sector (Mintel 2013) although this is not evident / commented on in the Iceland Annual Report statement (of 2012/13.
In November 2011 Iceland opened its first store in Portugal and has plans to open an additional 5 stores in Portugal with franchise partner Overseas. Iceland has 12 stores in Spain (where it is a favourite with ex-pats and has been in operation since 1998). The Spanish stores are also a franchise venture with Overseas. Walker stated “(Overseas) are doing a fantastic job and we are content to supply them. They understand the market and we don’t” (Lawson 2012). Iceland is now investigating opportunities in South Africa.
In February 2012 Iceland opened its first store in Pilsen, Czech Republic, with a view to further expansion in Eastern Europe, specifically Poland and Hungary. The shop is a franchise partnership with local company Czechfrost (Lawson 2012). A trial of frozen ready meals has been undertaken in Hungary (Halliwell 2012c)
A 37% share in Island-Verslun was purchased to fund the development of franchise operations in Iceland (i.e. the country) in November 2012. This follows success of the Reykjavik store which opened in July 2012. (Halliwell 2012b)
Another franchise (10 stores) is operated in Northern Ireland with partner Aim Group.
Paul Foley was appointed as international business director in September 2012. Foley was appointed to lead Iceland’s international development through exporting, franchising, acquisitions or store openings (Halliwell 2012a). Foley is based at Iceland’s export division (ITEX) in Vienna. ITEX exports Iceland products to more than 100 retail outlets in 34 countries worldwide (Annual Accounts 2013)
Iceland recorded a seventh consecutive year of record pre-tax profits (£184.3M) in June 2012. However, sales slowed in 2013, mainly attributed to the negative publicity generated by the horse meat scandal in the UK. Whilst Iceland was exonerated from the scandal, meat (beef) sales declined. The company are viewing this as an opportunity to develop vegetable and lamb based products.
In June 2012 Iceland purchased Loxton Foods and renamed it Iceland Manufacturing, transferring the production facility to Gorton, Manchester. The company do not wish to become a ‘permanently vertically integrated company’ (Addy 2013) though have indicated that they will invest to improve efficiencies wherever appropriate. The Cooltrader business arm of Iceland was sold during 2013 facilitating purchase of the ready meal manufacturing facility in Gorton. The sale is believed to have “laid the foundations for further growth of the Iceland brand internationally” (Walker 2013)
Despite competition from the major supermarket multiples with their coupon based promotional activity Iceland has been consistent in retaining their round sum pricing policy and unbeatable Meal Deals (2013 Annual Report). The round sum policy (prices rounded to the nearest multiple of 25p) is known as Clear Cut Prices and replaces past Buy One Get One Free (BOGOFF) and Meal Deal promotions. Home Deliveries are a key strategy; any order over £25 can be delivered to the customer’s home free of charge. The company also use a Bonus Card which offers participants vouchers, special offers and entry into a monthly prize draw whenever the card is used (
The company aims to lead the market in frozen food product innovation and launched more than 400 branded frozen food products during the 2012/13 financial year. The company has formed an exclusive partnership with Greggs (bake at home products) (2013 Annual Report).
The company is committed to expansion of exports, retail franchising, acquisitions and store openings outside the UK, supported by “the insights of our shareholders Brait S.A. (South Africa) and the Landmark Group (Middle East)” (2013 Annual Report). Malcolm Walker (CEO of Iceland) has financial backing from the Middle Eastern retail group Landmark, DFS founder Lord Kirkham and South African investment firm Brait (Lawson 2012).
More general information on Iceland can be found on the BBC iPlayer series “Iceland Foods – Life in the Freezer Cabinet” at

Using the case study above and your own research analyse how Iceland has developed its international presence. Marking guidelines are bracketed after each specific task. Your submission should be written in report format and include the following:

Referencing (including citations/acknowledgements within the report) and use of English ( a business like style written in the third person; appropriate terminology; use of spell checker) (5%)

Within your report you should
a. Undertake a statistical analysis of the UK and international food / ready meals market. What is Iceland’s current market share in the UK, what are the projections for growth? How have you arrived at these figures? What is the situation in overseas markets?
b. Identify, discuss and evaluate the key environmental issues which shape marketing strategy and use a range of models in your response.
c. Discuss how Iceland should tackle the standardise / adapt issue

1. An analysis of Iceland’s marketing strategy in response to changes in the business environment. (20%)
PEST, SWOT, then Ansoff’s growth strategy model
Market screening process (for task 2)
Case study, Iceland Ann report, Mintel 2013, Euromonitor 2012,

2. An evaluation of Iceland’s market entry strategy in the Czech Republic. Can this be extended into Hungary? (15%)
See market screening process above
Current entry strategy?
What is a franchise? Use mkt entry grid (risk vs control) discuss ads/disads

3. Identification of how Iceland should segment, target and position the brand internationally (20%)
If country is the first seg variable (geog) EU is free trade area, so entry should be easier than in other countries (non-EU) cos of this
Seg based on similarities btwn countries would allow Iceland to build an international brand
Tgtg: in UK Iceland target price sensitive, low –Y, low expenditure budget families – transferable to international mkt.
See 80% assgt for application of variables
Positioning – currently positioned as a discounter in the UK.
find out who are competitors in Hungary (see Euromonitor) and create positioning map.
Could benefit from COO effect (UK stereotype for higher quality products?)

4. Suggestions as to how the company should implement the marketing mix in Hungary. (40%)
Apply 7p’s (don’t forget logistics for process / physical env / place)
Discuss standardise / adapt decision in relevant elements (product; promotion)

Referencing (including citations/acknowledgements within the report) and use of English ( a business like style written in the third person; appropriate terminology; use of spell checker) (5%)

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