Bear Nibbles is a London based company that specializes in the baking and production of natural foods from baked fresh fruit (Bear Nibbles, 2016). The company came into existence as a result of Hayley Gait-Golding’s passion for nutrition and food, which eventually resulted in the development of a healthy snack instead of mere colorless dried fruit. What started from the home basement, went on to later transform into the biggest names in the industry, mainly attributed to Gait-Golding’s consistency, hard work and complete cooperation by her father and husband who still work with Gait-Golding (Bear Nibbles, 2016). This paper aims to study the case of Bear Nibbles in context of strategic marketing. The aim is to make use of strategic marketing tools in order to conduct external and internal environment analysis, competitor analysis, and customer analysis, analysis of its internal situation and an analysis of its current position. This will be done by virtue of a variety of strategic marketing tools and models in order to understand how the company has managed to reach such unprecedented growth. The paper will also give a hands-on experience working with the different theoretical approaches and models in strategic marketing.
2. Analysis of External Environment
A known approach towards understanding how a company operates within various markets is to conduct an environmental analysis (Mooradian, Matzler and Ring, 2012). Somewhat resembling to its literal meaning, environmental analysis is more of a strategic tool that allows in the identification of all external as well as internal forces and factors that have a direct or indirect impact on the company (Wilson and Gilligan, 2005; Gupta, 2013). Conducting an environmental analysis for Bear Nibbles would be essential in understanding the environmental factors that have an impact over its operations, growth and progress. Furthermore, environmental analysis would also assist in determining key inferences that can be useful for Bear Nibbles in the near future with regards to decision making and forecasting of opportunities or vulnerabilities underlying its operations.
Considering the fact that markets and the competitive landscape is constantly changing due to the rapid development of new products / services / technologies and changing consumer preferences, external environment analysis can empower Bear Nibbles to strengthen and adapt to the changing business landscape to ensure sustainability and long-term growth. This is because in the business domain, sustaining growth is equally essential for Bear Nibbles as achieving short-term growth.
PESTEL analysis is a strategic tool for conducting external analysis that has been developed to make it easier for companies like Bear Nibbles to analyze their external environment so that they can make more informed and targeted decisions. It is also among the most commonly utilized tools for external environment analysis, and is the acronym for six major external environmental forces that impact an organization’s operations. These six forces encompass Political, Economic, Social, Technological, Environmental and Legal forces. Therefore, a detailed PESTEL analysis for Bear Nibbles has been presented in what follows;
Key political factors influencing Bear Nibbles can be categorized as government policies, Tax laws, government stability and regulations on entry modes (Arline, 2014). Although the company aims at going global and to target the international markets in the near future, it currently operates within the UK, which is its home country as well. This implies that the company does not have to face any trade tariffs or regulations on entry modes. However, Bear Nibbles does have to comply with the standardized requirements by the local government policies set forth. On the other hand, given that the UK is among the developed countries with a stable government and no or minimal instabilities, Bear Nibbles is not prone to any risks from the government. If the company decides to enter into the European markets though, it may face increased trade restrictions across various countries, trade tariffs, and rather stringent policies maintained by country-wise food and drug administrations. Compliance with these requirements may prove to be somewhat challenging; nonetheless, considering that the company already makes its products in compliance with the UK laws and policies that are highly standardized, Bear Nibbles may be considered as well-prepared. Furthermore, operating outside of the UK also means that the company would be prone to political instability of its target countries along with increased taxes and restrictions.
One major economic factor that Bear Nibbles must consider is that while it aims at going international and start with targeting the European markets, a large portion of its revenues would still be dependent on the UK markets. Bearing in mind that the UK is ranked 5th in terms of GDP and has a large population (Statistics Times, 2016), the current situation for growth of Bear Nibbles appears to be profitable. The UK is a free market economy, which further complements the growth of the company in terms of size and annual sales volume. On the other hand, going global would expose Bear Nibbles to a variety of economic perils, low GDP and Low Personal Disposable Incomes across countries, which may compel the company to reduce its pricing and brand positioning in order to survive globally.
While Bear nibbles has already contributed positively in the social domain characterized by increased investment in developing countries, increased employment opportunities particularly for women having children, it is also being impacted by other social factors (Bear Nibbles, 2016). For instance, there is an increased awareness and concern towards health in children in the UK society, where there is a lack of healthy snacks that could help in overcoming child malnutrition barriers. Secondly, a vast majority of families within the UK feed their children with cereals for breakfast in the present day. Additionally, a growing number of adults are also shifting towards consuming cereals for breakfast as a healthy and quick alternative to traditional breakfasts (Brown, 2004). Similar to the UK, child health concerns with regards to food and nutrition are also increasing in the rest of the world, which means that Bear Nibbles has a significant opportunity for adoption of its healthy snacks for children.
Technological factors with respect to Bear Nibbles mainly includes new discoveries, technological advances and innovations driven by widespread technological adoption. The UK market, in terms of technology, is highly competitive. The UK government supports technological advancements and innovation across its industries, which why Bear Nibbles can leverage the advancing technologies in order to improve its performance in terms of production efficiency, packaging and others. A major shift from the traditional – physical – stores to online purchases is also a major technological trend that drives markets in the UK and across the globe.
Consumers in the UK and across the globe have become more environmentally aware in the present day, and appear to prefer products that are environment friendly (Harper and Makatouni, 2002). For instance, excessive cutting down of trees – deforestation – and increased emission of harmful gases in the environment are some known antecedents that have witnessed increased opposition from the global consumer society. However, since Bear Nibbles already positions itself as a forest-friendly brand that does not make use of paper made out of trees but instead uses paper made by FSC-accredited sources, it may not have to struggle dealing with environmental forces.
Government policies and legislations may directly influence Bear Nibbles and its routine operations. Although the company is currently surviving in the UK markets, it may have to face regulations that may restrict brands to change their prices without notice and approval from the authorities (Bear Nibbles, 2016). This means that the company would have to ensure that it sets prices that do not need periodic changes.
Main Trends Apparent in the Industry
From the PESTEL analysis presented above, the following main trends have been identified;
- An increase in health and nutrition concern for children within and outside the UK.
- Increased adoption of healthy snacks for children within and outside the UK.
- Changing buyer behavior, more reliant on online shopping instead of physical purchase.
- Increased consumption of cereals by older adults as a healthy alternative to breakfast.
- Increased environmental awareness among global consumers and their preference to environment friendly products / services.
- Constantly changing market conditions; demand, price, distribution, promotion.
Key Strategic Issues
After a thorough PESTEL analysis, it is evident that Bear Nibbles may have to deal with a variety of key strategic issues. Firstly, in order to sustain growth, it may need to develop healthy snacks and cereals for older adults in addition to children. Secondly, going global would mean an increase in the demand for Bear Nibbles products, which means that the company will have to enhance its current production procedures to meet the increasing demands. Hence, the company will have to adopt new and innovative technology that could instill efficiency in production and packaging by automating a major portion of the production side. Something similar to innovative assembly lines would be required by Bear Nibbles in order to cope with the increasing demands. Furthermore, entering the international markets would require Bear Nibbles to gain consumer trust, which can be best achieved through localization. Hence, the company may need to consider hiring local fruit farmers and employees to its country-wise production outlets in order to give a localized impression. Finally, pricing will be a key strategic issue for Bear Nibbles’ international operations as every economy is different, and may require reduced pricing, which would require the adoption of low-cost strategies for production.
2. Analysis of Competitive Environment
Another key consideration for the survival and progress of any organization is to analyze the competitive landscape, which allows a company to decide on the future steps (Dobbs, 2014). For this purpose, Porter’s Five Forces analysis can prove to be a key strategic tool for competitive analysis, and can be applied to the case of Bear Nibbles. A five forces analysis for Bear Nibbles has therefore been presented below;
Bargaining Power of Buyers
Bargaining power of buyers means the degree to which customers have the ability to affect the price of a product or a product basket. Buyer power primarily relies on the ability to substitute, switching costs i.e. the cost of selecting another similar product, number of customers, and price sensitivity. For the case of Bear Nibbles, the bargaining power of buyers is low because there are no prominent substitutes – despite the presence of competitors in the cereal industry such as Kellog’s and Nestle (Dechene, 2014) – that offer dry fruits as health snacks in a variety of attractive and delicious forms. Although the customer base has increased substantially for Bear Nibbles, yet due to lack of substitutes and high switching costs – attributed to the additional cost of sugar consumed for other snacks – buyers do not have a high level of influence.