Kesko SWOT Analysis

adam April 13, 2011 Retailing No Comments

Kesko is a retail industry founded in 1940 and is presently headquartered in Helsinki, Finland. Its subsidiaries expansion is highly progressing in Estonia, Russia and Latvia. The company is currently providing a wide range of services including consumer durables, agricultural products, auto sales, departmental stores, supermarkets, and hardware retain and hardware markets. S- Groups having the same services are its biggest competitor sharing the same demographic locations.

Strengths

• The company has a good hold over its home market as it revives its strategies by continuous flow of discounted rates.

• The brand name has fully developed in the Finnish market.

• Private label brands are very well recognized and have a trustable place over national products.

• The loyalty card along with the other attractive sale and discount offers earns a good name for the company retails and more than half of the population of Finland has signed up with theses cards.

• Annual revenue of the company, according to the recent calculations have touched €8.777 billion, with the operating cost of €307 million, generating profits of €205 million from the total assets accounting for €4.177 billion.

• The retail outlets cover the wyhole country and are nationally recognized.

• A good range of non food as well as grocery items earns a good competitive advantage for the company.

Weaknesses

• Price sensitive issues are often not treated accordingly especially as compared to the fast growing competitors.

• The company retailers are not under one fleet head but are actually independent, which led the company at comparatively risky position.

• The company while missing the expected acquisitions has weakened its infrastructure as well as spread of the locations.

• The company organic product has reached to the saturation level. In terms of organic growth, Kesko has nearly reached saturation point.

Opportunities

• The Cassa discount stores are key entities for retailing at discount rates and compete with Lidl, which is German discounter.

• The Kesko supermarkets with traditional grocery items hold a very strong position for the company. The Kesko supermarkets accompanied with other upcoming outlets like K-Pikklo chain and C-store market will gain an everlasting fame for its special discount offers.

• The company has chances of expansion to store markets with the acquisition of Pikoil.

• The food business reorganization would be soon liable for the brand image.

• Asko and Sotka, the two furniture acquisition would help the company to conquer the non food business.

• The free of carbon dioxide product production by the company is way forward toward towards environmental sustainability.

Threats

• The Finish market is considerably promoting the larger competitors to the Kesko Company.

• The competitors like Lidl are proving a fierce threat to the company’s marginal profits with comparatively greater manufacturing costs.

• The dynamics prevailing the company are supposed to be haltered for the time being as the internal reorganizing of the company is planned for food business.

• Kesko being the local player is at a dire threat of international penetration of foreign companies as the world is very much vulnerable by globalization.

References

• Official website. http://www.kesko.fi/en/. Retrieved on April 7, 2011

• “Annual Results 2010”. Kesko.

• “K-Rauta: Hitta till oss”. K-rauta AB. http://www.k-rauta.se/hittatilloss.htm. Retrieved October 5, 2009.

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