Applegreen Business Strategy

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Differentiation

Another porter’s generic strategy that Applegreen uses to achieve a competitive advantage is “differentiation”, it involves uniqueness along some dimension that is sufficiently valued by customers to allow a price premium. (Wittington.J. 2008).

Location site: Applegreen sites are well located in key urban and well trafficked areas; this makes it difficult for competitors to successfully open sites in the localities in which it operates.

Retailer: Most of Applegreen service station have a strong heritage in food developed over many years and is experienced in operating both its own and internationally branded food concessions. Most of Applegreen motorway stations include a convenience store which has Burger King Restaurant and drive- through, Subway sandwich bar, Applegreen own ‘Bakewell Kitchen’ café, Costa Coffee.

They also have in and outdoor children’s play areas, indoor & outdoor seating, toilets and washroom facilities, car, bus and HGV parking. Another differentiation of Applegreen to its competitors are the company’s senior management team, is highly experienced in the petrol, retail, food and beverage markets. The Chief Executive Officer and Chief Operating Officer have been with the company since the early stages of its history. The senior management team has a strong track record of making acquisitions and growing site numbers. (Applegreenstores.2017)

Applegreen brand – The Directors believe that the company has created a strong and compelling brand in Applegreen. The company invests in Applegreen sites to create an attractive and welcoming environment for consumers it also aims to offer the lowest fuel prices in a locality through its “Low Fuel Prices Always” price promise which drives fuel volumes and customers to its high quality food and beverage offering and “Better Value Always” in-shop retail proposition. Applegreen has won a number of industry awards recognizing the strength of its brand and proposition. These include the NACS (Association for Convenience and Fuel retailing) International Convenience Retailer of the Year award in 2010 and the Retail Excellence Ireland National Store of the Year Award in 2014. Applegreen recently won an award of ‘European Star of 2016’ at the European small and Mid-Cap awards. (Checkout 2016)

Growth Strategy

Ansoff Growth Matrix is a marketing planning tool that helps a business determine its product and market growth. It suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets. Applegreen uses “Market Penetration” one of ansoff growth matrix as its growth strategy, it involves selling existing products into existing markets. (Wittington.J. 2008).

Applegreen growth strategies include upgrading and rebranding existing network. The company’s portfolio encompassed private fuel storage that is branded as Applegreen sites. On completion of an acquisition of a new private fuel storage sites, the site is typically rebranded on the forecourt canopy as a ‘low fuel prices always’ site requiring minimal capex. If it is appropriate and practicable at a site and if it meets the company return hurdles, the company looks to invest in upgrading and rebranding the site to its premium Applegreen brand over time. Applegreen is currently expanding the private fuel storages estate in Ireland and UK. The company plans to accelerate this expansion in Ireland and UK in terms of geography and sites and part of the net Placing proceeds for the Company will be used for this purpose. It has dedicated personnel in both Ireland and UK whose sole focus is on the identification of potential sites to be added to the estate. Opportunities are developed from the company existing network of contacts as well as brokers and intermediaries operating in the sector. (Business & Finance.2016)

The company plans to develop further Service Area Sites in Ireland and UK. Its dedicated site identification capability is complemented in the case of new site development by an in house team (again focused on each territory) who seek to develop and progress applications with local governmental and regulatory authorities. The Directors believe that, in light of recent published governmental policy in the Republic of Ireland and the United Kingdom, the development of new Service Area Sites is likely to be a significant growth opportunity for the company.

Other growth areas that Applegreen will consider are to make larger acquisitions of company sites as and where they become available if they are in the best interests of the company. In addition, Applegreen has established a small presence in Long Island, in the north east of the United States. While the north east of the United States is not currently a focus for significant expansion, the directors believe that by establishing this small presence now, it will provide the company with a potential platform for expansion over the medium term. Applegreen is currently targeting to have more sites operation in the North east of the United States by the end of 2016. (Independent 2017)

Conclusion

Based on the analysis Applegreen seems to be a sustainable with the strategy it uses. Its motorway stations are unique than any other fuel companies in Ireland and by expanding and developing its stations it boots the competitive advantage because customers don’t have to travel a long distance to get to Applegreen station. When it comes to the industry Applegreen doesn’t have to worry about new competitors coming in, as in a fuel industry they are barriers to entry.

Applegreen focuses on their low price guarantee by employing tighter internal controls and through cutting out the middlemen in their business processes and joint ventures with Burger King and subway. Through employment of environment scanning Applegreen has been able to adapt to any challenges of recession and maintain their competitive advantage over rivals, by the introduction of loyalty card scheme and own brand products for sale in store.

Their strategic planning has been aided by the use of think tank meetings with several multinational companies in alternative markets and one such market that Applegreen is considering as a business venture into a new, but existing market going forward. Applegreen employ a low cost leadership strategy and a very effective one and while Applegreen’s preferred growth model is that of an organic natures the company is versatile in its approach to consider growth by acquisition and even suggest that such a strategy may be used for the next geographic area they intend on perpetrating