Analysis of WH Smith's Retailing Strategy

Term Paper, 2010

22 Pages, Grade: 1,2


Table of Contents

List of Abbreviations

List of Figures and Tables

1 Introduction

2 Analysis of WH Smith’s Internal Capabilities

3 Analysis of WH Smith’s Environment

4 WH Smith’s Positioning Strategy
4.1 Segmentation, Targeting and Positioning (STP)
4.2 Marketing Mix
4.3 Generic Strategy evaluation

5 Recommendations for Improving WH Smith’s Strategy

6 Conclusion

7 Reference List


List of Abbreviations

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List of Figures and Tables

Figure 1 - WH Smith Financial Performance (2005-2009)

Figure 2 - SWOT Analysis for WH Smith

Figure 3 - Ansoff Growth Matrix

Figure 4 - Retail Growth Opportunity Matrix

Figure 5 - Retailer Four Axis Growth Opportunity Matrix for WH Smith

Figure 6 - Overview of WH Smith’s Operations from 1972 Until Today

Table 1 - WH Smiths's Marketing Mix 7Ps

1 Introduction

The retail industry in the UK, as a relatively mature and oligopolistic sector, can be characterised by overcapacity, price-driven marketing, and a high concentration of firms (Morschett, Swoboda, & Schramm-Klein, 2005, p. 275). WH Smith has a history of over 200 years of development dating back to 1792 (Figure 6, Appendix). However, WH Smith is one of Britain’s leading retailers of today and known for its chain of High Street stores, travel outlets at airports, train stations, motorway service areas, hospitals, workplaces and bus stations selling books, stationery, magazines, newspapers, and entertainment products (WH Smith, 2009a). Most of WH Smith’s business outside the UK (United States, Canada, Australia, New Zealand, Hong Kong and Singapore) was subsequently sold as financial targets were not met. For the year of 2010, WH Smith is planning to expand its business to non-European markets (i.e. India), were it plans to open six outlet stores at the Delphi airport in 2010 (WH Smith, 2009b).

This paper offers a case study of the UK retailer WH Smith. With regard to the structure of this essay, initially a short company overview will highlight WH Smith’s areas of operations. Thereafter, the company’s internal capabilities and its external environment will be examined in chapters two and three, respectively. This will then give the foundation for a substantial analysis of WH Smith’s positioning strategy. Recommendations on how to ameliorate the company’s strategy will be presented in chapter five. Finally, in a retrospective analysis of this paper the findings on the strategic development of WH Smith will be summarised and an outlook will be given in the concluding chapter six.

2 Analysis of WH Smith’s Internal Capabilities

Being one of UK’s largest retailers of books, stationary, and newsagents, WH Smith has a strong internal structure. WH Smith’s strengths are due to the presence of the company based on company history, organisational structure, financial strength, retail locations, values, and other administrative goals and ethical strategies. These attributes describe the main resources and competencies of the company while also explaining the strengths in the SWOT analysis. WH Smith has seen successes in both High Street stores and even more success in its travel outlets throughout the world.

Having a history of over 200 years, WH Smith continues to increase market share throughout these difficult times. The company employs over 17,000 people and has over 1,000 retail outlets worldwide. The corporate strategy concerning management takes on a hierarchy style including a main board (executive and non-executive board), the board committees, which analyse company results, nominations for new members and policies and finally the management team, which is responsible for the delivery of business performance targets (WH Smith, 2009d). Along with this leadership and the work of over 17,000 employees, this large labour force has led to the organisation and decrease of operational costs. Although the High Street stores may bring in more revenue in general, specifically from 2004 to 2008 the revenue gained from WH Smith travel outlets is increasing as well (Figure 1 below) (DowJones, 2009). A 22.2 % increase with this division was recorded from 2007 (DowJones, 2009). A major contribution to this augmentation is the many acquisitions of travel retail stores throughout the world and merger of Post Office locations in many WH Smith stores (DowJones, 2009). Overall, the strengths of WH Smith are its wide recognition and comprehensive retail operations in the UK, strategies of ensuring customer orientation, the determination of positive results, accountability within the organization, and respect for its employees (WH Smith, 2009e). On the other hand, the core weaknesses of the company are its geographical location (trend away from high street shopping), little international attendance in foreign markets (which could be a barrier in the future for current increased revenues) and poor distribution chains (Datamonitor 2009).

Figure 1 - WH Smith Financial Performance (2005-2009)

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Source: WH Smith (2009c)

With regard to WH Smith’s administrative goals of ethical strategy, being a supporter of environmental recycling and pollutant solutions is an important role for the company to take in the perception of the customer. This presents the company more responsible in its operations adding Corporate Social Responsibility (CSR) as another of its capabilities (WH Smith, 2009f). The company also believes in positive direct relationships with buyers and suppliers. GXS Managed Services is a company that has contributed to the better communication of WH Smith with its suppliers by e-communication, allowing for updated stock reports from sales floor to supplier daily (GXS, 2007). Having a relationship with suppliers and e-commerce agents such as GXS also allows both


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Analysis of WH Smith's Retailing Strategy
University of St Andrews
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Analysis, Smith, Retailing, Strategy
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Robert Stolt (Author), 2010, Analysis of WH Smith's Retailing Strategy, Munich, GRIN Verlag,


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