Couche Tard SWOT & PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Expansion plans in Cambodia, Saudi Arabia, Mongolia and Mexico: Cambodia is a good destination for business expansion. It is growing at a GDP of 8% over the last decade. Recently Cambodian government has also implemented policies attracting FDI. There is cheap labour rate along with a large sect of working age population. Similarly, in Saudi Arabia, one third of middle market businesses are expected to grow at 10% this financial year. Mongolian economy is also showing a strong growth prospective. Investment has contributed around 12.6 percentage points to the country’s GDP. Mexican economy is growing at a GDP rate of 2.6% YoY. An important agreement, The North American Free Trade Agreement (NAFTA), among United States, Mexico and Canada has been able to draw $1.2 trillion in trade. In fiscal 2018, Couche-Tard has made master license agreements with Cambodia, Saudi Arabia and Mongolia via their licensing program. It is also reaching a target of 1000 sites in Mexico.

2. Higher scope of growth in some potential markets: There is a huge market for conventional stores in North America. It has a strong market share in in-store sales. It is because of the faster availability of fuel and other consumer products and minimum purchase time. Convenience store market in Europe is also growing at the rate of around 5% annually. The U.K. also has huge growth potential in convenience store industry. The industry is growing at an annual growth rate of around 2.7%. In Asia-Pacific region, growth can be attributed to the presence of emerging countries like India and China. The company has no store in India that is limiting the company’s growth. Other countries include Japan and South Korea where convenience store market is growing at a rate of around 3.8% annually. Thus the scope of growth can be further improved by investing in zones where there are more trends of business growth.

3. Expansion through Mergers and Acquisitions: In the U.S., company is aiming to acquire competitors closed sites and improve its presence across the country. In Europe and Canada, market is dominated by a few large players including integrated oil companies. Some of these companies are planning to sell their retail business. Couche Tard is looking for such opportunities to invest and expand its business. It also follows that growth should be followed with increased profitability. It has also followed licensing agreements to expand its business internationally.

4. Opportunity and innovation in new food concepts: In Norway, company is focussing on new innovations in creating new designs inside the stores and introducing new menu options that will improve both quality and offerings. Across Scandinavia, Couche Tard is working to identify and explore new food concepts. It believes in utilizing these successful innovations on global scale across different locations through its network. The company’s efforts in the penetration of fresh-baked pastries and an on-site bakery program into Quebec have led to the 50% increase in their sales growth. Company has expanded the sales of hot beverage including Couche-Tard's Simply Great Coffee program in more than 2,700 stores. It keeps in mind the regional preferences and tastes of consumers. It also served other products such as iced cold brew and different bean blends, or white coffee. It has been able to target regions with its specialized offerings such as hot dog and coffee or its Hispanic offerings so as to satisfy the appetites of specific customers

Threat

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Political

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Economic

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Social

1. Consumer preference for local production There is always an inclination of locals towards its country made products and services. Around 97% of the local customers support the “Made in Canada” products. Most of the consumers (around 87%) also believe that home made products are better for environment. As consumers now themselves believe in environment safe products, they also believe the same in the companies that manufactures them. More than 50% take into account green factors when making purchasing decisions. They are also actively controlling corporate visibility using internet to research corporate practices. Many customers also search for home made products. Around 45% of them put efforts in searching for Made in Canada products. Quebec and Atlantic Canadians are mostly effort taking while selecting local products. 60% of the Canadians believe that they are ethical consumers. 75% believe that they will pay more for products or services from a socially responsible company. 90% believe that they will stop buying products of deceptive and irresponsible company.

2. Social culture impacting the economic stability of the country: The people of the country and their culture plays an important role in creating the healthy environment in companies. The culture and economic growth of a company are linked to each other. Earning capacity of people in developing countries like India, China and Africa are improving. Therefore, it leads to expansion in market growth in these developing countries. In countries like India where there are so many languages spoken, so many religions followed and so many customs are practiced, companies follow the assimilation of different cultures to improve operational excellence. Couche-Tard has its presence across U.S., Europe, Canada and 13 other countries. The operation of Couche Tard is dependent on the behaviour of the employees.

3. Opportunity and innovation in new food concepts: In Norway, company is focussing on new innovations in creating new designs inside the stores and introducing new menu options that will improve both quality and offerings. Across Scandinavia, Couche Tard is working to identify and explore new food concepts. It believes in utilizing these successful innovations on global scale across different locations through its network. The company’s efforts in the penetration of fresh-baked pastries and an on-site bakery program into Quebec have led to the 50% increase in their sales growth. Company has expanded the sales of hot beverage including Couche-Tard's Simply Great Coffee program in more than 2,700 stores. It keeps in mind the regional preferences and tastes of consumers. It also served other products such as iced cold brew and different bean blends, or white coffee. It has been able to target regions with its specialized offerings such as hot dog and coffee or its Hispanic offerings so as to satisfy the appetites of specific customers

Technological

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Legal

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Environmental

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