12/18/2015
12/18/2015
Project International Business IBMS-1
Final Report
Project International Business IBMS-1
Final Report

Ahnaíssa Christiaans Esmay Zoontjes Jost Pannhausen Thomas Kodden

Ahnaíssa Christiaans Esmay Zoontjes Jost Pannhausen Thomas Kodden

|| Project International Business IBMS-1 ||
Final Report

Ahnaíssa Christiaans
Esmay Zoontjes
Jost Pannhausen
Thomas Kodden

Magdalena Sztych - de Vries
Saxion University of Applied Sciences
Enschede, The Netherlands
18 December 2015

Preface

This assignment is written by four first year students of the IBMS course at Saxion Enschede.
This final assignment will cover the overall recommendations and evaluation for the export plan of Albert Heijn supermarket stores to Austria. For this assessment we have overviewed the internal analysis and external analysis, the external analysis being the macro environment and meso environment. There was also the SWOT analysis with the confrontation-matrix. This all has been used to conclude the entry strategy and introduction plan.

Ahnaíssa Christiaans, Esmay Zoontjes, Jost Pannhausen & Thomas Kodden
December, 2015

Table of Contents

Preface 1 Executive Summary 3 Introduction 5 1. Internal Research 6 1) Markets 6 2) Strengths & Weaknesses 6 2. External Research 7 1) Macro Environment 7 2) Filtering Process-1 9 3) Meso Environment 9 4) Filtering Process-2 11 5) Opportunities & Threats 11 3. SWOT, Export strategy & Introduction plan 11 1) SWOT Analysis & Confrontation Matrix 11 2) Constructed Strategies 12 3) Best Choice of Strategy 12 4) Entry strategy & Introduction Strategy 14 5) Marketing Mix 14 6) The Metrics 16 Conclusion 17 Bibliography 18 Appendices 19

Executive Summary
This report is made to determine which country the most attractive is for exporting Albert Heijn supermarkets. Different analysis and research was made to conclude the best country and the best strategies.
For the internal analysis the company Ahold and Albert Heijn were assessed. 10 research question were made and answered, information about the products & markets also the history were mentioned. From this the main strengths and weaknesses of the company were concluded.
For the External analysis there were two main factors that were used to do research, these being the macro and meso environment. With the macro analysis the main criteria for researching was 3 research question for each element of the DESTEP analysis. With this analysis done it was decided that Australia and South Africa were not to be chosen as the main countries to export new Albert Heijn stores to. This was due to the unattractiveness of different aspects there these being the locations, difference in currency, healthcare and lack of technology advancements. The potential countries of Austria and Finland were much more attractive to be chosen as the target countries for new Albert Heijn stores. Mostly based on the increase in population, equal distribution between incomes and care for the environment.
With the meso analysis the main criteria for researching was 10 research question based on porters five forces. This analysis was used to determine the opportunities and threats the local industry offers to Ahold and Albert Heijn. From this it was concluded that Austria would be the ideal target country and Finland was not. Finland was not chosen due to the fact that there were clear market leaders with high market shares there. Austria on the other hand showed great potential for new market, with no clear leader in the online shops for groceries.
For the last parts of the research there was a SWOT analysis done with a confrontation matrix, FOETSIE analysis, the overall entry strategies and introduction plans were constructed.
From the SWOT analysis with the confrontation matrix the main strategies/issues were chosen, these being O1-S3, O3-S1, and O1-S1. Then there was the FOETSIE analysis done based on these 3 Issues, with Direct Investment being the best choice for the entry strategy. The strategies of Differentiation and Customer Intimacy were also chosen to be the main strategies of Michael Porter and Treacy & Wiersma.
The product range of Albert Heijn will consist of A brand products, the Albert Heijn house brand which has the same quality as A brand products and the AH basic products. The basic products will differ from the AH home brand products and are going to have a lower quality. The price of the products will be divided into 3 steps. The A brand products will have the highest price of the products, products of the house brand of Albert Heijn will be charged with a lower price than the A brand products while they still have the same quality. The lowest price for products will be charged for the AH basic products which are supposed to be at the same price level like products from discount supermarkets. Next to normal products which can be found in every Austrian supermarket Albert Heijn will also offer several Dutch products like the ‘Frikandel or Kroket’. Beside the physical stores which are opened in the 5 biggest cities of Austria, Albert Heijn is also going to offer a web shop and offers delivery within the cities where Albert Heijn is present.
Within the first two years the turnover should be high enough to cover all running costs of Albert Heijn. After those two years it estimated that profits should be slowly generated, this is done by expanding the business of Albert Heijn to other cities in Austria. The turnover of the online web shop should be at €25 million by 2019. After the 2 year introduction phase a total market share of 5% is anticipated. ---------
Introduction

With the help off all the assignments which had been done in the last weeks. The final report can be made in which we put all the assignments together to formulate the best advice for exporting Albert Heijn to Austria.

With the central research question being “what is the most attractive country for the company of Ahold for exporting the product Albert Heijn to and which way of entering the market in this country is the most adequate?”

The first chapter is about the internal research of Ahold and Albert heijn.

The second chapter is about the external research of the 4 countries which had been chosen in the beginning of the project. This external research will be defined by the macro analysis and meso analysis.

For the macro analysis the DESTEP method is used. For each of the letters of the DESTEP there are 3 research questions made. With the conclusion of the macro analysis the 2 countries had been dropped out.

The meso analysis is about the 2 countries which are left. In the meso analysis the Suppliers, distribution channels, consumer prices and the competitors will be researched. With the meso analysis the opportunities and threats of the two countries were concluded.

After the macro and meso analysis the 6 best opportunities and threats of the macro and meso have been chosen. With the help of these 12 opportunities and threats the conclusion will be the country were Ahold will start with the export.

The third chapter is about which entry strategy the best suited is for entering new markets in Austria.

The first step being the complete SWOT-analysis, with the confrontation matrix. The second step being the FOETSIE-analysis, assessing the factors of confrontation matrix for this. The third step being the overall entry strategies containing the information about the strategic consequences, Marketing strategies, Marketing mix and the operational plan.

1. Internal Research
For the internal research 10 research questions were made and answered for this analysis, as shown in Appendix1*. 1) Markets
Ahold was founded in 1887 as Albert Heijn and belongs today to one of the world wide biggest retail businesses. The mission of Ahold is to become the world's best and most successful food provider
Ahold has a total net sale of €32,794 million and free cash flow of €1,055 billion. Albert Heijn itself had a market share of 11.4% (2014) in the Netherlands. The company itself is divided into different geographic divisions which are Ahold Netherlands (covering the Netherlands, Belgium and Germany), Ahold Czech Republic and Ahold USA.
Albert Heijn is the current market leader for grocery retailing in the Netherlands and most likely applying the market leader strategy. They use different kinds of marketing strategies; increasing customer loyalty, broadening the offering, expanding geographic reach and responsible retailing. When it comes to Responsible retailing the focus is on Healthy living, Community well-being, Responsible products and Care for the environment. Ahold goes for the quality of the product, which resulted into higher prices because of higher costs, but they manage to still have the loyalty of the middle class, because it is affordable; a good quality/price ratio. Their promotion is recognizable; Ahold incorporates the same elements in every commercial per brand, which means that the customer automatically knows about which company the promotion is. Albert Heijn is in almost present in every town in the Netherlands, and still expanding. If by any change there is not an Albert Heijn nearby there is always the online shop, which Albert Heijn has recently introduced. The core competencies of Ahold are the long experience in retailing and expanding their geographic reach. Furthermore Ahold has developed a successful concept which makes them market leaders in different segments and makes them to one of the world biggest retailing companies.
Aholds capabilities for international business are already shown with the three segments they work in. Ahold the Netherlands, which is active in the Netherlands, Belgium and Germany, Ahold USA and Ahold Czech Republic. They have also recently began with exporting online web shop of Albert Heijn to China.
Ahold has already taken some innovative measures to improve their overall services. Ahold offers different web shops and delivering services for their supermarkets. Ahold has supermarkets who have already began experimenting with self-scanners. They also have Albert Heijn who has their own app for customers which allows them to shop faster by guiding the costumers the fastest way to the products on their shopping list. 2) Strengths & Weaknesses
S1. Products of Ahold and Albert Heijn are internationally known, S2. Lots of experience in retail, S3. Ahold is not afraid to enter new markets, S4. They are financially very stable, S5. Digital connected.
W1. The company Ahold itself is not really known to consumers, W2. By growing too fast they may have the risk of losing track of their original visions for their business, W3. Risky investments, W4. Danger of less innovation and no new ideas, W5. Economic dependence.

(Christiaans, A., Kodden, T., Pannhausen, J. & Zoontjes, E., Assignment3, November 2015)

2. External Research
Before starting with the DESTEP analysis of the macro environment of Austria, Finland, Australia and South Africa several research questions had to be formed which should be answered in the analysis. For each letter of DESTEP 3 research questions were created which means a total of 18 questions, as shown in Appendix2*.
By analyzing the meso environment of Austria and Finland with the help of the 10 research questions based on Porters five forces that can be found in Appendix3*, this report will identify the opportunities and threats the local industry offers to Ahold and Albert Heijn. 1) Macro Environment
Austria has a population of 8.584.926 people with a steady growth rate of the past 8 years which is expected to continue in future. In 2013 about 20% of the total population of Austria was younger than 20 years, 61,8% of the total population was older than 20 years and younger than 65 years old. 18,2% of the population was older than 65 years old. It is expected that all age groups will shrink in future except the age group 65+ which is expected to grow. As visible in the Appendix4* from the map, it shows that only 6 areas in Austria are densely populated. Around those six areas are mostly immediate density areas. The biggest city of Austria is its capital Vienna with 2.4 million people. In 2014 there were 8.415.000 private households with an average of 2,23 persons per household. The biggest household group with 26,7% consisted of two persons, the other household combinations are visible in Appendix5*. In 2014 the GDP amounted to €329.296 million which is an increase of 0,4% compared to 2013. The inflation was 0,7% in September 2015. It is expected that the inflation will be at 1,7% in 2016 while the wages for employees will raise by 1,7%. Appendix6* shows an illustration of the inflation during the past years. During the next years it is expected that the unemployment rate will grow, in September the unemployment rate was at 5,7%. In 2013 women had an average income of €19.460 which is only about 60% of the income which men earn (€31.961). Also there is a big gap between the poor and rich, the top 20% of the population earns about 4 times as much as the bottom 20%. According to the OECD well-being index the overall life satisfaction of Austrian people is rated with 8,2 points (10 highest, 1 lowest). About 74,0% of the population were Roman Catholic, 5,0% Protestant and 4,0% Muslims and 9% of the people are living a vegetarian lifestyle. As visible in the Appendix7* huge parts of Austria are connected to the Internet. In 2015 82% of the households had access to the Internet. More than the half of the population has used the internet recently to purchase something online (from clothes to journeys and newspapers). About two-third of the population stated that they are checking that the products they are buying is from their local region. About the half stated that they were only buying fruits and vegetables which were actually growing in the current season. In the Corruption Perceptions Index Austria scored with 72 points (from 0 to 100) at place 23 of 175 countries. 2) Filtering Process-1
The DESTEP analysis of all four countries and the identified opportunities and threats lead to following conclusions of each country if they are potential candidates for the introduction of Albert Heijn in the local market
Australia was not attractive enough to export to because of the lack of different aspects. The main factor that Australia was not found to be an attractive market place was because the location is very far from the popular regions. The regulations and costs are preventing actual profits. The different currency is also a point because of the unpredictable exchange rates.
South Africa was not attractive enough because of the outbreaks of some terrible diseases. By technology South Africa is not developing very fast. For example in South Africa there are a lot of people who live in the rural areas. In these rural areas there are not very much people with an internet connection. In South Africa there is a lot of unemployment, there are high crime rates and a lot of poverty.
One of the potential countries to export Albert Heijn to is Austria. The population of Austria is increasing because of the increasing population more food is used. The downsides of Austria are the extra health costs and the increased prices. Austria is visited a lot by foreign people because of the mountains for the winter holiday and Austria is situated in the middle of Europe, being a transport country is it also beneficial to introduce an Albert Heijn because a lot of these people know Albert Heijn.
The other potential country for Albert Heijn is Finland. Because of the equal distribution of the incomes. And the incomes are quite high which means that the Finnish people can afford the products of Albert Heijn. Caring for the environment is very important for Finland this is also a main factor for Ahold. 3) Meso Environment
Austria
In 2014 the turnover of the retailing market amounted to €61.070 million* which is slight increase compared to 2013. The online retail sector is slowly evolving but has still low margins. It is expected that the online business will grow by 26% to €123 million in 2015. Consumers are facing high food prices, especially since the introduction of the Euro in Austria the food prices increased by 11,7% in average, this can be found in Appendix8*.
A survey of Ipsos Belgium shows that with 44% the most of the fresh fruit and vegetables is bought in convenience stores. For non-alcoholic beverages the discount stores and the convenience stores were most popular. 44% of the meat was bought in supermarkets, this can be found in Appendix9*. Recent surveys have shown that Austrians prefer more fresh fruit and local products. Also it is visible that a new trend is developing making the former old Austrian traditions popular again, especially among the younger part of the population.
Even though the birth rate is decreasing, the sales for child products are increasing. The popularity of weight-management products is constantly increasing as large parts of the Austrian population are considered as overweight or obese. The current trend goes more over to fast results in weight-loss than to a make permanent changes and maintaining a healthy lifestyle.
As the population is ageing more and life expectancy is increasing, the rate of seniors is increasing likewise. But instead of withdrawing from society they are maintaining active lifestyles and follow popular trends. Also Austria is gaining more and more international interest from foreign students and international businesses. This leads to an increasing foreign population inside the popular cities like Vienna. This migration trend is diversifying the society and developing new needs and wants. The consumer prices are increasing over the past years from 83.2 in 2002 till 113.5 in 2015. The prices for food and non-alcoholic are increased by 11.7%, the prices for milk, cheese and eggs are increased by 11.9% while the prices for meat and meat products are decreased by 9.8%, as shown Appendix10*.
To start a company in Austria many steps have to be taken. There are high switching costs due to the fact that investments have to be made in buying stores, a tailored concept for Austria and building a distribution channel, furthermore the minimum capital requirement is €5000 ,-. Several registrations at public authorities and trade chambers are also necessary.
The bargaining power of buyers is high, because they have a lot of different supermarkets/grocery stores to choose from and can easily switch from one company to another. The suppliers do have little influence on the prices of their products as the market is dominated by two big companies, Rewe International AG and Spar Österreichische Warenhandels AG. The current market leaders are Rewe and Spar with market shares of 28,3% and 27,9% respectively. Due to the small price differences between both companies the consumer switching costs are low, can be found in Appendix11*. 4) Filtering Process-2
After comparing the opportunities and threats of both countries with it each other it was concluded that Austria will remain as the only country and that with Finland will be left out.
Finland was not chosen because of the fact that there are two very clear market share these market leaders have a total market share of 75% and the market leaders offer supermarkets in every segment. It will be hard to enter and gain market share on the Finnish market. There is already a successful online grocery store. And the barriers in this industry are very high. It is not advisable to continue with this country.
Austria was chosen because of the given opportunity that there is no nationwide online shop for groceries, which is a specialty of Albert Heijn. The Austrian people are very careful with online shopping of groceries because they are not able to inspect the products. Albert Heijn can use this by proving that they offer good quality products. So Albert Heijn will become the face of good quality online shopping. And with the different products Albert Heijn can be representative in different segments and for people with different incomes 5) Opportunities & Threats
Austria
O1: Online market, O2: Own brands, O3: Local products.
T1: Taxes, T2: Inflation, T3: Population growth.
Finland
O1: Financial, O1: Growth rate, O5: low power of suppliers.
T1: Market Leaders, T3: Power of buyers, T4: High entry barrier.
(Christiaans, A., Kodden, T., Pannhausen, J. & Zoontjes, E., Assignment4a-4b, November 2015)

3. SWOT, Export strategy & Introduction plan 1) SWOT Analysis & Confrontation Matrix
Strengths
S1: The Company is financially very stable
S2: Ahold is not afraid to enter new markets
S3: Digital connected
Weaknesses
W1: By growing too fast they may have the risk of losing track of their original visions for their business
W2: Risky investments
W3: Danger of less innovation and no new ideas
Opportunities
O1: Online market
O2: Own brands
O3: Local products
Threats
T1: Market leaders
T2: Low market growth potential
T3: Economic stability
(Christiaans, A., Kodden, T., Pannhausen, J. & Zoontjes, E., Assignment6, November 2015)
For the confrontation matrix the SWOT-elements were graded according to numbers, with 1 being negative and 5 being positive. This can be seen in Appendix12*. From this confrontation matrix the following issues/strategies were chosen as the best ones.
O1-S3.
Online market and digitally connected. Albert Heijn already has a lot of experience in online grocery retailing. They are already operating a successful online webs hop for food products in the Netherlands. The Austrian online market for grocery products shows a growth potential while there is no big company operating over the whole country. The deliveries and offerings are only restricted to certain areas and cities. This gap could be filled by Albert Heijn as they are already having the necessary experience in online retailing. O3-S1.
Local products and financial stability. These are connected with each other as the sourcing of local suppliers for products requires many resources in the beginning before any profits can be made. Being able to cover those expenses at the beginning resources provided by Ahold are necessary.
O1-S1.
Online market and financial. Opening an online shop in a foreign country still requires money and resources which have to be provided. A website in the German language has to be designed and established. Furthermore warehouses have to be built or rent as well as employees which have to work there. Also employees, who offer customer support, take care of the accounting as well preparing orders. All this requires start capital which has to be provided by Ahold in order being able to start the business. 2) Constructed Strategies
For the basic competitive strategies of Michael Porter, the strategy of Differentiation was chosen. This is when a company concentrates more on creating highly differentiated products and marketing programs, while doing so they come across as industry class leaders.
Albert Heijn is greatly known for their high quality of products making them the main market leaders in the Netherlands, with this in mind they intend to implement the same values in Austria as well.
For the basic competitive strategies of Treacy & Wiersma, the strategy of Customer Intimacy was chosen. This refers to a company that provides superior value by segmenting markets and tailoring products or services to match the needs of the targeted customers. The main targets of Albert Heijn are mostly individuals with average to high incomes, these individuals usually expect products of high quality. Albert Heijn has high standards when it comes to sustainability and working to improve the environment, this shows they have high interest in the well-being of individuals around. 3) Best Choice of Strategy
From the former confrontation matrix three possible strategies were chosen. With the FOETSIE analysis we can assess which one of these strategies the best one is for the later implementations. Each letter of the FOETSIE has different meanings, these being the elements to be researched. There is -F being the financial criteria, –O being the organizational criteria, -E being the economical part, -T being the technological elements, -S being the Social elements, -I being the juridical part and –E being the environmental part.
Financial
* Q3 2015 Net sales of €8.440 million in total, profit of €2.294 million after taxes * Big investments in the acquisition of Spar Czech Republic during 2014/2015 * Distribution center has to be built in Austria
Organizational
* Staff who speaks German has to be hired * Promotion adjusted for the Austrian market has to be created * Austrian culture has to be more researched in more detail * Technical staff for the web shop has to be hired * Staff in stores has to be trained for customer service
Economical
* Investments in building up distribution channels and centers * Online shop: * high transportation costs to customers as every order has to be delivered separately * High storage costs as the products have to be always available * Payment for staff; technical staff, staff working in the warehouse, customer support, accounting, employees processing the orders * Physical stores: * Stores have to be rented/bought and have to be equipped * Extra staff for the stores is required * Cashiers
Technological
* Online shop * Website has to be coded, secured and a payment system has to be established * Quality control system required (monitoring the dates and temperatures) * Order system with the small local suppliers has to be designed * Stores * Stores have to be linked with the internal company network * Cashless payment methods have to be installed at the cash register * Alarm systems for the stores to prevent theft
Social
* Democratic management style to lead employees * Intermediaries * ICT company for the web shop * Transportation company to transport the goods from suppliers to the distribution center * Transportation company to transport the goods from distribution center to shops and customers * Suppliers (foreign and local)
Juridical
* Corporate form of the company has to be chosen * Online shop * Terms and conditions for customers buying there * Copyright of the website * Privacy protection and how the data is used which is collected by the website * Contracts with transportation companies * Contracts with suppliers containing prices, delivery conditions, terms of payment and possible penalties * Agreement with credit card companies for cashless payment in stores (American Express, VISA, MasterCard)
Environmental
* Aholds’ code of conduct has to be applied * Values of Ahold have to remain. Offering healthy products and caring for the well-being of the customers * Online shop * To create less pollution a transportation system with low emissions should be created * Caring for the environment by creating less waste and emissions (installing appliances with low power consumption, energy generated from renewable sources, offering environmental friendly shopping bags)
(Christiaans, A., Kodden, T., Pannhausen, J. & Zoontjes, E., Assignment6, November 2015) 4) Entry strategy & Introduction Strategy
Direct investment was chosen to be the most favorable entry strategy for Austria. With direct investments it is meant that a company in is going to open their own headquarters in a foreign country. Albert Heijn is known to be the only supplier of their own products, this will not change when opening a new store in Austria. With the direct investment of Ahold it is guaranteed that they will not lose control of the management of the company. Decisions can be made faster without influences of other companies or decision makers.
As for the intermediaries they can make use of services related to the promotions/advertisement, for finding the right suppliers and financial advice.
Distribution channels that would be used are mostly for the web shop and the actual supermarkets of Albert Heijn. 5) Marketing Mix
Product
The product range of Albert Heijn will consist of A-brand products, the house brand of Albert Heijn, the discount brand AH basic. The A-brands are noted by the customer as products of high quality and high prices and with a familiar brand name. The customer knows what kind of quality he is buying and has certain expectations and developed feelings towards the brand. Several and famous A-brands will be offered at Albert Heijn like Coca-Cola, Iglo (frozen food products like fish), Nestlé products and Unilever. Those brands are only a few of the total A-brands which are offered. The house brand of Albert Heijn will have the same quality like the A-brand products which are offered. The only difference to the A-brands is that those products will have the AH brand logo on the packaging.
The AH products in the Netherlands are known for their good quality and the Dutch customer knows what to expect when he buys the AH brand, the same should be reached with the Austrian customer to increase the reputation of the AH brand and Albert Heijn itself. The AH basic products are products of lower quality than the A-brand and AH products. Like the AH products those products will only be exclusively sold at Albert Heijn and no other stores. Next to those three product categories Albert Heijn will also offer fresh fruit, vegetables and meat. The special thing about those products is that they are all supplied by local farmers, if possible. Special products like pineapples, melons or bananas have to be imported from other countries as the climate in Austria is not warm enough so that those fruits can grow there. The aim with the local products is to support local farmers but also to preserve the environment by creating less waste and emissions which might occur during long transports. Also due to the short transportation ways it is ensured that the customers will receive the best possible quality and fresh products.
Price
The product prices at Albert Heijn will be divided into three categories like the products. The prices for the A-brand products will be at the same level like at the competitors. Due to the high bargaining power of the customers higher prices cannot be enforced. For considerable lower prices Albert Heijn is at the beginning too small to start price wars with the competitors, this might be possible if Albert Heijn is well established after a few years. The AH products will be sold at a considerable lower price than the A-brand products even though they offer the same quality. The lower prices for the AH products were decided because of the fact that the brand AH is unknown to the Austrian customers. They are not having any expectations and attitude towards the product. Also they do not know the quality of the products will in doubt they will chose the already known A-brand product. With the lower prices it is hoped that the AH brand will become a term for good quality at a lower price than A-brand products. The third and last price step will be for the AH basic products. Those products offer the lowest quality of all three categories and will therefore be offered at the discount price level. Those basic products do come with an average quality, but considerably lower compared to the A-brand AH products. The lower price should attract also customers with lower incomes, but the offered range of AH basic products will be smaller and the focus is on the two other price ranges. Fresh fruits, vegetables and meat will be sold at a higher price compared to products from the frozen segment. This is justified because of the fact that the products are bought from local suppliers which usually charge higher prices than the big farms distributed over Europe. Compared to this the products will also have a much higher quality, especially considering the fact of freshness which is offered.
Place
When starting up Albert Heijn will open their stores in the 5 biggest cities of Austria, these being: Vienna, Graz, Linz, Salzburg and Innsbruck. Albert Heijn will open stores in these cities because most of Albert Heijn’s potential customers live in these cities. Besides the physical stores there will be online web shop of Albert Heijn which will offer deliver services within these cities.
Besides delivering of products at home customers can also choose to pick up their product at one of the pick-up points which are in the stores. The stores will be placed at near the city center on a place where there is enough parking space for people who come by car.
Promotion
To make the Austrian people aware that new Albert Heijn stores are coming to Austria, Albert Heijn is going to make a commercial where Albert Heijn focuses on the domestic products. For this promotion Albert Heijn will go to some local farmers to take pictures and write a story about them as Albert Heijn’s suppliers. Due to the high interest in domestic products of the Austrian people this would be a good idea to get their attention. Besides that Albert Heijn will also handout folders/flyers in the cities where Albert Heijn will open their stores.
In these folders Albert Heijn will introduce their selves what does Albert Heijn stand for, which products does Albert Heijn offer and the products which are for sale the coming week. For introducing people to the brand new stores of Albert Heijn, Albert Heijn will offer a promotion that the first 100 customers who buy more than €25 of products will get a free box with some products from the Albert Heijn’s own brand. The AH bonus card will also be offered to the customers as a form of promotion, these cards function in giving discounts to customers owning them. Furthermore information about the opening of the new stores will be promoted in local newspapers maybe on billboards and in the local media.
For the time-planning of these activities based on the marketing mix, it is estimated that the implementation will take no more than ten to twelve months, the overall process will start next year.
Firstly there is the registration and finalizing of all legal documents or contracts of the new supermarkets, this should be done by the month of March-2016. As for the legal documentations for the web shop of Albert Heijn, this should also be done by the month of March-2016. Secondly we have the find the right location within these 5 main cities and finding the right buildings to be transformed into supermarket stores. This should be finalized by the month of June-2016. Thirdly there is the scouting of the suppliers and distributors for the products of Albert Heijn. This should be done by the month of September-2016. Fourthly, all kinds of promotions have to be send out to the local individuals living around these soon to be opened Albert Heijn stores. This should be finalized by the end of October-2016.
Fifthly, there is the hiring part of the soon to be employees of Albert Heijn. These employees differ from being the ones who will work as cashiers, working for the delivery services and even management. All these individuals will have to have to proper training of the Albert Heijn ways of management. This should be done by the month of Ocober-2016. Sixthly, the stores will have to get stocked with all the products that are going to be available for the costumers, this should be done by the end of December-2016. The online web shop of Albert Heijn should also be done by the end of November-2016.
Finally, the supermarket stores of Albert Heijn and the online web shop are to open in December.
As for the visions and values of the new Albert Heijn Stores, these would stay the same as for all Ahold’s companies. Their vision is to offer better choice, better value and a better life to all -stakeholders, -customers, -associates, -suppliers, -shareholders and the communities they serve. “A Better choice, A Better value, A Better life, Every day”. Their values which can be seen in Appendix13* being the same for every company of Ahold that defines who they are, what is of importance and how they work to improve their businesses.

6) The Metrics
The current online market in Austria reached sales value about €98 million, it is estimated that the sales will amount to €250 million in 2019. With these estimated figures it is planned that the turnover of the online business of Albert Heijn in Austria will amount to €25 million. In the Netherlands the turnover of Albert Heijn amounted to €10,642.8 million, they had 934 outlets which makes an average turnover for each outlet of €11, 4 million. During the first 2 years of business in Austria the turnover supposed to be high enough to cover the overall expenses. After these 2 years profits should be slowly generated by expanding the business to other cities and increasing the range of available stores in Austria. The current market share between to two main market leader Rewe and Spar in Austria amounted to 22.2%. Considering the high market shares by the main market leaders, a market share of 1% within the first 2 years should be realistic. After those 2 years and with a starting expansion of the Albert Heijn stores to other regions in Austria they can obtain a market share of about 5%, which is meant to be steadily maintained.

Conclusion
Ahold is always looking for opportunities in entering adjacent markets. They are ambitioned on focusing the current and surrounding markets and evaluating new markets. In the evaluation process of finding new markets in Europe, the Austrian market was found to be the most attractive and appealing country from the other four countries chosen.
Like every other country worldwide Austria was hit by the economic crisis too but is slowly recovering again and the GDP started to rise again over the past years. With a GDP of €38.090 per capita Austria can be considered as prosperous country. Austria has two clear market leaders, Rewe Group and Internationale Spar Centrale B.V. It is expected that the retail market will continue to grow slowly over the next years.
As Albert Heijn is in the Netherlands already known for the good quality and their fresh products, it is aimed that this image will be preserved in Austria. The current consumer trend for local products is a great opportunity to build up this image in Austria too. Due to the short transport ways of those local products, the quality is ensured.
In the beginning it would be suggested to open stores in the 5 biggest cities in Austria. Besides the physical stores which will be opened, Albert Heijn will also offer a web shop which offers same day deliveries within the cities Albert Heijn is present. Besides the deliveries also a pickup in the stores will be offered. After some time, when Albert Heijn has established itself in the cities the expansion of the business will start. Meaning slowly more and more stores would be opened in the launch cities. After this phase the completed will be completed across the city borders would start and Albert Heijn will be able to start expanding its business to other cities as well.
As investment form it is suggested to choose the direct investment. This has the advantage that the company and business will remain under full control of Ahold. The values and core competencies of Ahold can be passed on to the new company in Austria enabling to implement the successful strategy of customer service and product quality making success in the new market possible.
In Austria there are two clear market leaders which have already established a high market share in Austria. The retail market in Austria is only showing a small growth potential, thus obtaining a decent market share will be hard. The Austrian population scores high on the Uncertainty Avoidance Index, which means that the customers will likely not change their way of grocery shopping.
Entering Austria by the means of an online shop is not that profitable, due to the fact that the current online market is very small at this moment. Even though there is a big growth potential concerning the online market, it is only in a low volume. Again seen in the high score on the Uncertainty Avoidance Index, the population likes to see and check the products they are buying. These investments are expensive due to the high entry barriers, which are established around the retail market in Austria.
Due to these facts it is not recommended to export Albert Heijn to Austria.

Bibliography
Kotler, P., Armstrong, G., Harris, L. C. & Piercy N., (2013). Principles of Marketing. 6th European Edition
Ahold Reshaping Retail 2014. Annual reports 2014. Retrieved from https://www.ahold.com/#!https://www.ahold.com/Financial-information/Annual-reports.htm
Christiaans, A., Kodden, T., Pannhausen, J. & Zoontjes, E. (November, 2015). Assignment 3

Christiaans, A., Kodden, T., Pannhausen, J. & Zoontjes, E. (November, 2015). Assignment 4a
Christiaans, A., Kodden, T., Pannhausen, J. & Zoontjes, E. (November, 2015). Assignment 4b
Christiaans, A., Kodden, T., Pannhausen, J. & Zoontjes, E. (November, 2015). Assignment 4c

Christiaans, A., Kodden, T., Pannhausen, J. & Zoontjes, E. (November, 2015). Assignment 6

Appendices
Appendix 1. | Research questions | Company Profile | 1. How can Ahold be described? | | 2. What is Ahold’s history? | | 3. How is Ahold segmented? | | 4. Which overall brand does Ahold offer? | | 5. What is the global position of Ahold? | Capabilities and innovativeness | 6. How capable is Ahold and Albert Heijn of international Business? | | 7. Is the company financial capable of expanding? | | 8. How does Ahold and Albert Heijn incorporate innovative measures? | Marketing aspects | 9. What kind of marketing strategies does Ahold use? | | 10. How does Ahold and Albert Heijn incorporate the 4 p's of the marketing mix in their business? |
Appendix 2. DESTEP Research Questions | Demographic | 1. How is the population distributed? | | 2. What is the current trend of the population growth? | | 3. How are the households structured? | Economic | 1. How is the general economic situation inside the country? | | 2. How are the incomes distributed? | | 3. How high is the inflation? | Social-Cultural | 1. How does religion affect consumer behavior? | | 2. What are the current lifestyle trends? | | 3. How high is the welfare in the country? | Technological | 1. How is the Technological infrastructure? | | 2. What is the Technological trend? | | 3. What is the Technological development? | Ecological-Natural | 1. How much do people care about the environment? | | 2. How does the government protect the environment? | | 3. How well is the infrastructure of the country? | Political | 1. What kind of protectionism are currently present? | | 2. How strict are the laws for taxes? | | 3. What is the level of corruption in the country? |
Appendix 3. | Research questions | Current markets and distribution | 1. How big is the current market volume | | 2. What are the current market trends? | | 3. What distribution channels are currently used? | Consumers | 4. What are the consumer price? | | 5. What is the buying behavior of the consumers? | Porter’s 5 forces | 6. What is the threat of new entrance? | | 7. What is the threat of substitute products | | 8. What is the bargaining power of buyers? | | 9. What is the bargaining power of suppliers | | 10. How is the rivalry among competitors |

Appendix 4.

Appendix 5. Private Households 1985 - 2014 | Household type | 1985 | 1990 | 1995 | 2000 | 2005 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | Private households in total (in 1000) | 2,801 | 2,913 | 3,093 | 3,237 | 3,475 | 3,597 | 3,624 | 3,653 | 3,686 | 3,722 | 3,769 | Family households total | 1,969 | 2,034 | 2,144 | 2,202 | 2,225 | 2,266 | 2,268 | 2,274 | 2,278 | 2,286 | 2,307 | Single family households total | 1,889 | 1,955 | 2,067 | 2,141 | 2,160 | 2,199 | 2,205 | 2,211 | 2,213 | 2,219 | 2,243 | Pairs | 1,658 | 1,719 | 1,815 | 1,873 | 1,882 | 1,929 | 1,928 | 1,939 | 1,939 | 1,939 | 1,969 | without Children | 597 | 636 | 709 | 790 | 826 | 875 | 880 | 891 | 891 | 909 | 929 | without further persons | 562 | 603 | 670 | 755 | 793 | 843 | 850 | 860 | 861 | 879 | 900 | with further persons | 36 | 32 | 39 | 35 | 34 | 32 | 30 | 31 | 30 | 30 | 30 | with Children | 1,060 | 1,083 | 1,106 | 1,084 | 1,055 | 1,054 | 1,048 | 1,049 | 1,048 | 1,030 | 1,040 | without further persons | 968 | 996 | 1,033 | 1,018 | 996 | 997 | 996 | 1,003 | 1,000 | 980 | 991 | with further persons | 92 | 88 | 72 | 66 | 60 | 57 | 52 | 46 | 48 | 50 | 49 | Single parents households total | 231 | 236 | 252 | 268 | 279 | 270 | 277 | 272 | 273 | 280 | 274 | without further persons | 201 | 204 | 228 | 246 | 256 | 250 | 255 | 253 | 257 | 260 | 254 | with further persons | 30 | 32 | 24 | 22 | 22 | 20 | 21 | 19 | 16 | 19 | 21 | Fathers in single parents households | 29 | 34 | 32 | 35 | 43 | 39 | 39 | 39 | 40 | 45 | 44 | without further persons | 23 | 25 | 27 | 31 | 39 | 36 | 35 | 36 | 37 | 42 | 40 | with further persons | 7 | 8 | (5) | (3) | (3) | (4) | (4) | (3) | (3) | (3) | (4) | Mothers in single parents households | 202 | 202 | 220 | 233 | 236 | 231 | 238 | 233 | 233 | 235 | 230 | without further persons | 178 | 179 | 200 | 214 | 217 | 214 | 220 | 217 | 220 | 218 | 213 | with further persons | 24 | 23 | 19 | 19 | 19 | 16 | 17 | 16 | 13 | 16 | 17 | Two and more family households | 80 | 78 | 77 | 61 | 64 | 67 | 64 | 63 | 66 | 68 | 64 | No family households total | 832 | 880 | 950 | 1,035 | 1,251 | 1,331 | 1,355 | 1,378 | 1,407 | 1,436 | 1,462 | Single households | 768 | 814 | 893 | 977 | 1,198 | 1,279 | 1,300 | 1,322 | 1,345 | 1,368 | 1,395 | Male | 223 | 248 | 325 | 383 | 506 | 556 | 579 | 578 | 581 | 602 | 615 | Female | 545 | 567 | 568 | 594 | 693 | 722 | 721 | 744 | 763 | 766 | 781 | Multi-person households | 64 | 65 | 57 | 58 | 52 | 53 | 55 | 57 | 63 | 68 | 67 |

Appendix 6.

Appendix 7.

Appendix 8.

Appendix 9.

Appendix 10.

Appendix 11.

Appendix 12. | | Opportunities | Threats | | | O1 | O2 | O3 | T1 | T2 | T3 | Strengths | S1 | 2 | | 4 | | 1 | 2 | | S2 | 4 | | | 3 | | 1 | | S3 | 5 | | 1 | | | | Weaknesses | W1 | | | 2 | | | | | W2 | 1 | | 2 | 5 | 4 | 3 | | W3 | | 3 | 4 | | | |

Appendix 13.

©Made by

Ahnaíssa Christiaans
Esmay Zoontjes
Jost Pannhausen
Thomas Kodden