Iceland Foods Ltd has more than 300 suppliers and sources many of its products from Southeast Asia, where there are highly skilled production companies that can produce the quality of foodstuff that the buying team requires at a price that enables Iceland to offer value to its customers in a highly competitive marketplace. 

Iceland Foods Ltd has grown from a single retail store selling frozen foods in Oswestry (Shropshire, UK) in 1970, to a national retail chain with more than 1,000 retail locations, 30,000 employees and a turnover in excess of £2.7 billion. The food retail marketplace is challenging, and Iceland has faced aggressive competition from major grocery retailers such as Tesco, Sainsbury’s and Morrisons, from limited-range discounters Aldi and Lidl, and from a variety of retailers such as Marks & Spencer (M&S). But Iceland has managed to withstand attacks on its position by maintaining its competitive price proposition through its product ranges. 

Part of Iceland’s competitive armoury is its innovative food ranges; sometimes over 120 new products are introduced in one year. One of its most important ranges is its seasonal party food. Iceland was the first firm to introduce large platters of Christmas party food, but its competitors have been quick to follow into this product territory. Each year, Iceland’s buying team works with suppliers to produce new products to reflect changing tastes and market demand. New ranges include sushi platters, exotic mini-soufflés and new vegetarian main courses. Many of the party ranges include Chinese and Indian foods and snacks and are sourced in China.....

Questions:

1. Discuss the extent to which Iceland’s buying team fits the conceptual model of a DMU. 

2. Build a case report that shows the importance of the buying function at Iceland and highlight the potential impact of wrong buying decisions. 

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Iceland 146 KU Now