Case Analysis - Reed Supermarkets Essay

2. Reed’s strategy is to attract affluent customers by providing a wider range of superior selections. Because of the wide product selection, it is not able to keep operating expenses as low as Aldi and dollar stores (who have a limited product focus). Therefore, it is not at Reed’s advantage to enter into the area (low price strategy) where they don’t have a real competitive advantage.

In the United States, the food retail industry is absolutely massive. According to Statista, this industry brings in nearly 5.27 trillion dollars annually and 594.4 billion of that is from grocery store sales. In this market, the 20-ton gorilla in the room is Walmart, racking in nearly 20% of the entire market at around 118 billion dollars in 2013 according to the Harvard Business School case study. Following Walmart, Kroger and Costco own the biggest next largest slices bringing in 76 billion and 71 billion respectively. In this highly competitive market that has some of the smallest margins of any industry it can be tough to get ahead and even tougher to grow. However, Trader Joe’s has managed to pierce what was once a very small world

Supermarkets are one of the many components that contribute to the expansion of the U.S. economy. There are several chains of supermarkets in almost every state, but they cannot be all considered the same. For instance, Publix, Aldi, and Walmart are three of the most popular supermarkets in the U.S., and each one of them has something that its respective consumers value the most, which makes it unique and favorable for the competitors. Therefore, choosing value propositions that will differentiate them from the competitors are a major factor to consider in marketing. This is crucial for the growth of any business because the development of all enterprises lies solely on the effectiveness of its

Trader Joe's faces several threats to its business, as competitors try to invade the company’s niche and attempt to imitate the company’s core strategies. The supermarket industry itself faces a major threat, as larger chains such as grocery retailers Wal-Mart and Tesco have begun to open small-format stores that mimic the Trader Joe's approach. This invasion results in additional cost pressure for incumbents like Trader Joe’s, which had to let go employees in order to become more cost competitive.

The industry we have chosen is the department store-retail industry. Within this industry, we have chosen the department stores of JCPenney and Macy’s. We find this industry, as well as these two companies, interesting from a strategic perspective. JCPenney has recently undergone a massive strategic restructuring in regards to its pricing, brand offerings, and store layout, pushing it away from the typical department store strategy of discounts and coupons. Its new strategy has become much closer to Wal-Mart’s strategy of every day low prices. Macy’s, on the other hand, has restructured with a push from the economic

Grocery shopping is more diversified and evolved than ever before. Individuals across the nation have access to everything from exotic products to unique delivery services. Often, specialty stores have limited locations whereas specialty services have a limited reach. However, two retailers have expanded to hundreds of locations while adhering to unexpected market positioning for previously untargeted market segments. Whole Foods Market and Trader Joe’s have become household names while also innovating beyond regional and national traditional chains. Despite comparable size in

With giants such as Walmart, and Kroger running the grocery store industry it’s difficult for companies such as Smuckers to bargain for shelf-space and prices. Brand name items drawn to the center of the store are what leverages these companies to succeed in the industry. After numerous acquisitions and strategic alliances, Smuckers developed a solid core of product lines which experienced success rapidly. Product lines that experienced the most success as a result of strong positioning in the industry included their Coffee labels, flour and baking products, Oils and food spreads. A 9-Cell Industry Attractiveness/Business Strength Matrix shows that the Industry attractiveness is relatively moderate. With many competitors and strong buyer power from large grocery chains such as Kroger, companies such as Smuckers have explored different strategies that have proved successful in what can be described as a saturated industry. The case insinuates that there may be opportunities in the industry in regards to special markets and perhaps Oils and Baking with sugar free products, but otherwise the recession, although it drove families to buy store bought as opposed to eating out, has had its effects on the food service industry as well.

A Supercenter is well known for having all the basics needs one would look for in a very large discount department store that also sells a complete line of grocery merchandise. What makes a great Supercenter is their large selection, low prices, and the fact that they are open twenty-four hours. There are a few supercenters that have all these qualities, for example, Walmart and Target. Both stores provide large selections and have great low prices and not only that, but are open twenty-four hours. But Walmart is a better Supercenter than Target because it has all the characteristics one would find in a Supercenter. In the article “Unequal Competition Among Chains of Supercenters: Kmart, Target, and Walmart” the author Thomas O. Graff mentions some characteristics on how Walmart has dominated its competitors. In his introduction, Graff describes Walmart having “the greatest number of supercenters” and how it is “driving the expansion of the Supercenter format”. He also mentions in his introduction that Walmart “has largely defeated its Supercenter competitors and now is confronting the major grocery chains for grocery sales” (54).

Hi-Value Supermarkets located in the Centralia, Missouri area are faced with the problem of deciding whether or not to change their sales strategy to everyday low pricing. This has become an important subject for Hi-Value due to their loss in sales of the last few quarters, and a possible future loss in market share in their area. Hi-Value has three stores in the Centralia area and all are perceived as having a high market value in comparison to its competitors. They has attempted to determine the strengths and weaknesses in accordance to its competitors by conducting a survey and two focus groups which provided some very key results. Going further into this problem we must also assess

For this analysis, the external factor of competition shall be utilized. The Company has admitted that its industry is highly competitive, whereas competition is based on customer ser-vice; price; store location and appearance, and quality, availability and assortment of merchandise (Home Depot Inc., 2015). The Company has also acknowledged that it faces increasing competi-tion from online and multichannel retailers, who benefit from a lower cost structure, as well as the Company’s customers are increasing their usage of data and knowledge about products and prices (Home Depot Inc., 2015). Additionally, if the Company is unable to aptly respond in an appropriate manner, the Company market share and financial performance may be undesirably impacted (Home Depot Inc.,

Retail sales was the largest industry in the United States prior to the 2000’s recession. It was the top employing industry from 2003 -2008 in nearly half of the U.S. states. Starting in 2009, every year has shown a decline in number of states where this is the top industry; as of 2013, retail was down to six from its peak of twenty-four. Retail is still a major industry but it will be interesting to discover how individual firms, specifically the largest ones, have handled this decline and what they may be doing to reverse the pattern. Kroger, Walmart, and Costco have the top revenues in the industry and are similarly categorized as well. Kroger is a supermarket, a larger grocery store with small section of general merchandise; Walmart is a hypermarket, contains a large range of products in both grocery and general merchandise; Costco is a warehouse club, also a large range of products but with a focus on selling large quantities at a discount with a small club fee. Since these three companies overlap in much of their products, there is competition between them which also adds to why they are respectable choices to analyze together.

Question #1: After careful deliberation and analysis of the Reed Supermarkets case, the marketing team has concluded that Mr. Jack Morrissey’s goal of attaining a market sales share of 16% as being achievable. It is important to note that market sales share is calculated in terms of dollar sales (revenue) generated as opposed to the quantity (amount) of items sold, with respect to the entire market. Reed currently has a market sales share of 14% in Columbus with 25 stores in the surrounding area. Ultimately, the team has elected to attain the additional 2% of market sales share by focusing

Finding ways to stay viable in a saturated market: Establishing strategic partnerships with national supermarket chains and food service providers using quality as a capstone to their marketing

In an effort to respond to growing customer needs and enhance their own profitability levels, Wal-Mart decided to develop and sell their own private label products. The strategy behind this change decision was complex and involved a series of factors, such as the rationale for the change, the resources engaged, the strategic steps or the costs and outcomes of the project. These are all assessed throughout the following paper.

WHOLE FOODS MARKET, 2005: WILL THERE BE ENOUGH ORGANIC FOOD TO SATISFY THE GROWING DEMAND?