Political Factors: Kroger's Impact On Business

Kroger’s corporate strategy consists of continuously innovating and creating new ways of bring value to the customer. They were pioneers for many of the things that we now consider norms in grocery stores. In the past, Kroger had rapidly expanded to many store locations to gain market share. This expansion strategy caused them to lose profits in

Headquartered in Cincinnati, Ohio, The Kroger Company is one of the largest supermarket retailers across the United States. Founded in 1883, Barney Kroger invested his life savings of $372 to open his first grocery store at 66 Pearl Street in downtown Cincinnati. (Kroger, 2011). Barney was quite proud. He was the first grocer ever to have a bakery, to sell meat, and to sell other groceries all in one store. From the start, Barney operated his business with a simple motto: “Be particular. Never sell anything you would not want yourself.” (Kroger, 2011). Today, one hundred and twenty-eight years later, the Kroger Company is still following Barney’s motto.

Kroger’s business principles of service, selection and value were established from the very beginning of for the company (Kroger, 2015). Kroger CEO, Rodney McMullen started as a part-time store clerk and rose through the ranks to become CEO in January 2014 (SEC, 2014). Rodney McMullen tailored Kroger’s mission to “I, you, we make a difference” in Kroger’s sustainability report (Kroger, 2014). Kroger is classified as a retail-grocery store Global

Political factors refer to the legal activities and political rules that may influence the business in some way. However, ASDA will continue to face many changing in the business for better or maybe worse when it comes to changes in government laws, for example, taxation and unemployment. The government is encouraging business to create or provide different jobs for the consumer this may affect or puts pressure on ASDA as they have to meet the all the government rules and regulation while continues to run the business according to the law (Worthington & Britton

Businesses are affected by the economy and sometimes the economy can have a dramatic drop in countries causing issues for some business mainly due to 4 factors. These factors are inflation, Economic growth, Exchange rates and unemployment.

Serving as the number one source of our plastic use, companies opt for plastic containers because it's easy, feasible, and convenient. Food packaging alone makes up for 30-40% of landfills with much of that plastic being carried into the oceans. Going off of this, a new concept that's quickly becoming popular are package free grocery stores. These cost- effective grocery stores have everything you could possible need in bulk form and consumers bring glass or reusable containers, or cloth bags and fill them with the food they need. First popping up in cities like Berlin, Vienna, and Barcelona, many are finding this a more sustainable and eco-friendly option resulting in these sort of grocery stores quickly spreading across the ocean, with the first one in the United States expected to open in Brooklyn, New York. Business operators are extremely optimistic that this could serve a very impactful solution to getting rid of unnecessary plastic. (Che Jenny).

With Kroger ranging from a variety of goods, it gives Kroger a wide diversity of strengths for the external environment. Some of the strengths are the fact that Kroger has an online market. Customers can order jewelry, deli and bakery products, floral, and more with the click of a button. This puts them higher up on the competition list for the advanced technology and convenience provided to gain loyal customers. Another strength is that Kroger has stores spanning across thirty five states, which is more than half the nation. This gives the company a wide geographical range in order to compete with surrounding stores. A threat into the external environment would be the competition between supermarkets. The trick is to offer something that large corporations cannot compete with. Kroger is known for its organic line of groceries, called Simple Truth, and its naturally fresh foods and produce. While companies such as Walmart or Costco can offer fresh foods, they are not as focused on the pure organic part. They are more about selling in bulk, and offering discounts, low prices, packaging, and quality. Kroger, on the other hand, can focus more on promoting their organic brands of groceries to attract customers. The natural and organic brand of Simple Truth can factor in Kroger’s opportunities, as Simple Truth is growing, now with over 15,000 organic food items. This allows Kroger to provide a huge variety of food and healthy choices to its customers.

Kroger’s mission is to be a leader in the distribution and merchandising of food, health, personal care, and related consumable products and services. They envision the company will operate in a way that reflects their belief that the organization levels closest to the customer are best positioned to serve changing consumer needs. The mission and vision of Kroger is socialized and dependent on their employees (Retail Industry, 2012).

All businesses operate in a political- legal environment. This influence directly affects the management of various key business functions as government policies change form time to time, most notably due to a change in government or a change in social expectations. Therefore, government policies are a notable source of change a significant influence on business operations. One recent political issue is the affect of climate change; this has been seen by the introduction of the carbon tax. Since policies can inform law making, also lead to many business opportunities, operations managers need to be fully aware of the contemporary government policies and what they comprise.

The Kroger Company uses the broad differentiation strategy. They have business in at least eight different market segments. They operate two thousand, two hundred and fifty-five stores across America and operate under twenty four banners. Their market position ranks among the highest in the nation. They also have a strong bargaining power because of their many endeavors into different market areas. Kroger supermarkets have been in business for one hundred thirty four years and have made a substantial contribution to the business world (Annual report, 2017).

The Kroger Company grew in 128 years from one store to over 3,500 stores of various banners and products. The Kroger Company is the largest food and drug retailer in the United States and is growing constantly with diversity in the retail market, dealing in food, pharmacies, apparel, jewelry and fuel. Kroger is governed by a 14 member Board of Directors including a Chief Executive Officer. Kroger is a leader in Corporate Social responsibility by maintaining environmental consciousness, social awareness and energy conservation awareness. Kroger is committed to customers, builds diversity and focuses on growth. The company operates a large part of it’s own manufacturing and distribution to increase profit

The Kroger brand was born in 1883, Bernard 'Barney ' Kroger took his life savings of $372 to open his first store in downtown Cincinnati. This location is by I-71 that passes the Great American Ballpark. Barney Kroger, the son of a merchant, had a simple "Be particular. Never sell anything you would not want yourself." This was the credo that would serve The Kroger Co. well over the next 130 years as the supermarket business evolved into a variety of formats aimed towards satisfying the needs of their shoppers in as many aspects as possible. With nearly 3,619 stores in 34 states under 24 different names, such as Kroger, Dillons, Turkey Hill Minit Markets, Ralphs, Tom Thumb Food Stores, QuikStop, Fred Meyer Jewelers, and Littman Jewelers with an annual revenue of more than $70 billion. Kroger today ranks as one of the nation’s largest retailers.

This strategic analysis of The Kroger Company will take a look at the changing trends of

At present time, I believe the two most pertinent factors for the Kroger company are sociocultural forces and environmental factors. According to Orlando,2017, Kroger has formed a partnership with Lucky’s supermarket located throughout central Florida and will open eight more stores in the state adding to their numerous banners. Kroger will have to conduct research on the forces that include lifestyles. cultural differences and attitude that could have an impact on their stores.

KKD divested Montana Mills chain of 28 bakery stores acquired in January 2003 for $40 million in stock. They would take a charge of $35 to $40 million in the 1st quarter. Also closing 3 new KKD “hot doughnut and coffee shops” resulting in a charge of $7 to $8 million. After these issues came to light, KKD’s shares closed down 30%, at $22.51 a share. Also in this time the SEC announced an informal investigation which caused KKD’s shares to fall another 15%, closing at $15.71 a share. The SEC filings were complete and KKD revised their financial statements. By the end of the next day the stock price was less than $10 a share.