SmartMart: Strategic Analysis

1723 Words Dec 6th, 2014 7 Pages
SmartMart: Overview
SmartMart, a retail grocery chain, focuses primarily on organic, healthy and environment friendly line of products to add value to all its stakeholders. Its mission is to create a sustainable future by providing value for all its stakeholders and customers, while contributing towards a greener environment and having a strong financial return. Exceptional customer services, environmental friendly organic products and innovative management style are SmartMart’s core competence.

SmartMart is at a strategic watershed moment and is reassessing its existing business model. Big players such as Big-Box Mart have added organic products to their line and are selling them at very low price, thereby reducing SmartMart’s market
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Furthermore, most likely estimate of fuel prices exhibits that fuel prices might be higher than $140. Hence, the environmentalists will embrace this method. Thus, Customized store format is essential for SmartMart to attain a sustainability and is a key aspect in developing a successful strategy.

Scenario 2: Biofuels adoption - Acquisition

As SmartMart lacks the know-how of bio-fuels, Organic growth of bio-fuels can drive SmartMart away from its core competency. Five competitive forces theory by porter assisted me in making the most appropriate decision by linking it to the overall strategy. Since, SmartMart is looking to gain competitive advantage for long-term, forming an alliance would only create value for short and “Short-term value maximization often destroys the value (Jensen, M. C. 2001)”. Due to lack of control over production process, SmartMart might end-up selling a non-environmental friendly fuel. As environmentalists have been vocal about their interest in bio-fuels, forming an alliance with aforementioned firms could tarnish brand image of SmartMart just as blood diamond issues tarnished the brand image of DeBeers. Hence, I opted to go with acquisition even though there is a high entry and exit costs associated with it.

This decision was most difficult for me to make because bio-fuels producing technology is at a
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