hi Value case analysis

1.3. In order to estimate the peso discount rate, assume that the International Fisher Effect (IFE) holds. Groupe Ariel's Euro hurdle rate for a project of this type was 8%. Assume that inflation rates are expected to be 7% in Mexico and 3% in France.

I give this restaurant extremely high marks for producing a quality product.” Another bonus is that the restaurant is very popular, meaning the food is in high demand. Therefore the food that is already out doesn’t have time to get old and stale. But consumers don’t just want great tasting food in any amount; they want enough to fill them up until the time comes for their next meal.

In the St. Louis metropolitan region there is a wide variety of grocery retailers, from which consumers purchase their groceries. With many grocery stores spread throughout the regional area offering good merchandise and competitive prices there are two chains that are frequented, Aldi’s and Trader Joe’s. Both of these companies share the same parent company, Albrecht Brothers, and have stores nationwide. Both Aldi and Trader Joe’s are owned by one company; however, they share commonalities and differences.

Relying on statistics residents spend $30.6 million dollars per year on grocery store and other food products. Based upon the number of households and the average spending residents spend $16,872.00 per year on grocery store and other food products. Calculating the average spending it is estimated that Brother’s Convenience Store could conservatively gross $100,000. It is anticipated that the market penetration will increase over the next five years from 5% of local residents spending to 10%, and the client market area will increase to a 15-block radius.

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

Operating on very thin profit margins, players in the supermarket industry traditionally either focus on a premium segment or follow a discounter strategy at the low end. Premium players address educated and more price elastic consumers who value healthy, natural and organic food; the share of perishable items for these players is normally distinctly higher. Players that focus on a discounter strategy offer a higher share of simple necessity items and value price competitiveness over premium features like healthiness or organic origin. Independently of the focused customer group it is imperative for players in the supermarket industry to be cost efficient and optimize operations

Renee Brooks Catacalos and Kristi Bahrenburg Janzen wrote, “Suburban Foraging: Two Families Eat Only Local,” and found that, “Price comparisons revealed that no one store was cheaper across the board” (120). They wrote this piece to inform others of their journey and some details that weren’t originally on the market. One grocery store in particular,

The competitive environment that Hi-Value is in right now also effects their decision of EDLP. The demand in this supermarket industry is elastic, with multiple opportunities for competitors to steal market share. Exhibit 5 shows how $100 is spent in Centralia supermarkets: 49.67% perishables, 30.95% food grocery, and 19.38% on miscellaneous (health care, general merchandise, etc.). Also, who shops where effects the effectiveness of pricing; the median age of the Centralia population was 35 years; the median household income was $36,000; and 80% of residents had a high school education or more. Will these customers want another “cheap” supermarket? Exhibit 7 says yes (with the exception of meat quality and price). Hi-Value is considered reasonable with price, and quality produce/meat, overall variety of foods (Exhibit 6). Therefore, products must be consistently available and reasonable customer service is expected.

Nevertheless, the majority of customers are very satisfied with the amount of serving along with the quality of their meal as well as the price paid. The strategy of being a low priced high value added has seen problems due to lack of customers which is affecting the bottom line drastically. This inevitable circumstance has put a hold on operations and started an investigation upon various neighboring competitors and their own strategies.

Joe Coulombe started Trader Joe’s in 1967. Traded Joe’s can be characterized as a low cost, high quality grocery store. Eighty percent private label product mix, expanding its target markets, keeping costs down, and extremely effective marketing powers Trader Joe’s increase popularity. Since 2002, the market value of private food label has risen twelve percent (Datamonitor, 2008). This essay

Specialty grocery stores have grown in attractiveness to customers, but the main issue is that often specialty stores have restricted locations which in turn limits their reach to customers. Whole Food’s Market and Trader Joe’s are two specialty grocery stores who have increased locations to the hundreds while adhering to an unforeseen market standing for formerly untargeted market segment.

These four retailers average private-label dollar share of 22%, well above the industry average of 16%. They have also seen higher levels of overall sales growth versus non-leaders – 5.3% versus 3.4% over the past 3 years. (Future of Food Retailing 2008, 136)

Based on the metrics provided in the case about Hanover, Indiana, it consists of moderate to low income families. Consequently, the high quality approach would probably push Bob’s Supermarket into too small of a niche market. However, the location of the supermarket provides Bob’s Supermarket an enormous advantage, if they are able to offer product at prices close to the chain stores. Therefore, it would be advised that Bob’s Supermarket partners with IGA to low their product cost and past the added savings on to the consumer. While short-term profits would certainly decrease, long-term product movement would increase as local consumers elect to perform all shopping at nearby store rather than making the 10-mile drive to the other chain stores.

HMM will capitalize on the growing entertainment market around the globe through the production and promotion of high quality entertainment. Located in Los Angeles, California, the company will become highly profitable through the sale of pre-recorded music products, in addition to revenues generated from ancillary profit centers. HMM will own and control the masters (master copies), copyrights and licenses of its product, which will enable HMM to create immediate revenue streams while growing its music catalog into a multi-million dollar asset.

H.E.B, the 11th largest grocery chain in United States, started 30 years ago. When the company was started, it was a predominantly private label company. Recognizing the customer drawing power of national brands, H.E.B took crucial steps to build a strong national brand presence. HEB was known for its superior quality products, its customer service and a broad assortment of merchandise. Additionally the company’s focus on delivering on its promise of everyday low prices, especially to the low income households that it catered to, was amongst its most critical success factors.