Business Analysis: Spartan Stores Company

INTRODUCTION TO THE COMPANY
Spartan Stores Company was once a wholesale grocery cooperative has today grown to be the fifth-largest food supplier in the United States. The company is listed as one of the prestigious Fortune 400 companies as well. They are also the largest food distributor serving U.S. military commissionaires and exchanges. They own and run over 165 corporate owned grocery stores across ten states of U.S. and distribute to 2100 individual localities across more than 46 states(Spartannash.com, 2015).
The company’s business is distributed amongst various sectors as follows:
• Retail Operations - 30%
• Military Operations - 30%
• Wholesale Distribution - 40%
SpartanNash Stores can be found under the following retail banners
Spartan Stores is a company that wants to use its local resources and will definitely receive a high international demand. So based on that demand they need to make sure they do not fall out of stock and all their deliveries are made on time. It is not easy for a company to expand globally; they face many challenges such as finances and customs. It is important for them to have multiple supply chains, each modified to reach the needs to specific regions and need to be supported by locally developed capabilities and talent. There are also some under developed countries than Spartan might want to expand to but what if the country cannot afford importing products from Spartan. It is a must for the store to consider all these pitfalls and adjust their prices and stock. Whereas in highly developed countries population could be large and so could demand, therefore it is a must for them to keep track of their stock and need to make sure they never fall short on supply due to an increasing demand. There are countries with unstable economies, lack of infrastructure and with such situations companies face a crucial decision which is whether to expand or
• Low switching costs for customers between companies. Customers usually purchase from the best-cost provider.
• Requires a very precise and well-managed distribution system.
POWER OF SUBSTITUTES: HIGH
• Prices and quality of all products are very competitive. Walmart prides in delivering the best quality in for that price range.
• Performance of substitute products are similar
• Consumer switching costs are low
COMPETITIVE RIVALRY: HIGH
• Walmart has the highest revenue globally. (Walmart, 2014)
• Competitors have similar sizes.
• Industry growth is slow.
• Exit barriers are high; it will cost companies a lot to exit.
• Walmart’s Main Competitors are: o Target o K-Mart o Dollar General o Lowe’s Food

3 GENERIC STRATEGIES: COMPETITIVE ADVANTAGE FOR SPARTANNASH
Any company has to face the challenges of competition in order to sustain in the market. The difference between the value a product offers to the customers and the cost of creating that value can be defined as a company’s competitive advantage (San Miguel, 1996). Competitive advantage is usually one of two types; a differentiation advantage or a relative low-cost