Mercadona, Strategic Management

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1. Compare the physical structure of Mercadona supermarkets with different supermarket chains (size of the shops, location, parking, other elements…) In one hand, Mercadona owns a network of 900 supermarkets approximately, strategically located in commercial areas. Such supermarkets are of a considerable size but they are located inside towns and cities. However, there are many of them located in commercial areas outside urban clusters. In addition, Mercadona offers a free parking service for all its clients which may be an important incentive for most of them. On the other hand, when comparing with other national supermarket chains we can find some differences. For example, the physical structure of supermarkets from El Corte Inglés differs in the location of its shops, which are located inside huge buildings located inside villages. Regarding the parking issue, it is more restrictive than those of Mercadona: clients are required to have a client card in order to have access to free parking. Moreover, we can compare Mercadona with other kind of supermarkets outside Spain. The French model, for instance, is in general based on big stores outside cities and they are surrounded by high extensions of parking. In such supermarkets, customers can buy anything, from food to technological engines. Nevertheless, the German model is more traditional. German supermarkets are usually located inside cities and they are small shops which only offer food, generally cheap. Moreover, German supermarkets do not spend in marketing or in parking services.

2. Try to do an internal analysis using the value chain tool. Focusing firstly on Mercadona’s support activities, we may found that the firm’s infrastructure consists on a supermarket chain of 900 stores around 14 Spanish autonomous communities and it is headquartered in Valencia. Moreover, the firm’s human resource management invests 4 times more than other US supermarkets in employees’ training. This department seeks to promote loyalty among customers by having efficient employees that helps people buying. Finally, the technological development of Mercadona consists on implementing small changes and progressive adaptation on the firm’s products. Regarding Mercadona’s primarily activities, the inbound logistics of the firm is focused on obtaining resources from suppliers. The operations carried out work for the distribution of the products from suppliers to supermarkets (this is only made at night). Most of its suppliers work exclusively for the firm, ensuring them long term contracts. Furthermore, the outbound logistics consist on the arrival of the products to the chain of supermarkets, and finally, the firm’s sales and marketing is focused on costumers: Mercadona cares more on reputation and being familiar to its customers (who are “the boss”) rather than being on the media.

3. Identify key resources and capabilities of Mercadona.
Mercadona has some specific capabilities that, as the author of the case says “sound like a recipe for retail suicide”. We can find 7 important competitive advantages: Firstly, the firm’s employees are its most important resource off competitive advantage. Mercadona exerts big efforts on special training to its employees so as that they learn to be effective, efficient, multitasks, acquire specific knowledge, and learn to be “consumer friendly”. Secondly, the firm’s management has a mentality of continuous changes and improvements. In addition, Mercadona managers have a strong power towards suppliers, which may lead them to convince suppliers to reduce costs as possible. Furthermore, the firm’s low pricing strategy has an objective of high quality and achieving efficiency. In addition, the product assortment of Mercadona is not very extensive, they sell its distributors brands and other known brands. This implies that consumers have fewer products to choose and reduces costs. Moreover, Mercadona has built a strong brand reputation by offering...
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