Study Program : Premaster International Management
Title : Measuring store returns performance of supermarkets
I. Problem Indication
Saturation characterizes global markets for supermarkets, which has led to slow growth and hyper competition (Juhl, et al. 2002). In order to survive in this fast-moving environment, supermarkets strive to gain a competitive advantage exceeding their competitors (Porter, 1980). The competitive advantage framework proposes two distinct strategies – low cost and differentiation (Porter, 1980), while Day and Wensley (1988) suggested two other approaches for distinguishing competitive advantages: customer-focused and competitor centered (the market-orientation approach). Kelly (1992) identified that Porter’s concepts are oversimplified in the context of retailers and that Porter’s concepts require future researchers to consider the customer-centric approach in assessing the competitive advantage of retailers.
Research on the effect of the market-orientation approach on store profitability has been conducted in a variety of contexts. A great number of studies have been conducted in the United States (Jaworski and Kohli, 1993; Narver and Slater, 1990). Other studies have been conducted in Australia (Caruana et al. 1999; Gray et al. 1998), in South Eastern Asia (Grewal and Tansuhaj, 2001) and Japan (Deshpande et al. 1993). The competitor-centered and channel relationships as a part of the market-orientation has been studied in the Netherlands (Langerak, F. 2001). Furthermore, operating in a market with slow growth and intense competition demands focus on customer satisfaction and customer loyalty, to achieve positive net operating profits. Market orientation appears to build superior value to the customer, leading to superior performance. (Kohli and Jaworski, 1990). Moreover, non-price attributes can be regarded as more important to a retail customer than price (Govil, Balram and Vinod 2007). Even so, the... [continues]
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