Retail Grocery Industry – Changes in Competitive Landscape

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Retail Grocery Industry – Changes in Competitive Landscape

SuperSonic Systems (aka Triple S)

Macro-Environmental Change Model
Macro-economic: Looming Recession decremented spending loyalty  Demographic: Immigration fostered product diversity and focused markets  Social-Cultural: Health and time conscious  Political-Legal: Change in child-labour laws deviated labour-employing pattern  Technological: High-tech Micromarketing 

Industry Change Model
Internal Rivalry: steady growth and competition arose in the ‘80s; market extremely fragmented Need to compete with direct and indirect substitutes through segmentation  Supplier Power: Large Stores negotiate with suppliers; generic brands stabilizes supply  Buyer Power: Price-sensitive; loyal to a brand but not a store  Threats of New Entrants: Logistics system as key; Economies of Scale and saturation as barriers; Membership scheme and cooperation 

Product Life-cycle Model




  

Embryonic: Pre-existed Market not welldiversified to meet customer needs Rapid Growth: Big Chains, e.g. Albertson’s, and supercenters intensified price competition Shake-out: M&A created dominant players to create quasi-oligopoly Maturity: Junior players declined and customers preferences varied Renewal/Decline: More services are being included/diversified, e.g. includes non-grocery products, online-shopping

Key Issues
In general, customer preferences are everchanging due to macro-environmental changes  Discrepancies in customer preferences due to social-economic factors; impossible to predict future trends  Align organizational vs. business concepts in a coherent manner  Low margin limits augmentation of shopping experience 

Solutions
Supercenters: one-stop shopping solution w/ pharmacy, electronics, gas, etc.  Diversification to better serve customers  Membership schemes to boost customer store loyalty  Use of tech. e.g. RFID to better connect with customers  Hire retired senior...
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