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This is a short case analysis of a supermarket (under a dummy name) and how my group and I feel they could improve their sales penetration and overall profitability.
Reed Supermarket A New Wave of Competitors Group – 6
Date : 13-0-!01"#
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Co&te&ts '&trodu(tio&################################################################################################################ 3 Situatio& A&a)*sis:###################################################################################################### 3 Customer Satisfa(tio&:############################################################################################ 3 Competitio& +a(ed:################################################################################################## , pportu&ities i& .arket p)a(e:################################################################################ , $ro/)ems +a(ed /* $rota%o&ist###################################################################################, So)utio& to te $ro/)em a&d 'mp)eme&tatio&:############################################################ " Group .em/ers########################################################################################################## ite&dra 2eru)a) ai& - D. 16!1########################################################################### A&ki) 4umar Sa&%avi – D. 16106########################################################################## Nitis Ni5awa& – D. 16!3!#################################################################################### Sruti 2a)a/adra – D. 161,,################################################################################ Su/am A%arwa) - D. 16!,"################################################################################
'&trodu(tio&
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Reed as /ee& esta/)ised i& 13 /* Wi))iam Reed i& 4a)ama7oo8 .i(i%a&# A&d /* 1608 !" stores ad /ee& ope&ed i& .i(i%a& a&d '))i&ois# Compa&* ad pur(ased two medium si7ed (ai& i& io8 '&dia&a a&d Wis(o&si&# A&d /* !010 te* ope&ed arou&d 1! retai) sop8 two re%io&a) (e&ters# 9e* ave !1000 emp)o*ees worki&% i& teir retai) sops# +rom )ast two de(ades reed stores ad /ee& (o&sidered i% e&d super market# 9e* are famous for fres sea food# 9e* are a)so famous for ua)it* of teir produ(e a&d its empasis o& or%a&i( produ(e# 'f we ta)k a/out Co)um/us market8 reads ave !" stores i& io to serve arou&d ! mi))io& peop)e# '& !0108 Co)um/us;s media& ouseo)d i&(ome is < "!000 wi( is i%er ta& Natio&a) media&# $opu)atio& Growt is 11= a&d >&emp)o*me&t rate is ?#"=# A&d i& /ot te aspe(ts Co)um/us /us is /etter ta& Natio&a) avera%e rate# 9e ma5or pro/)em wit reed is tat i& )ast two *ears8 te market sare of reeds ad /ee& (o&sta&t# @ve& " *ears dow& te )i&e te market sare was ()ose to 1"= per(e&t wi( as /ee& de(reased to 1,=# A&d &ow te* wa&t to i&(rease teir market sare to 16=# Reeds ad a)wa*s empasi7ed ua)it* a&d servi(e i& teir operatio& a&d adverti&% a&d /e(ause of tat (o&sumer ad pursued tis /ra&d as i%er pri(e /ra&d#
Situatio& A&a)*sis: Customer Satisfa(tio&: Reed supermarkets as uti)i7ed a)) its resour(es to provide /est (ustomer satisfa(tio& to its ()ie&ts# 9e two ma5or poi&ts wi( Reed as used is diere&tiators a&d )o(atio&# •
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'f we ta)k a/out diere&tiators reed as (reated a& aura a/out itse)f /* avi&% severa) features )ike attra(tive stores8 )o&% ours8 e)e%a&t servi(e (ase disp)a*s a&d %reat (ustomer servi(es# Reed a)so as %ive& spe(ia) empasis o& produ(t variet* a&d ra&%e# Se(o&d is )o(atio& as Reed super marketi&% are avai)a/)e i& severa) )o(atio&s a&d tar%et (ustomers i& 1to 3 mi)es )o(atio&# 'f we (ompare Reed o& /asis of )o(atio& wit (ompetitor reed o)ds a& ed%e as its (ompetitors are &ot tat freue&t)* avai)a/)e# Do))ars stores a)so add te ed%e as te* are eve& more easi)* a((essi/)e /* te (ustomers# Bike a&* oter (ompa&* some fa(tors of (ustomer satisfa(tio& are )a(ki&% i& te Reed supermarkets a&d o&e of te ma5or fa(tor is te pri(e# As a& e(o&omi( s)owdow& as /e(ome evide&t te pri(es of te produ(ts /e(ome o&e of te fa(tors of (ustomer satisfa(tio&# 9e ei/it 3 sows tat (ustomers per(eives tat over te *ear te pri(es of reed supermarket as remai&ed same eve& tou% tere as /ee& some de(rease i& te (ompetitors pri(es# 9e ei/it , a)so (o&Erms te pri(e pro/)em for reed as it as /ee& (o&sider i% i& terms of ever*da* pri(es# So Reed supermarkets &eeds to work o& its pri(es to improve its (ustomer satisfa(tio&#
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Competitio& +a(ed: Reed Supermarket was fa(i&% ead o& treat from A)di Stores# owever8 te (ompetitio& it fa(ed was from Super (e&ters8 spe(ia)t* %ro(er* retai)ers8 wareouse ()u/s8 do))ar store (ai&s a&d )imited se)e(tio& stores# 9raditio&a) supermarkets disti&%uised temse)ves o& te /asis of te ra&%e a&d ua)it* te* oered# owever8 a (ustomer opted for va)ue Ffor mo&e* over privi)e%es su( as %ood (ustomer servi(e8 attra(tive stores a&d i% staH&% )eve)s# '& tis s(e&ario do))ar store a&d A)di took a (ip of Reeds market sare# Compared to its (ompetitors Reed as a &arrower ra&%e of private )a/e) mer(a&dise wi( was /ei&% promoted a%%ressive)* /* its (ompetitors due to i% mar%i&s# Super Ce&ters )ike Wa)mart oered )ar%e dis(ou&ted produ(ts /e)ow te sta&dard .R$ a)o&% wit o&e stop soppi&% for mu)tip)e &eeds# 9us (reati&% a& ed%e irrespe(tive of its )o(atio&# Wareouses mai&tai&ed &o optio&s wit 5ust o&e /ra&d foe ever* produ(t# 9e pri(es were as )ow as !0= of .R$# 9us se))i&% 2u)k pa(kets a&d e&(e (o&(e&trati&% o& /ot midd)e a&d aIue&t ()ass# Do))ar stores worked o& te /asis of E))-i& trips wi( make up 60= of te pur(asi&% tre&d# 't as a )ea& (ost stru(ture8 )ow mai&te&a&(e a&d simp)e operatio&s# 't o((upied a &i(e wi( 5ust 3= market sare /ut sti)) (o&sidered a treat# A)so te* were )o(ated &ear te (ustomers# Bimited se)e(tio& stores spe(ia)i7ed i& private )a/e) foods wit empasis o& imported a&d )imited editio& food# 9e pri(es were eavi)* dis(ou&ted a&d ad te maimum per suare foot of sa)es# A)di8 its dire(t (ompetitio& as started p)a&&i&% epa&sio& i& Co)um/ia#
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pportu&ities i& .arket p)a(e: •
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9e e(o&omi( s)owdow& is epe(ted to e&d# A&d as per te resear( te media& i&(ome of reed sopper is 1!= i%er ta& te area ouseo)d avera%e# So if te e(o&omi( s)owdow& wi)) e&d te& Reed (a& epe(t more traH( i& teir stores# 9e /i%%est tread of reed is do))ar stores /ut as per te market resear( te market sare of do))ar stores is epe(ted to &ot i&(rease a/ove 3=# 9e (ompa&* as previous)* eperie&(ed simi)ar (*()es of Ju(tuatio& i& te past a&d ad %ra//ed te 10-1"= sare of prosperous (ustomers8 tus maki&% tem eperie&(ed to fa(e simi)ar situatio&s# As per te market resear( te* ave !0= more (ustomer wo as pet8 as (ompare to te oter supermarket# So8 te* (a& epa&d te /usi&ess i& pet food#
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9e* are a)so k&ow& for ea)t* produ(t so te* (a& (o&(e&trate /etter o& ea)t* produ(ts# As per te (ase8 we (a& assume tat8 i& Co)um/us8 te* ave a u%e market of private )a/e) produ(t# So8 te* sou)d start private )a/e) produ(ts#
$ro/)ems +a(ed /* $rota%o&ist •
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9e Co)um/us8 io market i& spite of /ei&% sta/)e (aused a de&t i& te market sare a&d reve&ues of Reed supermarkets# Adve&t of various oter /ra&ds of supermarkets ad take& a sare of Reeds pie of te market sare# Reeds market sare de()i&ed from 1"= to 1,=# Si&(e te time of i&(eptio& i& 13?8 Reed supermarket a)wa*s (o&(e&trated o& &ot o&)* providi&% produ(ts /ut a /etter a&d appe&i&% soppi&% eperie&(e a&d /est ua)it* produ(ts# 9e same was &ot te (ase wit oter (ompetitors tus te* seemed to /e )ess pri(e*# 2* tis some of te (ustomers per(eived Reeds our pri(es to /e o& a i%er side# Bar%e (ompa&ies asso(iated wit Reeds supermarket (ompe))ed Reed to a%%ressive)* promote teir /ra&ds i& fa(e of te %rowt of private )a/e)s witout a&* etra (ompe&satio& for doi&% so# $rivate )a/e)s proved to /e (ompetitive due to teir i% pri(e (ompetitive&ess# Due to )ow at teir pri(i&% poi&ts at te same time (ateri&% to a)) te (o&sumers dema&ds8 duri&% te times of e(o&omi( s)owdow& (ustomers were swit(i&% over to private )a/e)s i& some (ate%ories# Se(o&d %e&eratio& a&d )imited se)e(tio& stores )ike Do))ar stores a&d A)di8 9raders oes respe(tive)* ave fora*ed i&to )ower e&d of te market wit private )a/e)s providi&% produ(ts at (eaper rates# 9e (ompositio& of private )a/e)s i& teir oeri&% we&t up to ?"= - "=# (ustomers wo were previous)* tra&sa(ted wit Reed supermarket ave started swit(i&% over to oter supermarkets8 wareouses ()u/s et( tere/* depi(ti&% a de(rease i& (ustomer )o*a)t*#
So)utio& to te $ro/)em a&d 'mp)eme&tatio&:
Self-procurement of some products like grains, processed foods and fresh foods, and selling them under a self-brand. Greater mar%i& (a& /e o/tai&ed from tese produ(ts as te (ost of se)f-pro(uri&% wi)) /e )ess ta& pur(asi&% /ra&ded produ(ts# As a /ra&d8 Reeds as te reputatio& of providi&% i% ua)it* produ(ts8 a&d te sa)es of tese produ(ts sou)d /e&eEt from tis reputatio&#
Create a new sub brand retail chain of eeds to compete with low cost stores like !ldi and "ollar stores. 9ese stores wou)d /e /ra&ded
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wit a diere&t &ame a&d teir so)e purpose wou)d /e to provide produ(ts at )ow pri(es# 9e reaso& for doi&% tis is8 i&stead of Reeds (ompeti&% dire(t)* wit tese )ow pri(e a&d avera%e servi(e providi&% storesK (ompeti&% wit a simi)ar oeri&% wou)d /e a /etter optio&# 9e su/ /ra&d stores produ(t ra&%e wou)d (o&sist of mai&)* private )a/e) mer(a&dises8 a&d te framework wou)d /e to mai&tai& )ow operati&% (osts# 9is wa* te su/ /ra&d wi)) (ater more to midd)e i&(ome a&d more pri(e (o&s(ious (ustomers8 wi)e Reeds (a& (o&ti&ue to mai&tai& its reputatio& of provi&% i% ua)it* servi(e a&d wide ra&%e of ua)it* produ(ts#
$e recommend terminating the dollar strateg%. 9is is /e(ause data sowed tat ma&* (ustomers o&)* sopped for te do))ar produ(ts# A)so te (ompa&* were %ivi&% awa* tese produ(ts at u%e perso&a) dis(ou&ts# '&stead te Reeds sou)d fo(us o& providi&% a wider ra&%e of produ(ts Fmore ta& te do))ar s(eme of !"0 at a dis(ou&ted pri(e8 wi( is &ot so )ow tat te (ompa&*s mar%i&s suer# Reeds (a& a)so i&(rease te &um/er of promotio&a) dea)s a&d (om/o dea)s# 9is wi)) attra(t (ustomers a&d a)so e&sure tat te* sop for a %ood amou&t8 rater ta& 5ust a few do))ar wort F)ike i& te do))ar s(eme#
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Group .em/ers ite&dra 2eru)a) ai& - D. 16!1 A&ki) 4umar Sa&%avi – D. 16106 Nitis Ni5awa& – D. 16!3! Sruti 2a)a/adra – D. 161,, Su/am A%arwa) - D. 16!,"
