Competitive Strategy Essay on Kroger Company PDF

Preview

Summary

Competitive strategy on Kroger Co. to include Porter's Five Forces, Porter's Value Chain, and SWOT analysis. with diagrams....

Description

Competitive Strategy Generic Strategy Kroger is presently contending with both cost leadership organizations just as differentiation organizations. As of late, Kroger has been adjusting themselves to the differentiation strategy to not be trapped in the middle. Kroger's usage of the differentiation strategy is focused on an expansive market that includes the creation of a product or service that is seen all through its industry as extraordinary. To accomplish its differentiation strategy, Kroger has extended its private-mark contributions in an endeavor to oblige the large-scale ecological pattern towards settling on making better life decisions and executing the client first methodology. Kroger has been in a price war with the contenders working with a cost leadership methodology and has dropped the costs of a considerable lot of its items. Strategy Implemented Kroger has extended its private name brand to incorporate the "Simple Truth" natural brand. Inside the "Simple Truth" name, the customer buys natural items with a higher value than other in-store items, eventually improving margins for the organization. The execution of this methodology furthermore improves Kroger's brand loyalty in light of the fact that these items are seen by clients as extraordinary in contrast with rivals in the business. Kroger's "Simple Truth" mark is among the top producing private-name brands in the United States. Kroger additionally had objectives for 2020 towards improving sustainability, which would separate its items and increase brand loyalty and value. Furthermore, Kroger has carried out a low-cost strategy to contend with major food merchant firms, for example, Trader Joe's, Walmart, and Aldi, who depend on a solid cost leadership strategy to achieve market share. These contenders can credit their accomplishment in the business to a high significance set on proficiency among distribution, inventory, supply chain and pricing strategies. Kroger could do this by additionally expanding supply chain proficiency which thus permitted them to increase its bartering power against suppliers, also advantages from economies of scale. Exhibit 3

Kroger’s Value Chain

Primary Activities Inbound Logistics   

         

Emphasis on delivering fresh sourced food Strict inspections & specifications when receiving goods from manufacturers Just-In-Time inventory management Just-in-time (or JIT) is an inventory management method in which you keep as little inventory on hand as possible. That means you don't stockpile products and raw materials just in case you need them—you simply reorder products to replace those you've already sold Supplier certifications Obtain products & services at lower cost Use economies of scale with suppliers Minimize research costs on what products to buy Buy seafood through a sustainable plan (Partnership with World Wildlife Fund to ensure standards) Supplier diversity Strong supplier partnerships and supplier development (open door atmosphere between stakeholders) Strong distribution network from vendors, manufacturing & warehouses to stores Collaborative efforts with local suppliers to provide more organic products Develop innovative methods to deliver fresh products

Operations              

One-stop-shop for everything - eg: Gasoline as a key strategic product Private labels products generated based on customer preferences Efficient manufacturing process Maximize shelf space to carry a variety of products Efficient store layout Own transportation system to deliver to stores Transportation fleet efficiency All fresh food generated in 200-mile radius of end user Vendor management portal (manage resupply times) USDA prime meats Loaf-n-Jug fuel stations Improved product quality of private labels Improve product mix Improve store format - attract customers to certain displays

Outbound Logistics     

Minimize checkout times Innovators in electronic scanners and self-checkout Monitors shoppers in queue and opens additional checkouts Open 24x7 365 Incorporate mobile payments

Marketing & Sales              

Launched "Customer 1st Strategy" - Focus on people, products, price and shopping experience Customer Loyalty Program - Collect customer data Personalized Coupons - Loyal customer mailing (60% redemption rates) NuVal scores - Health initiatives Mobile apps - Shop online and pick up instore Kroger Van - Deliver to elderly Corporate Social Responsibility & Sustainability planning Building positive relationships with local communities Partnership with World Wildlife Fund Sponsorships for local community events Co-branding with Shell fuel stations Institute a tiered rewards program (higher the tier, greater the discounts) Better marketing of Shell co-branding to improve use of fuel points (Co-branding with Shell is relatively unknown) Develop new customer channels (online shopping, instore food lockers, delivery of groceries for customers)

Service        

24x7 365 Customer Service - instore, online, phone Quality guarantee on private label products Easy returns program Registered dieticians & pharmacists Interactive panels that help find products Digital coupons tied to loyalty card and mobile apps Real time customer analytics that provide upsell opportunities Real time indicators of stock on shelf for suppliers

Support Activities Procurement 





Inbound Logistics: o Sustainably sourced products o Local suppliers within 200 mile radius o Freshest food to customers Operations: o Transportation logistics o Managing warehouse capacity o Reduction in energy consumption in stores by 33% since 2000 o Reduced landfill by 90% from manufacturing plants. o Store layout Outbound Logistics: o Vendor qualification o Land/site selection o Good locations for stores targeting residential communities



Service: o Customer & product data software

Technology 









Inbound Logistics: o Global data synchronization network for vendor supply management o Warehouse automation Operations: o Transportation fleet software o Tech R&D Outbound Logistics: o QueVision shopper checkout management  QueVision uses infrared sensors to count customers entering the store and at checkout lanes. Combining those counts with factors such as store layout, staffing levels for cashiers and baggers, and historical transaction logs, store managers use a simulator to access the number of registers that need to be open in real time. Estimates are also made on how many should be open in 15 and 30 minutes.  QueVision has reduced checkout times on average from four minutes to less than 30 seconds. o Self-checkout electronic scanning systems o Use of RDIF for quick checkout Marketing & Sales: o Loyalty card & personalized coupons o Customer data mining Service: o Inventory management software o Customer profile management o Increased customer interaction through use of technology o Mobile payments o Use of ID Tags scanning technology for quicker stocking o Better inventory management - Use of ID Tags for quicker supplier notification Adjust supply based on customer demand and changing preferences

Human Resources  



Inbound Logistics: o Vendor qualification, open door policy, purchasing, training, certification Operations: o Employee development programs o Employee training o Kroger Scholars Fund, Helping Hands employee programs o Well compensated employees o Executive pay tied to company performance o Labor union management Outbound Logistics:



o Employee and manager training o Marketing & Sales o Stock options & employee performance bonus Service: o Customer Service training programs o Smart & friendly employees o Adequate staffing o Training for community development programs o Management-In-Training programs for employees

Firm Infrastructure

Competitive Advantage    

Inbound Logistics - USDA certified meat, supplier certification, fleet management, certified organics Operations - Innovation, checkout, product mix - private label Marketing & Sales - Rewards, Fuel points, Coupons, Community Involvement Technology - Logistics, Customer data mining, Mobile apps...