Kroger Strategic Analysis

Kroger Supermarkets were started in 1883 by Barney Kroger in downtown Cincinnati. Mr. Kroger started his business with the motto: “Be particular. Never sell anything you would not want yourself.” Through the years Kroger has strived to uphold this motto to its customers and to provide great service, the freshest products and expansion to meet the needs of their customer base making it one of the world’s largest retailers. Kroger now has over 2,600 stores in 34 states with $108.5 billion in annual sales. Kroger operates 37 food processing facilities and Kroger was the first grocery retailer to use the electronic scanner.

Kroger’s corporate strategy consists of continuously innovating and creating new ways of bring value to the customer. They were pioneers for many of the things that we now consider norms in grocery stores. In the past, Kroger had rapidly expanded to many store locations to gain market share. This expansion strategy caused them to lose profits in

Operations management is essential for the survival and success of any organization. According to Heizer & Render (2011), operations management (OM) is the set of activities that creates value in the form of goods and services by transforming inputs into outputs. Operations managers today contend with competition, globalization, inflation, consumer demand, and consistent change in technology. Managers must focus on the efficiency and effectiveness of processes such as cost, dependability, distribution, flexibility, and speed. The intent of this paper is to discuss the processes and operations management of the Kroger Company.

The grocery industry has a relatively high market commonality; a lot of grocery stores are somewhat related in terms of technologies used, labor force and the products or services offered in the stores. Differentiation with other competitors is key for survival in this highly competitive industry.

Grocery shopping is more diversified and evolved than ever before. Individuals across the nation have access to everything from exotic products to unique delivery services. Often, specialty stores have limited locations whereas specialty services have a limited reach. However, two retailers have expanded to hundreds of locations while adhering to unexpected market positioning for previously untargeted market segments. Whole Foods Market and Trader Joe’s have become household names while also innovating beyond regional and national traditional chains. Despite comparable size in

Kroger’s mission is to be a leader in the distribution and merchandising of food, health, personal care, and related consumable products and services. They envision the company will operate in a way that reflects their belief that the organization levels closest to the customer are best positioned to serve changing consumer needs. The mission and vision of Kroger is socialized and dependent on their employees (Retail Industry, 2012).

Kroger strives to protect the environment and “improve today [while] protect[ing] tomorrow” (“Our History”). Their emphasis on the environment is the basis of the company’s Nonfinancial goals. Kroger would ultimately like to “end hunger in our communities”, “establish a $10 million innovation fund”, “donate more balanced meals”, “advocated for public policy solutions to address hunger”, “improve health”, and “become a zero-waste company” to name a few (“We Have Something to Do”). Financially, “the company plans to grow its business by maintaining its strong market share while continuing to explore new opportunities for sales growth” (“We Have Something to Do”). To get to this point, Kroger believes that technology plays an important role. In reducing the time customers wait to check out from about “four minutes in 2010” to “less than 30 seconds in stores today”, consumer approval

This report provides an evaluation and analysis of The Kroger Company’s internal and external factors, as well as how the company can improve its business. The research shows how the debt heavy cash flow has not directly affected the success of Kroger. The debt-to-equity ratio is a 2.25, and there has been a steady decline in the net income. The Kroger Company’s market share is at 15.8%, with their biggest competitor, Albertsons Companies at 9.9%. Further research reveals that Kroger is the largest grocer in the U.S., and will continue to expand with new stores opening every year.

Kroger’s vision for its store brands is to build loyalty among customers, with strong store brands that are exclusive to the retailer. It pursues a multiple-tier store brand strategy to provide Kroger’s products to all customer segments.

The Kroger Company grew in 128 years from one store to over 3,500 stores of various banners and products. The Kroger Company is the largest food and drug retailer in the United States and is growing constantly with diversity in the retail market, dealing in food, pharmacies, apparel, jewelry and fuel. Kroger is governed by a 14 member Board of Directors including a Chief Executive Officer. Kroger is a leader in Corporate Social responsibility by maintaining environmental consciousness, social awareness and energy conservation awareness. Kroger is committed to customers, builds diversity and focuses on growth. The company operates a large part of it’s own manufacturing and distribution to increase profit

The grocery industry is known for slim margins and intense competition. Individual stores balance on the razor’s edge because small changes in sales have large effects on the balance sheet. “Green” grocers, typified by Whole Foods, appear to escape some of this intense competition. The following analysis will compare Safeway, a more typical grocer, to Whole Foods, arguably the originator of the boutique green grocery store. Analysis of Safeway’s 10-Ks reveals a company attempting to reinvent

The Kroger brand was born in 1883, Bernard 'Barney ' Kroger took his life savings of $372 to open his first store in downtown Cincinnati. This location is by I-71 that passes the Great American Ballpark. Barney Kroger, the son of a merchant, had a simple "Be particular. Never sell anything you would not want yourself." This was the credo that would serve The Kroger Co. well over the next 130 years as the supermarket business evolved into a variety of formats aimed towards satisfying the needs of their shoppers in as many aspects as possible. With nearly 3,619 stores in 34 states under 24 different names, such as Kroger, Dillons, Turkey Hill Minit Markets, Ralphs, Tom Thumb Food Stores, QuikStop, Fred Meyer Jewelers, and Littman Jewelers with an annual revenue of more than $70 billion. Kroger today ranks as one of the nation’s largest retailers.

The grocery retail industry worldwide has grown in recent years to become one of the most intensely competitive industries due to the continuous amounts of new entrants. A grocery retailer is one that sells food and other general household items. Hypermarkets, supermarkets, discounters and small grocery retailers are all under the grocery retail umbrella. Between 2003 and 2008, the grocery retailing industry accounted for 45% of store-based retail values sales over the world. The figures

Porter’s Five Forces model looks into an industry and allows for deeper analysis of business strategy that is involved with each company. It strives to identify the justifying factors that are related to five forces that determine the competitive environment and overall attractiveness of an industry. In the case of KKD’s their competitive position is put against fast food industry. Potential entrants of this industry depend on what stage of the industry life cycle it is in at the time, however most of the time the threat of potential entrants is low. This is because the majority of the firms currently in the industry have developed economies of scale that provides them with a cost advantage over new entrants. KKD has cost advantages due to its supply chain and since they manufacture their own doughnut-making equipment and produce doughnut mixes their economies of scale is entirely internal thus making the doughnut making process very efficient. Their access to distribution sells directly to the customer by means of their stores with counters and drive-through windows. They also sell out of the stores in grocery and convenience stores. Their brand is known for their doughnut signs as well as doughnut-making theaters where customers can come watch the doughnut making process through glass windows.

The purpose of this report is to provide a strategic analysis of Woolworths in its Australian retailing and grocery industry. There are some external factors can be affected to Woolworths strategy. To be analyzed how these factors impact to Woolworths strategies we would use Porter forces five models as a framework for analysis. They are threats of new entrants and substitute products, rivalry among competing established competitors, threat of substitutes and bargaining power of Woolworths’ suppliers and customers.