Shopfair Supermarkets Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Shopfair Supermarkets Case Study Solution

Introduction

Shopfair Supermarkets is a chain of superstores in the zone of Oxford. The 2/3 of its stores are operating in Oxford. The population of the area is around two million with a growth rate of 0.6% which is below the national growth. The food industry has become very complicated due to the increased competition since many supermarkets have been established throughout Oxford. This has created a very complex situation for Shopfair Supermarkets since many domestic companies have opened stores with competitive prices to compete in the market.

Shopfair was a market-share leader until the entrance of various new supermarkets and warehouse stores. The supermarkets segment was on a declining growth due to the increased number of warehouse stores in Oxford. The specialty of the warehouse stores was that these stores had a different structure of organization than the supermarkets because they typically sold products on discounts and their customer base was increasing due to their low-price policy. So, on the other hand, the growth of the supermarkets declined.

Shopfair was one of the leading supermarkets in the area of Oxford, but now the warehouse store set-up has become more popular because of its increasing customer base and it was attracting the low-income groups and socio-economic customers to the market.The customers of the supermarkets were also price sensitives, they use to buy from the supermarkets until they had no alternative.But now the warehouse has become an alternative for their shopping. This led to increase in the competition in the market, and resulted in the decline of market share of Shopfair.

The concern for the company was to recapture the market, expand into the market, and compete with the large market players. Company has many alternatives such as it should increase the quality of its products, and discontinue the warehouse special campaign, or it should be on the status quo, or should it add many other categories of products into the warehouse special campaign so that customer can have an experience of low prices. Among many alternatives it was also an alternative for the company that it should introduce everyday low-price policy.

Problem statement

What strategic approach, or best practices Shopfair should adopt so that it could recapture its market share, and ensure the quality and service to its customers with flexibility, and experience of low pricing policy, and compete with market players?

Analysis

Supermarkets and Warehouse stores

The supermarkets typically have a large variety of products in stores including slow moving, and fast-moving inventories. But, the warehouse stores were selling products typically on discounts because these stores obtain products on discount due to purchase in bulk quantity, and ignore the slow-moving inventories, and they have costs saving strategies, and increased operational efficiency that also increased the profit margin.

The strategies that warehouse stores used were selling to customers directly without any packaging, or bags, and they also charged customer for the bags. Discount on the products were listed on the entrance of the store, and they had employed a labor force that reduced the costs of labor, and their labor were also cost effective and efficient than a conventional store.

Shopfair Supermarkets Harvard Case Solution & Analysis

The labor force in the perishable department was also less as compared to the conventional stores, and working hours in the warehouse stores were less than other stores in the market. In contrast, a typical supermarket has a large base of workers that manage the customers. Even the customers were allowed to shop on the check-cashing services that increased the risk of bad debts for them.

Their inventory management is also not very effective as the warehouse store because, the warehouse employees know each item in the warehouse, and efficient use of the vertical space has also increased the operating income because, earning per square of the warehouse is high as compared to the conventional supermarkets.

So, it can be determined that supermarkets have less effective practices as compared to warehouse stores. But, it is also important to know that warehouse stores have everyday low pricing policy due to their target customer base. So, it can be determined that warehouse stores are working effectively into the market, and leading the market from the front, and this might result in huge growth of the warehouse stores.

Food Industry and Warehouse Stores

The population of the Oxford area is about 2 million, and per capita in the food industry was approximately about $880, and average sales per conventional store was $125,000, this indicates huge market potential. But, the warehouse stores were capturing the market share by giving everyday low policy, and increasing the customer base, and being more efficient in managing the operations at reduced costs.

But, there are many complications that needs to be understood because, the economic conditions such as increasing national income, and the disposable income of households might divert them from warehouse to supermarkets since warehouse stores have customers that belong to low-level income groups, or belong to socio-economic segment in the population...................

This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.