Outline And Grading Guide ( 150 Points )

The U.S. supermarket and grocery store industry is immense and accordingly very competitive. Sprouts competes with several companies which include the regular supermarkets such as

The company is equally endowed with qualified and skilled employees at all levels. This explains the reason why the company has consistently registered high efficiency and productivity in its operations. Mike Ulman, the chief executive officer and Mr. Thomas Engibous, who is the Chairman, head the company. The company has expanded significantly and currently it has footing in 11,106 locations globally. Firms competing within this industry obviously must focus on several factors in order to be successful and achieve profitability. If you focus on their primary activities for their value chain analysis a few major things you need to focus on are their logistics, marketing, how they operate, and customer service. For their logistics, they offer free shipping to anywhere depending on how much you spend and where you are. Therefore, they must have a large and quick distribution facility that can handle large orders efficiently, but also increase their

Stiff competition within the industry would be one of the key threats that Whole Foods will face. Strong competitors, coupled with grocery stores that have incorporated natural food sections into the stores, have made it more challenging for Whole Foods to maintain its pole position in the market. As the market for organic foods expands rapidly, mainstream supermarkets are also competing for a slice of the pie. Strict government regulations and the lack of prime locations have made it more

Inimitable- The online business model that Grocery Checkout currently has can be imitated by competitors. It has not yet been imitated because the competitors are waiting to see if it is truly profitable. They are also waiting to see if their customers will prefer the online rout instead of the traditional grocery-shopping trip at one of their supermarkets. The factors that limit the ability of competitors to imitate resources or capabilities like high cost, property rights, time and casual ambiguity are not there. The competitors are just giving this specific market time to see if it is in their best interest to imitate this online business model.

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

The threat of substitutes in the food retail industry can be high among the ‘Big Four’ as switching costs are relatively low and products can be similar. However, most have their own private labels and also target slightly different markets, such as Sainsbury’s having more upmarket positioning and Tesco’s cost leadership. Waitrose offers unique and differentiated products, which are, in the eyes of the consumer, significantly superior. No other supermarket offers such premium quality products with great service and such a large range of organic products as Waitrose, so this makes them extremely difficult to substitute. (Euromonitor, 2008).

Buyer Power: As GCO's products aren't any different from the products sold by other online sellers and local brick-and-mortar stores, it was unable to establish a brand images and to bound buyers to give up other substitutes for their proprietary products. Also, since the majority of buyers are only purchasing to the extent that to satisfy their household demand, their demands in volume are rather small and may be easily satisfied by any normal sized food retail competitors of GCO. These two factors together have provided the buyer a strong power in negotiation with GCO as well as many other food retailers. This fact is further strengthened by the fact that there is literally no switching costs in switching retailers as all the buyers would have to do is to go to another potentially more distant store and incur little additional gas expense.

Potential entry of new competitors is rendered low for the grocery retailing industry. Puregold, SM Hypermarkets, Rustans, and Robinsons Supermarkets are amongst the top key players in the game. The entry of new competitors could be very low because of the huge capitalization funds that this industry requires. In addition, the industry has been long time dominated by the giant players that had already well established and positioned their brands throughout the country and that they had already spread out with branches in Metro Manila and other regions.

Trader Joe’s operates over 340 stores in 9 states were they “buy direct from suppliers whenever possible, bargain hard to get the best prices and then pass the savings on to the customer” (Trader Joe’s, 2013, para. 4). Whole Food’s Market is the “world’s leader in natural and organic foods, with more than 360 stores in North America and the United Kingdom” (Whole Food, 2013, para 2). Trader Joe’s and Whole Food’s Market have managed to take original ideas and spread them throughout the nation to many different customers. Although they differ not only in the technique in which they decide to bring products to their customers but also in term of inventory management and supply chain organization. These two companies have become so successful in my opinion, not by what they differ in but what they have most in common, which is their commitment to their loyal customers, employees and undeniable quality in their products they sell. Through their loyalty to their customers and employees in addition to their irreplaceable value

Based out of Long Island City, Queens, FreshDirect was launched in July 2001, by Joseph Fedele and Jason Ackerman. It offers online grocery shopping and delivery service to over 300 zip codes in the Manhattan, Queens, Brooklyn, and surrounding areas. At the time of launch, there had been numerous other online grocery ventures that had ultimately met their demise. What made Fresh Direct unique was that it could offer grocery shoppers: “higher quality at lower prices.” It was able to do so because it had no retail location, which meant there was no rent to pay for retail space. In order to provide its customers with

In regards to purchase, we have a more competitive price than our competitors. We do not have direct competitors but in comparison with our indirect competitors: supermarkets, our prices will be set 30% lower than the market price. We can afford that as we purchase our product at a reduced price from the farmers. When we talk about supermarkets we refer to both online delivery and shopping’s in the physical locations. The only competitor that have similar prices as us would be the Daily Table. But this competitor it does not deliver online and is based solely in Dorchester. In regard with new entrants they can be a threat as they have similar offerings as ours, therefore it is very important to have the advantage of the first mover and lock in our collaborations with the local farmers. We also believe we have an advantage in terms of convenience as we make the purchase decisions for the customers by selecting what goes in the box delivered, which is one less thing the customer has to

The grocery industry is highly fragmented, with a multitude of strong regional players (Safeway, Publix, Kroeger, Wegmans, etc.). The largest grocery retailer in the United States is Wal-Mart, with an estimated 33% share. Other major retailers are targeting this segment of the industry, focused on a relatively narrow selection of key commodity foods at relatively low prices (Forbes, 2011). Whole Foods competes in a segment occupied by differentiated grocery players including Trader Joe's, Fresh Market and a highly fragmented selection of local and regional upscale and health-conscious grocery stores. The big players in the industry usually carry ranges of organic and natural products as well, siphoning off some business from Whole Foods. As Whole Foods grows, it comes into competition with mainstream grocery retailers more frequently (McLaughlin & Martin, 2009).

FreshDirect have advances online and food technology and had good knowledge in management but they are weak to deliver coverage and daily food usage products.

The Fresh Market puts a huge emphasis on customer service and they execute this strategy by effective hiring and training of their employees to deliver the excellent service with a smile.

Online shopping has been around since the start of the internet. Online grocery shopping has been has been hindered by the high cost of delivery beared by consumers. Recently, Countdown launched their online supermarket in New Zealand. This was preceded by overseas supermarkets such as Tesco, Walmart, even Amazon starting online shopping for groceries.