Reed Supermarkets: A New Wave of Competitors SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Reed Supermarkets: A New Wave of Competitors
Reed Supermarkets is a high-end supermarket chain with operations in several Midwestern states. Meredith Collins, vice president of marketing, visits stores located in Columbus, Ohio, an important region with the largest market and the greatest impact on revenue growth. She is concerned about increased competition from dollar stores and limited-assortment stores offering very low, appealing price points. Reed's market research shows that as a result of the economic downturn, customer loyalty is dwindling and consumers are willing to go to multiple stores to get the best deals. Collins must decide whether to change the current marketing and positioning plan in an effort to increase market share to meet challenging corporate targets. Her options include retreating from price competition and focusing on quality or embracing more private-label brands and competing more aggressively on price. She can also maintain the current positioning and appeal to customers looking for a quality shopping experience. The case contains an implicit quantitative assignment that instructors can emphasize to the degree they choose.
Swot Analysis of "Reed Supermarkets: A New Wave of Competitors" written by John A. Quelch, Carole Carlson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Stores Collins facing as an external strategic factors. Some of the topics covered in Reed Supermarkets: A New Wave of Competitors case study are - Strategic Management Strategies, Customers, Growth strategy and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Reed Supermarkets: A New Wave of Competitors casestudy better are - – talent flight as more people leaving formal jobs, geopolitical disruptions, central banks are concerned over increasing inflation, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing household debt because of falling income levels,
increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Reed Supermarkets: A New Wave of Competitors
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Reed Supermarkets: A New Wave of Competitors case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Stores Collins, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Stores Collins operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Reed Supermarkets: A New Wave of Competitors can be done for the following purposes –
1. Strategic planning using facts provided in Reed Supermarkets: A New Wave of Competitors case study
2. Improving business portfolio management of Stores Collins
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Stores Collins
Strengths Reed Supermarkets: A New Wave of Competitors | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Stores Collins in Reed Supermarkets: A New Wave of Competitors Harvard Business Review case study are -
Organizational Resilience of Stores Collins
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Stores Collins does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Stores Collins is one of the leading recruiters in the industry. Managers in the Reed Supermarkets: A New Wave of Competitors are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Stores Collins are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Low bargaining power of suppliers
– Suppliers of Stores Collins in the sector have low bargaining power. Reed Supermarkets: A New Wave of Competitors has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Stores Collins to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Stores Collins has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Reed Supermarkets: A New Wave of Competitors - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Stores Collins is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Stores Collins is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Reed Supermarkets: A New Wave of Competitors Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Stores Collins is one of the most innovative firm in sector. Manager in Reed Supermarkets: A New Wave of Competitors Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Stores Collins digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Stores Collins has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Sales & Marketing industry
– Reed Supermarkets: A New Wave of Competitors firm has clearly differentiated products in the market place. This has enabled Stores Collins to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Stores Collins to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Stores Collins in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Reed Supermarkets: A New Wave of Competitors Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Highly skilled collaborators
– Stores Collins has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Reed Supermarkets: A New Wave of Competitors HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Reed Supermarkets: A New Wave of Competitors | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reed Supermarkets: A New Wave of Competitors are -
Products dominated business model
– Even though Stores Collins has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Reed Supermarkets: A New Wave of Competitors should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Stores Collins has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Lack of clear differentiation of Stores Collins products
– To increase the profitability and margins on the products, Stores Collins needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Stores Collins has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High cash cycle compare to competitors
Stores Collins has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Stores Collins is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Stores Collins needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Stores Collins to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Reed Supermarkets: A New Wave of Competitors HBR case study mentions - Stores Collins takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Need for greater diversity
– Stores Collins has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study Reed Supermarkets: A New Wave of Competitors has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Stores Collins 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Stores Collins, firm in the HBR case study Reed Supermarkets: A New Wave of Competitors needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Reed Supermarkets: A New Wave of Competitors, it seems that the employees of Stores Collins don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities Reed Supermarkets: A New Wave of Competitors | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Reed Supermarkets: A New Wave of Competitors are -
Buying journey improvements
– Stores Collins can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Reed Supermarkets: A New Wave of Competitors suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Low interest rates
– Even though inflation is raising its head in most developed economies, Stores Collins can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Stores Collins can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Stores Collins has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Building a culture of innovation
– managers at Stores Collins can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Developing new processes and practices
– Stores Collins can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Stores Collins can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Stores Collins can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Stores Collins can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Reed Supermarkets: A New Wave of Competitors, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Stores Collins in the consumer business. Now Stores Collins can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Stores Collins can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Stores Collins to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Using analytics as competitive advantage
– Stores Collins has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Reed Supermarkets: A New Wave of Competitors - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Stores Collins to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Reed Supermarkets: A New Wave of Competitors External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Reed Supermarkets: A New Wave of Competitors are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Stores Collins business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Stores Collins.
Stagnating economy with rate increase
– Stores Collins can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology acceleration in Forth Industrial Revolution
– Stores Collins has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Stores Collins needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Stores Collins in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing wage structure of Stores Collins
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Stores Collins.
Environmental challenges
– Stores Collins needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Stores Collins can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Regulatory challenges
– Stores Collins needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Stores Collins will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Stores Collins in the Sales & Marketing sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Stores Collins can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Reed Supermarkets: A New Wave of Competitors Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Reed Supermarkets: A New Wave of Competitors needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Reed Supermarkets: A New Wave of Competitors is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Reed Supermarkets: A New Wave of Competitors is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Reed Supermarkets: A New Wave of Competitors is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Stores Collins needs to make to build a sustainable competitive advantage.
