Business Policy And Strategy : Grupo Elektra

Write an Industry Analysis or Case Analysis of (Grupo Elektra)   from 2- 4 pages

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Identification

Just like other super, Oliver’s Market has issues relating to completion. One element that has enabled this organization to be successful in its operations is being natural and local gourmet food store in the market (Oliver’s Market, 2017). The organization has been able to take the respective customer base into consideration. There are many other businesses that are offering products that are similar to those being provided in Oliver’s Market, such as Whole Food Market Company. These competitors are very aggressive and they are after the market share that Oliver’s Market has. Stiff competition and reduced level of differentiation is negatively affecting the good performance the company has had over the years. Those competitors that are creative and innovative in the market are gaining ground. They are recording better performance.

Analysis and evaluation

Performing SWOT analysis can see positive and negative aspects of operations of Oliver’s Market. Among the strengths of the company is that there is a good brand name due to good company’s reputation. Also Oliver’s Market provides a wide variety of products. The company is trying to offer customers products that are fairly priced (Oliver’s Market, 2017). The final strength is that that the organization has a good growth strategy directed towards occupying new markets.

The major weakness is low level of differentiation. Additionally, innovation is not so much in the company. When it comes to opportunities, there are many markets that company can open its stores in so as to increase its reach. Also, the product range can be increased so as to have different things. The biggest threat being faced is that there are many aggressive competitors in the market that makes the level of competition to be very high (Raju, Sethuraman, & Dhar, 2005).

Reduced performance due to low level of differentiation and stiff completion can be evident through looking at a few ratios. The gross margin went down from 36.37 percent in 2015 to 36.23 percent in 2016. Also, the net profit margin for the company went down between the years 2015 and 2016. The margins were 3.81 percent and 2.58 percent. In the year 2015, the return on assets was 24.45 percent while in 2016 the percentage was 16.89 percent. Finally, return on sales also reduced from 3.56 percent to 2.38 percent.

Recommendations

The management of Oliver’s Market should make the company to stand out of the crowd. The crowd, in this case, is the many competitors that company is competing against. Provision of similar products makes things worse. The recommendation is that the level of differentiation should be increased. The Oliver’s Market should have things that are unique compared to those of other competitors. Also, there need to be increased innovation in the company. Increased innovation will encourage the production of differentiated products and services that match the needs of customer in the market. The management of the organization can also try to select and recruit employees who are talented and creative. Having a workforce that is creative and talented will increase the level of innovation. This will enable the organization to produce products and services that are very different from those of other competitors in the market. Doing all these will increase performance. This means that the financial ratios will show an increase instead of decrease that is being evident.

References

Oliver’s Market. (2017). About the company. Retrieved from www.oliversmarket.com

Raju, J. S., Sethuraman, R., & Dhar, S. K. (2005). The introduction and performance of store

brands. Management science41(6), 957-978.