Normal Business Operations - Essay Example

?During the of normal business operations, each and every business entity faces a series of choices and dilemmas that help to direct it with regards to what future course it should pursue. In such a way, very much the same is true with regards to the case study which was provided for this analysis concerning Reed grocery stores. Within this understanding and appreciation for the means by which key strengths, weaknesses, opportunities, and threats define the way in which this particular store will continue to integrate with customers in the near future, the following analysis will seek to provide something of a SWOT analysis with regards to this chain in the hopes that by understanding these key areas, the analyst will be able to define and appreciate the areas of opportunity and potential threats the firm faces both in the present and within the near future. Strengths: Firstly, with regards to the key strengths that Reeds grocers have within the current market, these can basically be understood with regards to the fact that they have established a resilient and well respected brand image among the client base and they also exhibit a resilient strength of the size and scope of their grocery store locations and offerings. Starting from a humble family owned beginning, Reeds transitioned over time, just as have so many other small firms, to encompass a great many stores and a wide variety of product and service offerings. Moreover, consumers of the firm have come to respect them within the world of grocers. This market presence along with a substantive level of respect and appreciation by a rather large client base is a net asset as well as a definitive strength upon which the firm can seek to leverage any further market growth or development within the near future. Weaknesses: As with any firm, Reeds is not without its weaknesses. The first of these is the fact that the firm is a developed one that has earned it something of a static image among consumers. Ultimately, due to the fact that the firm has been within the market for quite a period of time without engaging in many, if any, efforts at brand re-imaging, the consumer is oftentimes tempted to view the grocer as stoic and not as relevant with the current market as other of the competitors which were listed within the case study. Another key weakness that the grocer faces is with regards to the fact that it cannot count on loyal consumers to carry it through economically difficult times. Whereas in the past grocers could count on loyal consumers to continue to derive a degree of revenue/sales, the current model indicates that less and less consumers are ultimately loyal to a single grocer and choose instead to shop many grocers in an attempt to maximize their savings. This represents an effective weakness that the firm is no longer able to attract and retain loyal consumers within a market that is more and more cut throat with regards to overall earnings and sales. Opportunities: Political/Legal With regards to the political/legal opportunities that the firm should seek to leverage, it is the understanding of this analysis that the firm, as well as any and all other firms within the system, should continue to engage with law makers and governments (at both the regional, state, and federal level) to continue to lobby for tax breaks and business incentives so that they may continue to provide the most basic of goods to the consumers that they provide for; the need of sustenance. Economic Similarly, with regards to the economic opportunities that the firm is faced with, these can be understood with regards to seeking to model their business plan, at least in part, upon the runaway success that many of its greatest competitors have employed; i.e. offering at least a portion of overall goods to be sold as bargain buys and priced within the reach of a specific demographic of consumers that would otherwise be attracted to other stores instead. This serves as an economic opportunity that can be leveraged with very little overall cost to the firm and portends the hope of a very high rate of return as well as the possible retention of an entirely new client base with which they had not previously engaged. Socio-cultural In the same way, rather than merely seeking to speak to the needs of a specific demographic, the firm should realizes that within the cut-throat world of low price competition, the grocer will need to appeal, at least on some level, to as many socio-cultural and demographic levels of society as is possible. Within such an understanding, it will be necessary to engage in a somewhat altered business model and overall offerings and scope of business approach. Technological Although the case study in question was useful in helping to infer many of the strengths and weaknesses that Reeds espoused, it was not indicative of nearly any means by which the firm could seek to leverage the technological revolution as a means of increasing overall sales. As such, one of the most prescient opportunities that has gone almost untapped is with regards to seeking to integrate a type of marketing/advertising campaign utilizing personal mobile devices and the world wide web to engage with more consumers/potential clients than is currently done. Environmental Ultimately, there are few environmental aspects of opportunities that the firm can seek to engage upon unless of course these can somehow be concentric upon seeking to differentiate key product offerings within certain markets. Ultimately, the necessity for food is something that leaves little for Reeds to do in order to maximize the environmental opportunities that it might otherwise experience. However, it must be stated that the firm should seek to engage with a large number of suppliers from around the country and around the globe as a means of defraying any threats that might be exhibited as a result of one particular supplier having an especially bad harvest due to economic conditions of one form or another. Threats Political/Legal As has been stated above, a key political/legal threat is with regards to any tax increase that might take place and adversely affect the narrow profit margins that the firm is able to enjoy. Due to the fact that Reeds, just as with many other grocers and firms, operates at the very margins, it is a highly dangerous situation if even a small increase in tax was affected within the market for grocery stores. Economic The most salient threat that Reeds faces is with regards to the dwindling amount of resources that the average consumer has at their disposal. Ever since the economic meltdown of 2007/2008, grocery stores are still seeking to fulfill the needs of their clients but without the added benefit of deriving a high level of profit in the process. As budgets have shrunk, so too have the profit margins for grocers and other stores such as Reeds. Socio-cultural With regards to the socio-cultural threat that the grocer faces, this can be understood within the context of the firm coming to be viewed by the consumer as specifically targeted to a particular demographic group. Although this has oftentimes been the case with other grocers, Reeds should seek to shun such an image and attempt, at all costs, to represent itself as a grocer for all individuals; regardless of their socio-economic status or particular demographic. Only within this understanding can the firm seek to continue to provide high quality of service to a broad range of potential clientele. Technological Due to the fact that this grocer has not engaged in technological integration with the consumer, this is a severe threat to potential and future profitability. As a means of ameliorating this threat, it is necessary for the firm to immediately seek to engage in this level of marketing to potential clients and abandon the prior model of non-integration that it has previously pursued. Environmental As has been discussed previously, few if any environmental threats exist for this firm; however, due to the fact that produce from round the world is particularly prone to famine, drought, or other environmental threats, it is necessary for a grocer such as Reeds to ensure that it has a level of backup suppliers for these goods so that if one particular supplier is not available, the prices will not be exorbitant to the client and the profit margin all but gone for the seller. Greatest Threat From the analysis that has thus far been conducted, it is the understanding of this author that the greatest threat that exists is with regards to the economic realities that constrain the clientele of this grocer. Due to the fact that the recent economic hardship is fundamentally felt at the level of the local grocery store with regards to consumer choices and the level of discretionary funding that the consumer is willing and able to spend, this definitively constrains the overall profits that such a firm would otherwise hope to engage in. Dollar Specials With regards to whether or not the “dollar specials” should continue to be engaged, is the understanding of this particular author that the answer to this is a resounding yes. Although it may not be the case that Reeds is able to derive a great measure of profitability from these dollar specials, the fact of the matter is that by providing them to the consumer they are able to integrate with an entirely different socioeconomic and demographic strata that they had previously not engaged. Once these individuals are in the store, even if Reeds experiences a net loss with regards to these dollar specials, it is invariably the case that they will also purchase other necessary food items and add to the overall level of profitability that can be derived. Strategic Options As has been identified within the analysis, there are a level of strategic options that are presented to Reeds within the current market. The first of these is with regards to seeking to integrate the technological revolution with the overall product availability and marketing. The second is seeking to engage with previously unengaged socioeconomic/demographic strata. Finally, it must be understood that the firm could use a definitive rebranding and reimaging as a means to freshen up the image and introduce new potential clients to the product offerings and services that they provide. Read More