The Mission of Wegman Foods - Case Study Example

Strategic Choice and Evaluation Philosophy of Wegman Foods The philosophy of Wegman Foods is mentioned below: “At Wegmans, we believe that good people, working toward a common goal, can accomplish anything they set out to do. In this spirit, we set our goal to be the very best at serving the needs of our customers. Every action we take should be made with this in mind.” (Wegman Foods, 2010) Mission of Wegman Foods As per Wegman Foods website, the mission of the company is to serve their people and the customers their best, every day (Wegman Foods, 2010) Goal of Wegman Foods The mission of Wegman Foods has propelled it to aim for the goal of best in the industry in serving people. By serving the best, Wegman implies to provide the largest choices of the products and convenience to the customers (in the form of experience). Best Value Discipline Value Disciplines, vary in different stages of the lifecycle of the organization. From the internal and external environment analysis of Wegmans we found that the organization is a regional player with plans to grow nationally and ultimately operate internationally. The strength of the organization includes excellent rapport with the staff. Wegmans not only stocks large varieties of food items but also spends in training its staff so as to they may help the customers in making the right choice. It enjoys high goodwill among its customers. Hence, Wegmans should adopt the strategy of excelling in the customer intimacy form of value discipline. It should excel in customer attention and customer service. This strategy would be in line with the current direction of the organization’s activities. Wegmans stocks large varieties of food to meet every need of the customers. For example, it stocks almost five hundred varieties of cheese to meet any cheese related demand of its clients. Therefore, we find that Wegmans is already providing nearly tailor made solution to its individual customers. It just needs to take some conscious steps to spread its efforts throughout its line of products to exceed customer expectations. Generic Strategy Porter’s generic strategies are based on competitive scope and competitive advantage. We find that Wegmans aims at a broad spectrum of customers. It caters to most of the segments of the people and currently does not focus on any niche market. This rules out the possibility of employing Cost Focus and Differentiation Focus strategies which aim to provide cost advantage and differentiation advantage (respectively) to a focussed set of customers. From all the secondary research done, it was found that Wegmans, unlike Walmart, does not employ low cost as its strategy. With high investment in improving the quality of staff, its operating costs are rather higher than industry average. Since it cannot afford to minimize costs and sell at average prices (to make high profit) the strategy of Cost Leadership is also ruled out. Thus we zero down at Differentiation Leadership as the strategy for Wegman Foods. By stocking almost all variants of certain food items under one roof, Wegmans can create a difference in its offerings. Wegmans’ new stores are of the average size of 120,000sq feet which is around three times the industry average. This gives it the opportunity to provide one-stop shopping experience to its customers. Also, it is already taking steps in the direction of training its staff so as to provide advisory assistance to the customers who are not sure of which one to choose among several products. Wegmans already enjoys goodwill and brand image of a very good supermarket among its customers. This would further help in differentiating Wegmans from other supermarkets. However, it still needs to do effective sales and marketing to ensure that its premium image is conveyed to other prospective consumers also. Also, they should maintain a constant focus on ways to improve service delivery to customers. Thus, Differentiation Leadership sounds to be the most appropriate strategy among all other generic strategies for Wegmans. Grand Strategy Wegmans Foods faces strong competition from other national and regional supermarkets in America. As per a study, there are more than 40,275 grocery stores( including supermarkets) in America (Plunkett Research, 2010); all of which come under the ambit of competition for Wegmans. Certain Supermarkets (like Walmart) are even internationally known for their lower propositions. With the growth of the population, not only the demand of the food items has increased but also the demand for better accessibility to these food items. Supermarkets have given the consumers the freedom to take their own time in making comparisons between products in a comparatively modern ambience than mom and pop stores. The range of products available at the supermarkets is huge along with competitive price tags. All these factors have contributed to the fast growth of supermarkets in US. However, deflation and weak economy in 2008-9 has pulled down the industry growth by 0.2% in 2009 as compared to previous year (Supermarket News, 2010). Thus it is evident that fast pace growth of the industry has been halted and now the industry is growing at a slow pace. Considering the strong competition and glow growth industry nature, it is advisable that Wegmans opts for Combination Strategy. Combination strategy calls for a mix of stability strategy and growth strategy. It is advisable that Wegmans looks into Conglomerate diversification of product line which would enable it to become one stop food market for all its customers. The time is ripe for conglomerate diversification since the basic industry of supermarkets in America is facing a downfall in sales. Thus Wegmans Foods should pounce upon the opportunity when a new business is up for sale. Multi-business Strategy Multi- business strategy can be arrived at by use of BCG Matrix or Boston Consulting Group Matrix. The matrix consists of Market Share and Market Growth Rate variables- High and Low. Wegmans Supermarkets although are mainly in food business, they have several diverse lines of products in food itself. Some of their lines of products include: bakery , beer, kosher deli, pizza pub , sub shop etc. However, trying to find out suitable strategy of Wegmans through BCG matrix would not be quite correct because of the following reasons: Its main business is supermarket; rest all is an addendum to supermarket Some of its products hardly fetch anything but still they are kept in the stores because they are crowd pullers. Hence they cannot be eliminated from the product line classifying them as Dogs. Final Recommendation As per the discussion above, we find that among value disciplines, customer intimacy is most suitable for Wegmans Foods. Also, in generic strategies, the strategy of Differentiation Leadership goes well with the philosophy of the organization. Among grand strategies, the strategy of combination of stability and growth sounds to be the most appropriate for the organization. Thus, we recommend that a combination of customer intimacy and differentiation leadership should be adopted by the Wegmans as its main strategy theme. The above mentioned combination is perfectly in line with the mission of the company to serve their employees and their customers the best, every day (Wegman Foods, 2010). Also, this will ensure that Wegmans does not fall for cost related strategy since the differentiation created by cost related strategies is hardly sustainable and easily imitable. Wegmans Foods is already on the lines of creating differentiation through nurturing its workforce; the application of the suggested strategies will further propel its differentiating factor. Bibliography Plunkett Research. (2010). U.S. Food Industry Overview. Retrieved December 14, 2010, from Plunkett Research: http://www.plunkettresearch.com/Industries/FoodBeverageTobacco/FoodBeverageTobaccoStatistics/tabid/248/Default.aspx Supermarket News. (2010, 2010 December). SNsTop 75 Retailers for 2010. Retrieved December 14, 2010, from Super Market News: http://supermarketnews.com/profiles/top75/2010/index1.html Wegman Foods. (2010, December). Company Overview. Retrieved December 13, 2010, from Wegmans: http://www.wegmans.com/webapp/wcs/stores/servlet Read More