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Migros Management - Case Study Example

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This paper "Migros Management" responds to that potential encroachment with strategies and recommendations for action, and a plan for implementation, as far as Migros current market advantage was achieved through hard-fought competition from the first day of operations. …
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Migros Management
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Download file to see previous pages Given recent developments, the competition appears poised to move into Migros’ territory; and Migros management plans to anticipate the encroachment with appropriate strategies. This report responds to that potential encroachment with strategies and recommendations for action, and a plan for implementation. First, the situation is defined.
Migros is currently the top performer in Switzerland. Coop is the second-largest retailer. With fewer retail stores, Migros earned 25% market share of food and 18% overall consumer goods. Coop, with twice as many outlets, enjoys a 15% market share.
Three large international companies plan intrusions into the Swiss market. Carrefour, from France, Europe’s largest retailer, currently operates 12 supermarket locations in Switzerland and envisions several more in the near term. Two German firms, Aldi and Lidl, expect to attempt to gain entry into the Swiss market. Legal and regulatory issues confound foreign entry; however, the European Union agreements may lead to loosening of those restrictions.
The three new competitors compete on price utilizing the low service, big-box retail concept. As Europe’s largest retailer and second in the world to Wal-Mart, Carrefour has the financial strength and management systems to compete. Aldi and Lidl view the 8% discounters’ share of the market incredibly appetizing compared with Germany’s 40% share. That gap looks exploitable from their positions.
Traditionally, and certainly among the top retailers now, qualitative competition has been the standard. New regulations and new competitors, independently or combined, may lead to price-cutting and poorer agricultural standards in the food supply. Migros must prepare to respond.
Migros management has identified three strategies in response to the challenge these competitors present. First, improve operational efficiency, logistics, purchasing or organizational structure and pass the cost savings to the buyer. Second, expand the budget line of vertically integrated products and develop cost leadership. Third, compete on premium lines and increase sales of ethical/environmental products. ...Download file to see next pagesRead More
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