Olivers Market What are the key elements of the strategy at Olivers Market? Price Low pricing is a key marketing strategy for Oliver’s Markets. This marketing strategy entails pricing the Oliver’s Markets products at a price 8-10% lower than its main competitors, such as Safeway (Gilinisky, McCline and Moore, 378). This way, customers are able to get the same kind of products they purchase from Oliver’s Markets competitors, yet at a lower price. Quality The focus of Oliver’s Markets is to offer high quality products to its customers, through ensuring to obtain its retail products from sources that are highly regarded by the customers.
The quality strategy acts to complement the low-pricing strategy, through the combination of high quality products that retail at relatively lower prices. This way, it becomes possible for Oliver’s Markets to be able to offer the customers value for their money (Gilinisky, McCline and Moore, 379). Unique customer service Oliver’s Markets has uniqueness in customer as its key strategy, build on the capacity to provide rare commodities that are not easily found elsewhere. Oliver’s Markets has the culture of taking the customer requests seriously, and thus plans to avail the requested products to the customers, even when such products are not benefiting the store through high sales or profit margin (Gilinisky, McCline and Moore, 379).
The organization seeks to offer products that may not be easily availed by the other retail competitors, while at the same time ensuring to offer a limited range of self-branded commodities. This way, the customers are able to define Oliver’s Markets as a store that offers the commodities lacking elsewhere, making it easy for the customers to identify with it. Management autonomy and good employee schemes Oliver’s Markets allows its departmental managers to act independently in matters of decision-making regarding the way the departments should be run.
This way, the managers operate the departments as independent businesses, with decisions such as the negotiating for prices and determining the prices to offer to the customers being independently made by the managers (Gilinisky, McCline and Moore, 382). The employees are also given the independence to dress, such as the male staff being allowed to wear wearing, while their salaries are also competitive.
This way, both the management and the employees are highly motivated. What competitive pressures must Olivers Market be prepared to deal with? Oliver’s Markets must be prepared to deal with the entry of non-traditional supermarkets, such as the club warehouses, and discount supercenters such as Costco and Wal-Mart respectively (Gilinisky, McCline and Moore, 369). The entry of such non-traditional supermarkets create another level of competition that traditional supermarkets such as Oliver’s Markets may not be able to meet, especially due to their economies of scale advantages. The increased labor costs is yet another competitive pressure that Oliver’s Markets must be prepared to face, due to the fact that the entry of the non-traditional supermarkets into the market, coupled with the rise of the unionized labor forces causes the prices of labor to increase by a higher margin.
The change in the shopping patterns and lifestyles of the population also means that Oliver’s Markets must face the competitive pressure the need for prepared foods by the customers, who often opts for the fast-food outlets (Gilinisky, McCline and Moore, 369). What are the key success factors for competing in the supermarket industry in Sonoma County? Good human resource, resulting in a productive workforce that is creative and talented is a key success factor for supermarkets operating in Sonoma County.
This is because; with a productive and well motivated workforce, the costs of labor turn over are low. This enables the supermarkets to capitalize on the labor force and increase profitability. Low pricing is yet another key success factor for supermarkets in Sonoma County, since it makes it possible to attract more customers, and thus increase the sales and profitability.
The rate of house leases and the location of the houses is another key success factor for supermarkets in Sonoma County, since it determines where the supermarkets will be located, and consequently their accessibility to customers and suppliers. What is your assessment of Olivers financial performance and financial condition? Is the company in good financial shape? Why or why not? Oliver’s Markets is not in good financial shape. This is because, the supermarket’s financial performance has been declining, when perceived from its sales, which have dropped consistently since the year 2002, from an initial total sales of $20,230,800 to $19,252,200 in 2003 and then to $19,355,300 in 2004 (Gilinisky, McCline and Moore, 372).
Similarly, the net pretax profitability has been declining from $1,112,000 in 2002, to $807,600 in 2003 and further lower to $734,200 in 2004. Further, the financial condition of the supermarket is not promising, since the assets of Oliver’s Markets have also decreased from $5,223,433 in 2003 to $5,222,948 in 2004 (Gilinisky, McCline and Moore, 373). How does their financial performance compare to Whole Foods.
Are they strong enough to compete? The financial performance of Oliver’s Markets shows a great difference from that of Whole Foods, with Whole Foods having an annual sale of $65 million, while Oliver’s Markets had an annual sale of $40 million in 2003 (Gilinisky, McCline and Moore, 377). Additionally, Whole Food had registered a sales growth up from 8.6% in 2002 to 14.9% 2004, while Oliver’s Markets had registered a decline in sales growth of 4% between 2002 and 2004. This shows that Whole Food is in a better financial position than Oliver’s Markets.
Therefore, Oliver’s Markets is not in a position to compete with Whole Foods. Should they consider expansion, given your analysis? Considering the fact that the sales, profits and the assets value of Oliver’s Markets are consistently on the decline between 2002 and 2004, Oliver’s Markets should not consider expansion. Works Cited Gilinisky, Armand Jr. , McCline Richard and Moore, John. “Case 2: Oliver’s Markets”, 367-386. Print.