Shopping Bags - Case Study Example

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Shopping Bags

The company has traditionally held the view that new acquisitions are as close to Barcelona as possible because logistics costs can be kept down. Opening new stores so far away from Mercadona’s central location is a huge risk and has the potential to backfire. The reason why Mercadona chose to expand to these coastal towns is that competition is fierce in Barcelona and there is not much room for growth. Mercadona sees Cartegena, Albacete, etc. as open for competition between market competitors was small. Mercadona’s main rivals in these areas are independent grocers, traditional stores, and only a few hypermarkets. Many of the large chains have stayed away from these low population areas because the target market is much smaller than it is in Barcelona. Mercadona used to primarily operate as a warehouse and distributor. The company’s efficiency of its logistic system allowed it to offer lower prices than many of its competitors. However, this strategy has been refined over the past few years and the company is now officially a retailer. Instead of targeting consumers on the low end, Mercadona now focuses on high quality products and has also diversified its range from standard food and beverages. ...Show more

Summary

Shopping Bags 1. Although Mercadona has not been as successful as its main competitors, the signs for the company in the future are positive. Sales grew by 30 percent from the previous year to 300,000,000 Euros. While sales alone cannot be used to measure success, it does show that the company is moving in the right direction…
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