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Reed Supermarkets: A New Wave of Competitors - Essay Example

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Reed Supermarkets: A New Wave of Competitors

Reed seeks to provide quality products to its customers which have in turn added to its high degree of customer loyalty. The outlets of Reed Supermarkets are attractive and offer services for long hours. Moreover, the outlets are decorated with well-designed serving-case displays. Reed has also adopted various promotional activities in order to improve its attractiveness amid customers which have increased customer preferences towards the organization. The employees of Reed are well-trained. Additionally, the organization follows a high-staffing level which ensures that customers are provided with quality services. Reports depict that Reed’s quality index has been stable at around 8.4 over the years 2008 to 2010. The margin was apparently better than many market players which reveal that the company has been able to obtain a leadership position in the industry. Weaknesses The customers of the market segment of Columbus are observed to be less loyal toward a particular product or company and thus, Reed may not be able to acquire a permanent base of customers. The customers of the food retail industry are price sensitive and are inclined towards low-priced products. These factors may affect the performance of Reed, as the products are offered at high prices. This can be observed with reference to the below chart. Figure 1: Feedback of 250 Columbus non-customers for not shoping at Reed Source: (Quelch and Carlson, “Reed Supermarkets: A New Wave of Competitors”) The locations of Reed outlets are observed to be affecting its operations, as its stores are located far from customer reach. The marketing strategies of Reed proved ineffective at the time of the economic downturn, during the year 2008-10. This depicts that its marketing approach lacks flexibility to adjust with the external market environment. Opportunities The stable market conditions of Columbus are likely to assist Reed in operating its business operations successfully. The customers are perceived to be health conscious deciphering greater demand more for organic food products. Hence, Reed has an opportunity of enhancing its business operations and performances as it focuses more on quality and organic products. The demand for retail food products has increased in Columbus which can aid Reed to enlarge its business operations. Political/legal The US political and legal systems are stable as well as strong which may assist Reed to operate its business functions efficiently without much government interventions. The political and legal systems of the US are favorable toward various business expansion strategies. In this context, the US attracts huge amounts of foreign investments in its corporate sector which may assist in improving the economic condition and thus prove beneficial for Reed. Economical The US has faced recessionary effects during the period of 2008-2010. However, the economy revived from the crisis situation rapidly which in turn increased the spending capacity of customers. After the recession period, spending on grocery items was observed to be around $5,200. In this respect, the performance of Reed can improve with better profitability margin (Quelch and Carlson, “Reed Supermarkets: A New Wave of Competitors”). The disposable income for households was reported to be around $52,000 in Columbus in the year 2010 depicting a substantial increase in the spending of customers for grocery and food products (Quelch and Carlson, “Reed Supermarkets: A New Wave of Competitors”). This factor is further quite likely to assist ...Show more
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Reed is perceived to face intense competition from national and international food retailing companies. The development of the food retailing industry in the US has facilitated foreign companies to enter the national market segment with better and innovative products. …
Reed Supermarkets: A New Wave of Competitors
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