Reed Supermarkets: a New Wave of Competitors

beating-reed instrument Super grocery stores. Spring 2013Meredith Collins faces the difficulty of choosing the most appropriate grocerying dodging for reed Supermarkets to implement so that the bon ton increases its market share in the capital of Ohio, OH market from 14% in 2010 to a target of 16% in 2011. This goal should be pure(a) in spite of the new competitive challenges posed by the rise prominence of long horse mark and limited selection stores in the food sell industry.SWOT AnalysisInternal Strengths reed instruments quality image and exceptionally attentive customer expediencyFull range offeringsAttractive stores, long hours, and elegant service? case displays.Internal WeaknessesMany consumers perceive vibrating reeds prices are high crownwork exp abolishiture policy freezing 3. No consensus within attention on what strategy to implement for market share growth.External OpportunitiesThe new consumer is more savvy, wellness and appeal? consciousGrowth of insul ar stigmatise merchandise 3. Columbuss economic environment is more favorable than states and nations economic environmentsExternal Threats Dollar and Limited infusion Stores increasing market share / Aldis projected new stores sparing downturn . Significant dwindling of customer loyalty. vibrating reeds management is soon assessing the fol low gearing alternatives to increase its market share in the Columbus marketContinue its ongoing dollar special campaignTerminate the dollar special campaign and implement an everyday low price mock upConvey the value created to consumers by reinforcing the range and quality of offeringsIncrease low priced specials, expand private label brands, and introduce double couponing.In addition, I would in addition consider the following alternative Make an offer to buy some of Galaxys troubling Columbus stores.In evaluating the aforementioned alternatives, Reeds management will view to take into account that, in aver to meet the targeted market share of 16% in 2011, they will have to increase their gross sales volume by $94 million, which represents a 14% increase compared to 2010 (see appendix). The present dollar special campaign was an attempt from Reeds to change consumers perception that they have higher prices. more or less Reeds managers are confident that in an separate half-dozen months they will be able to change this perception while, at the selfsame(prenominal) time, they reinforce customer loyalty.However, some executives believe also that the campaign detracted from Reeds quality image as it seemed to be too keep mum to the offering of dollar stores which could damage Reeds image with association. The scope of this campaign (250 out of 50,000 items) does not seem sufficient to become the additional sales required. Other executives suggest implementing an everyday low pricing model in order to tackle, in a more hostile fashion, the high? priced image that Reed carries. This would likely require a real ized switch of the companys positioning from a high? nd store to a medium, more value? focused positioning. Reeds image, as a quality and customer service oriented, could be super damaged by such a switch. Additionally, it would be expected that other discount stores would be reacting aggressively to this strategy. Another option is to reinforce Reeds current positioning as a high? end store by emphasizing the range and quality of its offerings. Such strategy appeals to the more affluent households, which are more keen on superior private labels and organic produce.This customer segment has been the backbone of Reeds growth in the past 20 years, and the company wants to be sterilize to satisfy its upscale tastes as the economy recovers. Operations conductor Jane Wu offered moreover another alternative increase low? priced specials, expand private label brands, and introduce double couponing. The new consumer that emerged from the 2007? 2009 recession is more savvy and cost? cons cious, which is demonstrated by the increasing share of wallet captured by dollar and limited selection stores.By acknowledging this new reality and resorting to the strategy suggested by Director Wu, the company can potentially attract new customers and appeal to twain fill? in trippers and full grocery runners. This seems to be a arduous strategy in order for the company to capture, in the short? term, the $94 million additional sales required to meet the target market share. It is unclear, however, if this strategy could hurt the quality image recognized to Reeds supermarkets and as a result drive high? nd customers away. On the other hand, during difficult economic times, such as the downturn of 2008? 2011, consumers run away to opt for value. Finally, we should not discard the introduction of new stores as a strong alternative for increasing sales. The company has consistently expanded the string in the past, with the new stores accomplishing similar results to existing one s. Reeds management has made it clear that it does not wish to have capital expenditures in form of new stores in 2011.But, a struggling Galaxy kitchen stove in the Columbus market could represent an interesting opportunity for Reed to acquire some of its stores at a discounted price, and this way meeting the sales volume required for the 16% market share. Given the resistance from Reeds management to resort to additional capital expenditure, my recommendation is that the company implements the alternative suggested by Director Wu, i. e. increase low? priced specials, expand private label brands, and introduce double couponing. For the