We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Case 7,8 Paper

Discussion Question—pg. 549-551 Case 7 Ahold: The Biggest Supermarket Retailer You Have Never Heard Of 1. What are the advantages and disadvantages of the growth strategies pursued by Ahold, Carrefour, and Wal-Mart? Ahold Global Expansion (1970’s—Spain, Portugal, United States; 1990’s—Central Europe, Latin America, Asia) Pro: High penetration in U. S. market. Con: Low penetration in its mother continent. The profit margin for Ahold’s U. S. division is 5. 7 percent, while the profit margin for the European division is only 3. 9 percent of sales.

Pro: High international experience. 34 years since the first acquisition in the United Sates, Bi Lo. Pro: “No other European retailer has been as successful in entering the U. S. market as Ahold. ” Pro: E-commerce. Peapod—one of the first Internet grocers. Pro: Product expansion. (Grocery store in 1887 to liquor and cosmetic store in 1970’s) Cons:Culture adjustment. Acquired many consumer brands. 1977—formerly owned Bi Lo, a South Carolina— based grocery store chain operating about 450 stores, Stop & Shop with 320 stores; 1999—U. S.

Foodservices, America’s second-largest supplier of ready-made meals, prepared foods, and ingredients to restaurants, hotels, and other institutions; 2000—acquired majority stake in Peapod Pro: Continuous Growth. Con: Holds too many brand names. Leads to customer confusion (Stop & Shop; Giant-Landover; Giant-Carlisle; Martin’s; Peapod; etc. ) Wal-Mart & Carrefour Pros: • Global Branding. ? Only use one brand name. Avoids confusion. Creates loyalty. • Large discount department store. Attracts more patrons. Cons: • Low penetration in E. U. 2. Should Ahold use its name on all of its stores like Wal-Mart and Carrefour?

We will write a custom essay sample on Case 7,8 specifically for you
for only $16.38 $13.9/page

Order now

Why or why not? Yes, Ahold should use its own name in all its stores. • It improves brand awareness of customers. ? Brand recall ? Brand recognition • It creates corporate identity. • Evoke loyalty. • Increase market share. • It helps in developing own private label brand. • It helps in penetrating a market. • Establish corporate consistency. 3. What are the advantages and disadvantages of Wal-Mart’s and Carrefour’s more centralized decision making compared with Ahold’s decentralized decision making? Ahold’s Decentralized Decision Making |Advantages Disadvantages | |Allows organizations to take advantage of division of labor by |Lower-level managers may have objectives that are different | |sharing decision-making across the organization. |from the objectives of the entire organization. For example, | |Empowers employees and allows them to improve their performance by|some managers may be more interested in increasing the sizes | |being able to act to improve deficient or inefficient areas |of their departments than in increasing the profits of the | |immediately without approval from the top of the organization. company. | |Allows the managers of business areas to actually use their first |There may be a lack of coordination among autonomous | |hand knowledge and experience to improve their areas. |managers. | |Top management is relieved of much day-to-day problem solving and |It may be more difficult to effectively spread innovative | |is left free to concentrate on strategy, on higher level decision |ideas. Someone in one part of the organization may have a | |making, and coordinating activities. traffic idea that would benefit other parts of the | | |organizations, but without strong central direction the idea | | |may not be shared with, and adopted by other parts of the | | |organization. | Wal-Mart & Carrefour’s Centralized Decision Making |Advantages |Disadvantages | |Top-down Control. Risk is great if the top of the organization becomes | |Uniformity of activities. Obviously when centralized, the |incapable of leading the organization. | |activities will be either in the hand of one individual or a few |Employees also will feel less motivated to perform for the | |one but under his (one) direct, control. This will result into |organization as they will not have an avenue for sharing | |uniformity of activities and thereby ensuring uniform decision and|their ideas on how to improve the organization. | |uniform process. |Lack of secrecy.

Secrecy in a centralized set up cannot be | |Quick decision making. |maintained as the orders and decisions flow from one place | |Effective control. Uniformity in activities, specialization and |and conveyed to all. Moreover, all work at a place, under one| |standardization facilitates greater degree or supervision, |roof, one control and one office department. Thus secrecy | |effective co-ordination, self and departmental integration and |even if tried cannot be maintained as effectively as might be| |thus ensure effective control. |required. | |Low communication cost. |Distinctive to Subordinate.

A mechanical working always | |High ability to resolve conflicts. |creates mental reservation. The subordinate does not take | | |imitative nor is he allowed to do so. Thus there remains no | | |charm in either the work or the organization as he knows | | |fully well that no upper ladder is there for him as he is not| | |allowed to take any initiative. Case 8 Competitive Environment In the Teen/College Apparel Market 1. What, if any, are the differences in A&F’s and AF’s retail strategy? |Abercrombie and Fitch |American Eagle | |Same Target Market |Mostly teenagers | |Offer similar merchandise | |Casual wear for men, woman, kids | |Accessories, outwear, footwear and sweaters | |Dorm Wear and intimate apparel |“a little cheaper” | |More expensive |Have more stores compared to A&F | |Targets higher class teenagers | | |Hollister Co. that compete with AE’s lower prices | | 2. What are the brand images of A&F and AE? What words and phrases are associated with each retailer’s brand name? Abercrombie and Fitch |American Eagle | |Trendy and Sexy | |Emphasizes higher class teens and young adult |cheaper compare to its competitor the image of such brand is less | |More effective emotional appraisal |attractive | | |“A little cheaper” | 3. List other specialty apparel retailers that target the same customers as A&E and AE. How do these brands differentiate themselves in the competitive retail environment? Construct a product positioning map to illustrate. Gap ? Level of Prices • Bases: ? Discount ? Middle Price ? High Price ? Targets a great group of customer • Old Navy (low price) • Gap (middle price) • Banana Republic (high-end price) 4. Which retailer(s) has (have) the stronger competitive position? Why?

How to cite this page

Choose cite format:

Case 7,8. (2018, Jul 22). Retrieved from https://paperap.com/paper-on-case-78/

We will write a custom paper sample onCase 7,8specifically for you

for only $16.38 $13.9/page
Order now

Our customer support team is available Monday-Friday 9am-5pm EST. If you contact us after hours, we'll get back to you in 24 hours or less.

By clicking "Send Message", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
No results found for “ image
Try Our service