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Management in Action

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A group of investors in your city is considering opening a new upscale supermarket to compete with the major supermarket chains currently dominating the city's marketplace. They have called you in to help them determine what kind of upscale supermarket they should open. In other words, how can they develop a competitive advantage against existing supermarket chains?

1. List the supermarket chains in your city, and identify their strengths and weaknesses.
2. What business-level strategies are these supermarkets currently pursuing?
3. What kind of supermarket would do best against the competition? What kind of business-level strategy should it pursue?

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Step 1
The supermarket chains in my city are Kroger, Wal-Mart, and Macy's. The strengths of Kroger are that it offers a wide range of products. It offers sales and discounts to its customers. Kroger has an excellent range of private brands. The weaknesses of Kroger are that it does not easily compete on price with Wal-Mart, its sales and discounts are temporary measures to get in customers, and it does not have a long-term strategy to keep prices low.

Wal-Mart's strengths are low prices, with a wide ...

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