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Kroger Is Building Grocery Store Of Future

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Question:

Discuss About The Kroger Is Building Grocery Store Of Future?

 

Answer:

Introduction

This assignment has been executed over the topic “Managing and Leading Strategic Change” in which discussion has been made regarding the challenges faced due to the changes taking place in the environment of the business. An industry has been selected for the purpose of analysing the changes affecting the operations of industry and the manner in which these challenges are dealt with by the managers or leaders. The future approach has been applied for identifying the impact and influence changes in the environment on the business. Ideas and theories have been applied for responding to the challenges faced by the business due to the changing environment.

Select and justify an appropriate focus for the briefing document. (i.e. chosen sector/industry etc.).

According to Durvasula & Lysonski (2010), aspects of the business environment are changing due to various reasons. It is vital for organizations to identify these changing requirements and implement strategies for coping with the changing aspects. Every industry is getting affected due to the changing business environment. The retail industry has been selected for this assignment. Reasons behind the selection of retail industry are the increasing scope of the industry and its direct communication or interaction with the end users. There is a need to adopt strategies for implementing changes which results in a change in the manner retail sector is operating.

There are various challenges which are being faced by the retail sector. These challenges are the result of a change in the environment in which business exists. There are various factors which create an impact on the success of the retail sector. These factors include store factors, prices, the supply chain of the retail company, technology used, service factors and merchandise (Nsimbi, et. al., 2015).

The retail sector is directly dealing with the end users and faces challenges which are the result of changing aspects of the environment. Retail sector need to analyse these changes and analyse the impact of these changes on the performance of the retail sector. The retail industry has faced challenges due to the increase in the use of internet retailing. 100 % population of Singapore is living in the urban areas. Reasons behind the growth of the retail industry of Singapore are increasing population, increasing purchasing power, change in the trends, economic growth and entry of international companies in the Singapore retail market. Per capita income of Singapore is high which has contributed towards the growth of the retail sector of Singapore (Gunnion, 2017).

The retail market needs to analyse the changes in the environment in which it exists on a regular basis. Every industry must analyse the changes for ensuring that these changes are not creating negative impact on the performance of business. Key challenges which are being faced by the retail industry are the management of data, technological innovations and many more. It is vital to comply with the changing requirements of the business environment for gaining competitive advantage (Lee, 2013).

 

Using a “future” approach, research and identify the significant trends and drivers of change that are likely to influence and impact on organizations operating within the chosen sector/ industry.

Changing aspects of the business environment have the potential to create an impact on the operations of the retail industry. These trends and drivers for change are discussed below:

Economic downturn: economic conditions of a country changes due to which operations of the business may get affected. Economic conditions may get changed due to the change in the interest rates, inflation rates, taxes, demand and supply, exchange rates and recession (Teh, 2016). Economic changes which are taking place in a country are not in the control of an industry as these depend on inflation, unemployment rates and GDP. Economic downturn results in decline in the profits, affects research and development process of companies, fall in the stocks and impact on the quality of goods or services. For example, the economic downturn has created an impact on the profits of Tesco. Profits of Tesco in 2008 were £1.45bn and in 2009 were £1.46bn (Hall & Fletcher, 2009).

Political and legal pressure: change in the labour laws, work place safety laws and rules and regulations formulated for regulating the actions of retail industry can result in adverse impact on the operations of a business. Political and legal frameworks are set by the government of the country so as to regulate the operations of the different industries. Non-compliance to these frameworks set by the government can result in fine or penalties against the companies and closure of the business. For example, an audit was conducted on the Factory of Apple in China. In that audit, it was identified that the employees were not paid for the overtime, working for excess hours, interference of management in the matters of trade unions and failure in matching healthy and safety standards (Garside, 2012).

Technology innovation: technological changes are taking place at a very fast speed which has resulted in adverse impact on the operations of companies. The increase in the number of people using the internethas affected the offline stores of the retail industry (Teh, 2016). Innovations are implemented for enhancing the effectiveness of the operations and reducing burden of the business. Technological changes can result in increase in the competition in the industry and operations of the business. For example Kroger, a retail company has started operating through a mobile app and online ordering platforms for attracting customers and enhancing the customer base (Taylor, 2015).

Improvement in the structure of company: structural changes can affect different departments of the company at large. These changes must be dealt in an effective manner for ensuring that it doesn’t create an adverse impact on the functioning of the business (Tudor, 2014). Structural changes are implemented for utilizing the resources available in an effective and efficient manner. Change in the structure of the company takes place due to the change in market place, change in the process and duplication of job. This change in the structure helps business in preparing for the change in policies.

Increasing competition: competition is increasing as new entrants are entering the market and attracting customers towards them. Companies have started using innovative technologies, strategies including discounting or offers for gaining a competitive advantage over the others in the industry. Competition cannot be controlled as new entrants are entering the market with a motive to earn profit. Competition promotes better employment opportunities which contribute towards better economy. This change will result in better quality products and services for the customers and may promote unfair practices in the industry for gaining competitive advantage over the others. For example, Amazon is operating online shopping service to its customers which have helped in gaining a competitive advantage over its competitors including Target and Wal-Mart (Levy, 2016).

Socio-culture change: change in the needs and demand of customers due to the change in the trend can also affect the operations of the business. Products and services are being offered as per the needs and demands of the customers (Teh, 2016). Change in the needs and demands can be analyzed so as to cope with the change and enhancing the performance of the business. This can create impact on performance of the company. For example, Wal-Mart has changed its business strategy so as to attract the customers. Change in the business strategy was due to the increase in the level of competition and meeting the changing demands of the customers. Everyday low prices strategy was adopted by Wal-Mart (Dudovskiy, 2016)

 

Given the trends identified above identify two or three key areas of change that managers/leaders within organizations may be required to work with.

There are various changes which must be analyzed by business for improving the performance of the business. Managers or leaders need to deal with these changes or trends so as to eliminate the adverse impact of these changes or trends on the performance of the business. Coping with the changes or trends taking place in the business environment contributes towards the enhanced performance of the organization. Major areas of change which managers need to work with include political or legal pressure, technological innovations and structural changes.

Change in the rules and regulations formulated for guiding the actions of companies need to be analyzed and adopted by the companies. Managers need to comply with the changing legal aspects formulated for ensuring the operations of business within the legal framework. Various laws have been formulated for the health and safety of the employees at the workplace which must be followed by the companies for eliminating any strict action against the company (Azam, 2014). Managers must ensure that company is complying with the changing rules and regulations. For example, changes have been made in the Companies Act of Singapore which has been implemented from 31st March 2017. The motive behind the implementation of this change in the companies act is to encourage transparency in the ownership rights and control of the business entities. Non-compliance with the rules and regulations can affect the operations of the business (Quah, 2017).

Technology is changing at a very fast speed and it is crucial for a business to cope with this changing technology. Managers must ensure that technological advancements are implemented in the organization so as to enhance the individual as well as overall performance (Saunders, 2016). Innovations are being implemented by the companies for matching up with the expectations of the customers. Innovations enhance the chances of growth and success by providing opportunities to the business. The level of flexibility of customers has increased with the use of mobile and online information technology (Reinartz, et. al., 2011). Managers must provide training to the employees for coping with the changing technology which enhances their performance e and contributes towards the organizational growth. This can provide a competitive advantage to the companies over their competitors in the market.

Structural change is another important area of change which a manager needs to deal with. There are various challenges which are being faced by the retail sector which encourages companies to change the structure of the company. These challenges include an increase in the use of the internet for attracting customers and developing a customer base, change in the employee structure and management of increasing employee base. Managers need to adopt strategies for coping with these challenges related to the structure of the company. Structural changes prepare the business for the changes taking place in the business environment. These changes can affect the growth prospects of the business (Wagner & Orvis, 2013).

Summary

Thus, it can be concluded that every industry faces various challenges due to the changing aspects or trends of the business environment. A business environment is a dynamic place where changes take place at a very fast speed. The retail sector is implementing approaches and strategies for coping with the changing aspects and trends of the business environment. Various changing aspects and trends which act as a challenge include increasing use of the internet, changing technology, change in the competition level, change in the economic conditions, change in the legal and political aspects, structural changes in the organisation and change in the socio-culture factors. These changing aspects and trends have the potential to create positive as well as negative impact on the performance of the business. Managers need to analyse these changes so as to adopt strategies which eliminate the adverse impacts of these changes on the performance of the business. Managers must utilize these changes for enhancing the chances of growth and success of the business. 

Drawing on the key findings of section 1 you are required to apply ideas and theory from appropriate academic sources in order to evaluate how managers/leaders and organizations may respond effectively to key aspects of the organizational dynamics likely to be generated by the areas of change identified.

Organizations are operating in the dynamic business environment. Impact of this dynamic environment can disturb the functioning of the business. There is a need to manage the changes for enhancing the chances of growth and success and grabbing the opportunities available to the business. Different theories and ideas can be applied by the managers and organizations for dealing with the changes taking place in the business environment. These different theories and ideas that can be applied by managers and organizations for coping with the dynamic business environment are discussed below:

Nudge theory: nudge theory is an effective and innovative theory of change management which is widely used for coping with the changing business environment. The focus of this theory is on developing an understanding of the manner in which people make decisions and behave (Smith, 2013). Managers can use this theory for coping with the changes which are related to the behaviour and decision making of people. This theory helps the managers in taking better decisions so as to deal with the changing areas of the business management environment. Internal support is required for the implementation of plans for adopting the changes occurring in the business environment. Managers can communicate the proposed change and prepare the employees for implementing the change. Employees get motivated which directs their focus towards the implementation of change. An organization must prepare the internal stakeholders for adopting the changes. Managers can deal with the changes including technological innovations, change in the structure and increasing competition. Managers can gain the support of employees which ensures implementation of the change in a proper manner.

Force Field Analysis: this theory was developed by an analyst Kurt Lewin which is being used for the purpose of dealing with the resistance to change. According to this theory of Lewin, two opposing forces are there which are driving forces and restraining forces. Driving forces are those forces which provide their support to the need for change and restraining forces are those which resist change and are against the proposal of change. Various factors are being considered in this theory which may act as a driving force or as a restraining force. These different factors include the structure of the organization, behaviour and attitude of the people, resources which are required for implementing change and the events. (Smith, 2013). Analysis of driving factors and restraining factors will help managers and organization to adopt strategies for coping with the factors affecting the decisions of the business. With the help of this theory, driving forces and restraining forces related to the change can be analyzed and strategies can be used for gaining dealing with them. Changes can be implemented in a better manner as the driving forces and restraining forces are known (Wiere, 2013). Managers can use this theory for analysing the factors which act as a driving force and restraining force for the implementation of the change. Managers need to analyze the driving forces and restraining forces for analyzing the forces which can affect the implementation process of the proposed change. This analysis will help the managers in applying measures for dealing with the restraining forces and promoting the driving forces of change.

 


Kotter’s eight step model: This is an effective model which is used by managers and organizations for implementing the changes required for dealing with changing business environment. Focus in the first step of this model is placed on making employees understand the need to adopt change. There is a need to develop coordination and cooperation among the internal stakeholders of the business for developing a dedication to change. Next step is to set goals and creation of a vision for guiding the efforts in the right direction (Mulder, 2014). In the next step of this model, communication is done for developing an understanding of the need of change. Roles and responsibilities are assigned to employees so as to implement the change required for meeting the need of changing business environment. In the next step, the focus is on the creation of short term goals. Persistence is required for the attainment of the objectives set. The last step is to implement the permanent changes for enhancing the chances of growth and survival of the business. Technological changes and change in the structure of the organization can be implemented in an effective manner with the help of this model (Wiere, 2013).This is an effective theory which can be applied for the managers for dealing with the changing aspects of the business environment. This theory can be used for formulating plans for adopting changes and plans can be prepared and executed for the implementation of change in a better manner. Business should formulate and implement the plans in a sequence for adopting changing aspects of the business environment. Managers can prepare plans for dealing with the economic downturn, gaining competitive advantage, implementing technological advancements and change in the structure of company. These plans will be discussed with the employees for executing it in a smooth way.

McKinsey’s 7-S Model: this strategy is suitable for encouraging the growth prospects of the company and analyzing the future prospects as well. There are 7 elements in this model which include strategy, style, staff, skills, structure, shared values and systems. This model helps in formulating plans for the purpose of adopting the changes (Jurevicius, 2013). This model can be applied for analysing the current situation or performance of the business, proposed future situation or performance and the gaps between the current situation and proposed future situation. This model can be used by the managers for dealing with the changing structure of the organization, political and legal pressure on the organization and adopting the technological advancements. This theory will help managers in analyzing the impacts of the proposed changes on the performance of the company. Managers can formulate a plan which will include strategy for dealing with the change, staffing manner, structure adopted, system followed and values to be followed for implementing the proposed change.

Constant innovation: another idea or approach which can be adopted by business is constant innovations. Innovation is one of the most important aspects of the business environment. It is vital for a business to implement changes for utilizing the opportunities available to it. Innovations need to be implemented for improving the prformance of the business and coping with dynamic environemnt. Constant innovations can be done in the technology used which will help in dealing with increasing competition (Wiere, 2013). Using this approach will help business in making changes for meeting the requirements of the changing aspects of the business. Business can comply with the new legal rules and regulations formulated and adopt techniques for coping with economic downturn for reducing the cost. Managers can make changes as per the need of the business environment. Managers can change the manner in which operations are performed for meeting with the legal framework set.

Thus, it can be concluded that Kotter’s eight step model and McKinsey’s 7-S Model are effective theories which can be used by the managers for change management. These models help the managers in preparing plans for making changes in the manner in which business is operating for dealing with the changes.

Thus, it can be concluded from the above discussion that changes occurring in the business environment affect the functioning of the business. Managers must apply theories and ideas for dealing with the changes and meeting the requirements of the dynamic business environment. Different theories and ideas are available which can be applied by the managers are Nudge theory, Force field analysis, Kotter's eight step model, McKinsey’s 7-S Model and constant innovation. The discussion has been made of these theories along with the manner in which these can be used by the managers for the implementation of change for improving the performance of the business. All these theories can be used by the managers as per the need of the business. Managers need to analyse these theories and ideas for the analysis of the suitability of these theories and ideas for the requirement of the business.

As a conclusion, the final section requires you to draw on the evaluation and discussion within the briefing document to establish the key elements of learning in terms of approaches, skills and qualities etc. for leading/managing sustainable responses to change.

An organisation faces various challenges due to the changing business environment. Every industry faces challenges which can affect the quality of operations of the business. These challenges include a change in the technology used by the business, change in the economic conditions, and change in the availability of resources required for the execution of operations of the business, impact of political and legal pressure, changing socio-culture factors and increasing competition level (Holman, 2016).

Different approaches can be used by the managers for dealing with the changes of this dynamic environment in which business exists. Changes take place in the business environment and effective approaches must be applied for dealing with these changing aspects of the business environment. Changes must be accepted as these changes will contribute towards enhancing the quality of the operations of the business (Holman, 2016). Technological innovations must be implemented which enhances the performance of the business. Structural changes must be made in the business so as to adopt the changes taking place in the business environment (Wiere, 2013). Different theories and ideas can be applied which will help retail sector is coping with the changes and focusing on the performance of the business. These theories help in implementing strategies and approaches in a better manner.

Different skills and qualities are required for managing the sustainable response to the changes in the business environment. These skills and qualities are as follows:

Effective communication: communication process adopted by the business must be effective so as to allocate and explain the roles and responsibilities in a better manner. Communication process must be established in an effective manner it affects the quality of information which is beneficial for the business (Purt, 2012).

Knowledge: knowledge of the business environment and the impact of the changes on the business must be developed by the managers and organisation. Managers must possess the knowledge of the changing aspects which will help in the process of decision making (Clay, 2010).

Leadership skills: leadership skills will help in guiding the efforts of the resources available with the organisation in the right direction. Utilization of the available resources needs to be done in an effective manner. Leadership skills must be present in the manager so as to ensure that the human resources are effectively utilized for the implementation of changes (Mohin, 2012).

Effective monitoring: It is the responsibility of the business to monitor the performance of the business. Monitoring will help in ensuring the dealing with challenges. This will ensure that the efforts of the business are made in right direction. Monitoring needs to be done on different aspects so as to promote better adaptability to the changes affecting the functioning of business (Clay, 2010).

Dealing with resistance to change: resistance may be faced by the employees as employees may not feel comfortable with the changes. Training needs to be provided to the employees so as to train them for adopting the changes and gaining their support for implementing the changes (Purt, 2012).

This section has focused on discussing the variety of challenges faced by the business due to the change in the aspects of business environment. These challenges create a huge impact on the performance of the business. Managers have to adopt measures for coping with the changing aspects for the survival and growth of the business. There is a need to apply theories and ideas for ensuring that these challenges are not affecting the performance of the business. Managers need to possess certain qualities and skills for coping with the challenges in a better manner. These skills and qualities include effective communication, leadership skills, motivational skills for coping with resistance, knowledge and effective monitoring. All these skills enhance the capabilities of the manager and help in dealing with the changes in a better manner.

 

Conclusion

The businessenvironment is dynamic and organizations need to adopt strategies for ensuring the execution of the business operations in a better manner. This assignment has discussed the various trends or drivers for change which can affect the manner in which companies are operating. Managers or leaders need to consider these trends or drivers for change so as to cope with them. This assignment is focused on the changing aspects of the environment which need to be analyzed and monitored. Various strategies have been discussed which can help managers in overcoming the challenges

Critical review

For the survival of the business in this dynamic business environment, it is vital to implement changes as per the changing aspects of the changing business environment. According to Teh (2016), these changing aspects of the business environment are change in the technology used, increasing role of the internet in business, change in the structure, the economic condition of the country, socio-culture factors and increasing competition. Various theories can be applied by the managers for dealing with these challenges. Nudge theory is used by the managers for the analysis of the behaviour of the people and the manner in which people make decisions. This theory can be used by managers for the analysis of the response of the employees towards the change and the decisions taken by them for implementing change (Smith, 2013). Force field analysis is used by the managers so as to analyse the different forces which can affect the implementation process of the change. These different forces can be driving forces which help in the better implementation of the change and restraining forces which resist the implementation of change (Wiere, 2013). Kotter’s eight step model is an eight step model, which can be used the managers for formulating plans for the implementation of the changes in an effective manner. Managers of the retail sector need to analyse the changes and formulate plans for ensuring the implementing change without any adverse impact on the process (Mulder, 2014). McKinsey’s 7-S Model is an effective model which helps in the analysis of the chances of growth of the business and making assumptions for the future performance of the business (Jurevicius, 2013). Another idea is the use of constant innovations for enhancing the performance and effectiveness of the operations of the business. Innovations ensure improved performance which reduces the burden of the managers.  Managers need to develop skills and qualities for the management of the operations of the business in a better manner. These qualities include developing communication skills, leadership skills, improving knowledge and monitoring the performance (Purt, 2012).

 

References

Azam, S., 2014, “Perceived Environmental factors and the Intention to adopt a standard business reporting facility: a survey of Australian Corporate CFOs”, Asian Academy Of Management Journal Of Accounting And Finance, Vol. 10, No. 2, 147–173.

Clay, B., 2010, “Six Characteristics of Highly Effective Change Leaders”, Innovation excellence.

Douglas, H., 2016, “Managing People in Organization”, Accounting.

Dudovskiy, J., 2016, “Walmart Business Strategy and Competitive Advantage”, Research methodology.

Durvasula, S. & Lysonski, S., 2010, “Diagnosing Service Quality in Retailing: The Caseof Singapore”, J. International Business and Entrepreneurship Development, Vol. 5, No. 1.

Garside, J., 2012, “Apple's factories in China are breaking employment laws, audit finds”, The guardian.

Gunnion, L., 2017, “Singapore: Plans for a future economy face challenges”, Deloitte University Press.

Hall, J. & Fletcher, R., 2009, “Tesco profits hit by economic downturn”, The Telegraph.

Holman, S., 2016, “Adapting to Change in a Rapidly Changing Business Environment”, Linkedin.

Jurevicius, O., 2013, “McKinsey 7s Model”, Strategic management insight.

 Kotter International, 2017, “8-Step process”, Kotter International.

Lee, B. L., 2013, “Productivity Performance of Singapore’s RetailSector: A Two-Stage Non-Parametric Approach”, Economic Analysis & Policy, Vol. 43 No. 1.

Levy, A., 2016, “Nobody talks about Amazon's true competitive advantage”, Business insider.

Mohin, T., 2012, “9 skills for success in corporate sustainability leadership”, Green Biz.

Mulder, P., 2014, “Kotter’s 8 Step Change Model”, Tools Hero.

Nsimbi, C. P., Makgosa, R., Themba, G. &Iyanda, O., 2015, “Modern Retailing and its Implications for Developing Countries: Insights from Retail Managers”, Journal Title Business Management and Strategy, Vol. 6, No. 1.

Purt, J., 2012, “What qualities do future leaders need to meet the challenges of the 21st century?”, The guardian.

Quah, M., 2017, “Changes to Companies Act take effect March 31”, Business Times.

Reinartz, W., Dellaert, B., Krafft, M., Kumar, V. &Varadarajan, R., 2011, “Retailing Innovations in a Globalizing Retail Market Environment”, Journal of Retailing, S53–S66.

Saunders, L., 2016, “Digital Transformation in the Retail Sector: challenges & opportunities”, Econsultancy.

Smith, C., 2013, “Important Theories of Change Management”, Change.

Taylor, K., 2015, “Kroger is building the grocery store of the future”, Business insider.

Teh, A., 2016, “5 retail trends to expect from Singapore”, Tech in Asia.

Tudor, L., 2014, “Change Management – Challenge and operations for Sustainable Development of Romanian Companies”, Proceedings of the 8th International Management Conference.

Wagner, M. & Orvis, W., 2013, “Changing Structures and Behaviors at Walgreens”, Strategy business.

Wiere, M., 2013, “5 Strategies Organizations can Leverage to Survive and Thrive in Today’s Dynamic Business Environment”, Marie Wiere.

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