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The Company's Background

Question :

Describe the strategic and ethical choices specific to Smart Mart, Engage issues under conditions of strategy implementation and evaluation, Apply relevant tools and techniques of strategic analysis for Smart Mart, Apply principles of decision-making under conditions of uncertainty, Justify or substantiate strategic choices, decisions, or intent, and Recommend a course of action for Smart Mart.

The company started its journey from 1978 by Liam Van de laye. The main business of the company was very much concentrated into one very specific area that is providing healthy organic food products to the community. They remain very much focused into this segment. It has been observed that the over the years the market dynamics have changed. Therefore, the business policies of the companies have changed.

In modern business segment, most of the retail consumers are focusing in the adoption of the organic foods. Therefore, in this condition the Smart mart have the most lucrative option to promote its business in large scale. The main reason behind this is the organic food is their key functional area.

However, all the other competitors will also change their focus in the organic food segment. This shift in policy will not take much time for the competitors to promote their organic businesses. Therefore, the adoption of the Organics 2.0 strategy will work very smoothly for the company. Through this strategy, the company will remain able to get the insight data of the market. This market insight will help the company to gain the competitive advantage over its nearest competitors. It has been seen that most of the other companies collects the product through using the other’s supply chain. Therefore, it will be very much viable for the company if they use their own supply chain to ensure that the quality of the product does not degrade (Rasouli and Timmermans, 2014).

Company is operating with the organic foods with a long year of experience. Therefore, the major ethical issue will be, with the increasing competition within the sector the company should not shift their focus to deliver the non-organic foods or lower graded organic foods to the consumers.

The major considerable issues that should be kept under the prime consideration will be

  • Market Expansion
  • Production process control
  • Return on Investment

Market expansion will be one of the most futuristic decisions made by the company. According to Gaughan (2011) it is very much required to have a considerable visibility to gain the maximum advantage from the market. Therefore, as the trend of organic food is growing very fast the company with its strong brand name should expand its reach within the market. However, to grow their market the company should go with the acquisition strategy. The main advantage of this strategy is that it will help the company to gain the visibility with a single deal. If the company wanted to have their own establishment to increase the visibility, it would take time and would take growing investment. This could have a adverse effect on them.

The production of the organic food process should be kept under strict quality control because their brand name has developed on it. Therefore, to maintain the image of the company the company should implement a strict monitoring on the supply chain of the company. On the production issue, the company should implement the use of bio fuel so that the pollution level decreases.

The Organics 2.0 Strategy

However, to get the better return on investment the company should increase the product offering ranges and needs to redesigning of the pricing of it so that it become very much accessible to the common consumers. It has been observed in the retail market that the mass markets have received much better values for their investments rather than the niche marketers. Therefore, to get better return on investment the company should increase its product offering and need to review its pricing policies to attract the most of the customers under their belt.

It is very much necessary to have an analysis of the internal and the external environment to get a glimpse of the strategic market dynamics. Therefore, the SWOT analysis will provide the internal image of the company and the Porter’s five forces analysis will help to understand the external competitive environment of the company.

SWOT analysis:

The major Strength of the company is the long-lived brand image in the organic food sector. Other than this, the other strength of the company is the self-owned supply chain, which ensures the optimum quality of the offering. However, to gain the competitive advantage the company should expand its business through acquisition and should increase its product offerings (Gaughan, 2011).

The major Weakness of the company is the lower brand visibility of the company and the lower product offering with a high-end pricing. This lower brand visibility over the year affected the growth of the business for the company. On the other hand, the limited product range and higher pricing is restricting the growth of the company in the mass market.

However, the major Opportunity for the company is that with its higher brand value the company will remain able to expand in the consumer market. However, to become a mass marketer the company must have redesign its product offering range and pricing policies (Rasouli and Timmermans, 2014).

The major Threat for the company will be the growing number of competitors and maintaining the quality of the products through owning the self-owned supply chain. Therefore, to overcome these threats the company should increase its market reach very rapidly with its rapid expansion policy (Stevens, 2010).

Porter’s Five Forces Analysis

The porter’s five forces model for the company will be discussed through the following table:

Forces

Outcomes

Strategic Choices

Bargaining power of the suppliers

The supplier bargaining power will increase as the number of competitors will increase.

Therefore, to minimise the impact from this the company should focus in developing own SCM of the products.

Bargaining power of the Buyers

The bargaining power of the buyers will be higher as the most of the retailers are moving towards the organic.

The company should expand its product offerings and should make the pricing competitive one so that the product comes within the reach of the mass markets.

Thereat of substitute products

The thereat of the substitute products is low because only a few products are available in the organic category.

The extension of the food products range will help the company to deal with this issue.

Threat of new entrance

The threat of the new entrance is very high because there is no market entrance barrier for the other companies.

Expansion and the product range expansion will help the company to handle the issue.

Industry Rivalry

The industry rivalry is very high due to the increasing number of retailers coming up with new business ideas.

Constant review of the external business scenarios will help to resolve the issue (Kamin, 2010).

Table 1: The Porter’s five forces analysis of the company

According to Burls and Sandercock (2011), the decision-making under condition of uncertainty can be termed as structured or methodical, disciplined approach in context to decision making. Therefore, in that case probabilistic analysis can be the core for compiling logical reasoning. Therefore, Smart Mart can implement the decision-making concept under uncertainty in order to make effective strategic decision. On the other hand, risk and opportunity can be proactively managed so that expected goal can be achieved. The management of Smart Mark can employ Expected Utility Theory. As per Rasouli and Timmermans (2014), the theory explains that a decision maker can make a selection between prospects of uncertain and risky by weighing against the values of expected utilities.

Considerable Issues for the Smart Mart

Therefore, in order to select the concept for store, the Smart Mart can apply decision-making process to gain best value from uncertainty. On the other hand, the store managers of the company not in favour to change the concept of store, as the managers believe that that store concept is doing fine. Apart from that, people from other department have a view that if the concept is not modified then it can be tough for Smart Mart to battle their competitors such as Big-Box Mart. Therefore, CEO of the company can take decision by comparing the expected utility values of the store concepts. If the store concept is scaled up to a level of supermarket concept then it can provide more utility value in comparison to other concepts thought that is to be niche player or carrying the operation with existing setup (Malyshev et al. 2010). Moreover, scaling up the store to next level can help the Smart Mart to tackle its major competitors and provide good services to people. On the other hand, it is not clear whether the market will accept the change or not therefore, the decision falls under uncertainty.

In order to gain the leadership position in the area of organic food market, Smart Mart has to develop strategic that can meet all the requirements of market and consumers. Therefore, as per the case, the under mentioned points can be strategic choices, decisions and justification

Enhance Customer Service: Smart Mart has to provide superior and quality customer service to their consumers in their stores. The employee in the store has to be full time ready to deliver quick assistance to customers and solving their queries. For instance, in order to improve customer service, the company can include more number of billing counters so that customer does not have to stand in queue for long time (Stevens, 2010). Therefore, it can deliver good customer experience. Thus, the company has to provide full satisfaction to the customers in order to sustain in the market and gain market share.

Mergers and Acquisitions: This strategic choice can be effective for Smart Mart to perform efficiently in the market. According to this strategic, the company can fall into negotiation with other industry or can acquire small industry to gain market benefit (Gaughan, 2011). This strategy can help the company in decreasing the percentage of competition and it can make company to remain more focused on the firm that is being purchased. Further, it can be helpful for Smart Mart to increase their footprints across the nation and company can increase their customer base.

Technology: The Company can employ advance technology such as internet or online shopping. This would help in building customer circle and providing quick service to customers. On the other hand, the company can be able to increase its visibility in the market with their range of organic food. Moreover, it could help in building relationship with customers and it can help the company in gaining loyal customers (Kamin, 2010).

In the case of intent, it is clear that company is focused on repositioning the company in the organic food market. The company wants to increase their market share and provide quality and healthy food to people that free from chemicals or preservatives. Therefore, it can help Smart Mart to gain competitive advantage against their competitors and earn better profit and sales.

In order to improve the operation, the Smart Mart can follow the mentioned suggestions.

  • The company may need to decrease the level of debts or liabilities so that company can generate better cash inflow which can be invested in profitable venture. Moreover, the operational expenses have to be checked. Therefore, company has to be decreased the cost of production and cost from unnecessary research and development.
  • Smart Mart has to focus on the marketing and promotion in order to engage pool of customers. The company can release TV commercial to make people aware about their stores. On the other hand, the company can give discount to the customers for one month that will help in building image of the company in the organic food market. Therefore, company may need to invest the portion of their income in the promotion as it will help in increasing the sale of the company.
  • The decision regarding the store concept has to be taken soon in order to scale up the business process. As it will help in increasing the profitability of the company and on the other hand, company can gain competitive edge to give tough challenge to their competitors. Therefore, it will help in performing superiorly in the organic food market.
  • The management of the company has to hire more efficient and productive employees that can increase the performance level of the company with minimum wastage. Moreover, the company can generate more creative ideas that can be helpful for the future prospect of the Smart Mart. Therefore, company can register growth in the business and operations.
  • The company can use social media such as Facebook, Twitter, Google +, etc. to communicate with the customers and let them know about the special offer given in the stores. This will help in increasing the brand value of the company and company can be able to sustain for long in the market.

Reference List

Burls, A. and Sandercock, J. (2011). Decision-making under conditions of uncertainty-what can we learn from palivizumab?. Acta Paediatrica, 100(10), pp.1302-1305.

Gaughan, P. (2011). Mergers, acquisitions, and corporate restructurings. Hoboken, N.J.: Wiley.

Kamin, M. (2010). 10 steps to successful customer service. Alexandria, Va.: ASTD Press.

Malyshev, V., Piyavsky, B. and Piyavsky, S. (2010). A decision making method under conditions of diversity of means of reducing uncertainty. Journal of Computer and Systems Sciences International, 49(1), pp.44-58.

Rasouli, S. and Timmermans, H. (2014). Applications of theories and models of choice and decision-making under conditions of uncertainty in travel behavior research. Travel Behaviour and Society, 1(3), pp.79-90.

Stevens, D. (2010). Brilliant customer service. Harlow, England: Prentice Hall.

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