Kroger Clay Teegarden, Jacob stermer, Matt stadler, Kevin Mendoza

Introduction

  • Kroger is the second largest retail grocery chain in the U.S.
  • It operates brands in 35 states and 2,781 stores.
  • Fiscal 2015 sales of $109 billion
  • BLUF: Kroger is already a very strong company, but with increased quality control from its vendors, it will increase customer satisfaction greatly.

SWOT

  • Internal Strengths-Large retail network, Strong market position (Wide range of products, attractive locations, competitive prices)
  • Internal Weaknesses-Geographically Kroger is not very diverse, Lack quality control
  • External Opportunities-increase in demand for healthy and organic foods
  • External threats-Increase in competition, rising labor wages

Proposed Change

  • Our proposed change is to Kroger's vendor quality control
  • vender quality control is the retailers ability to control the quality of products provided by vendors to the consumers
  • Reason: Kroger obtains merchandise from suppliers in which they have limited control over.
  • led to many product recalls and consumer alerts
  • recalls served harm to the company's brand and image by reducing customer confidence and loyalty.
  • without customer satisfaction Kroger will lose consumers to other competitors.
  • recommend Kroger to increase quality control because it is important to keep consumers happy, especially in a grocery market where there are many competitors.

Kotter's Model

  1. Create a sense of Urgency- Tell employees, especially upper level management what it is we are trying to do, and inform vendors of what our goals for quality control are.
  2. Build a Guiding Coalition- should be made of two main parties, officials from Krogr itself, and officials from the vendors who we are trying to work with.
  3. Form a strategic Vision and initiatives- Vision: To eliminate any issues arising from poor quality control, anything sub par is unacceptable. Initiatives: Vendors who perform consistently high on quality control would be rewarded with in store displays and premium/more shelf space. 29% of shoppers buy a category impulsively, and 24% of these were influenced by displays.(Neff, 2008) "Eye Level is buy level" (Kendall, 2014)
  4. Enlist a volunteer army- Start with stores whose managers really get behind this idea early on, paired with vendors who are willing to try the program.
  5. Enable action by removing barriers- Once certain stores/managers are committed as well as their vendors, use as little corporate injection and oversight as possible.
  6. Generate Short term wins- reward managers/vendors who are using the program effectively.
  7. Sustain Acceleration- Encourage more stores and vendors to use the program to their advantage. Once the program has really picked up speed, use an ad campaign to drive sales even more.
  8. Institute Change- Make the program a part of training and educating new employees of Kroger.

Conclusion

  • Kroger is already an overall strong company, but with some more control of vendor quality control, it will help it to compete more in the market against its biggest competitor, Wal-mart.
  • While it will be difficult for some to implement, the system of change that we have suggested should help to increase customer satisfaction even more, with a company that is already known for customer service.

References

  • Forbes.com
  • Kroger.com
  • Neff, Jack. (2008, Novemeber 24) retrieved from: http://adage.com/article/news/store-displays-effective-price-cuts/132767/
  • Kendall, Graham. (2014, March 5) Retrieved From: http://phys.org/news/2014-03-science-supermarkets-good.html

Credits:

Created with images by Darren Hester - "002/365 Peppers" • Nicholas Eckhart - "Kroger in Westerville" • Nicholas Eckhart - "Kroger Sandusky" • Nicholas Eckhart - "Kroger Fremont (east side)" • Nicholas Eckhart - "Kroger Sandusky" • USDAgov - "20141109-OC-LSC-0013" • USDAgov - "110303_CNPP_LSC_0132" • evitaochel - "organic organic food food"

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