Kroger is an American retail company with over 3000 retail stores spread across the United States. Let us know more detail about ‘Kroger SWOT Analysis’.
Kroger SWOT Analysis
SWOT analysis is a management technique that evaluates the company or business at hand. SWOT analysis can be performed at any point in time whether earlier on during the creation of the business to see the success and failures of the business and what parts need to be corrected in other for the business to function successfully or further along. The term SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
Kroger’s SWOT analysis will put forward the strengths, weaknesses, opportunities, and threats of the company. It will allow the company owners to know what is working in the system and what is not. Therefore providing a space for the adoption and implementation of new strategies for the future. Let’s read about Kroger SWOT Analysis.
STRENGTHS OF KROGER
1. BRANDING
As one of the largest retail stores in the United States, Kroger has done an excellent job in branding the store as a whole. Branding as we learn is very important because it lets the customers in your world and Kroger has managed to create a safe space for customers while shopping in it, by procuring imagery of honesty and integrity while shopping.
2. DIGITIZATION
This point cannot be overemphasized especially due to the 2020 pandemic that kept us all indoors. Kroger has managed to adapt to modern times by having a seamless digital presence through e-commerce. This places Kroger ahead of the opposition that fails to do so because it creates convenience for its customers by offering doorstep delivery services of fresh grocery products.
3. EFFECTIVE MARKETING CAMPAIGN
The main reason for campaigns is to make people believe you or in other words buy what you are selling, in today’s world we care about environmental sustainability as well as what we put into our mouths. Kroger has done an excellent job in luring its customers into the organic market sector, as it convinced its customers to eat healthier making its organic products one of its most successful and fast selling.
4. SKILLED WORKFORCE
Like everything you have to invest in, Kroger adopts the model that their employees are the company’s identity which means the behavior or skill of the employees reflects on the company in general. Due to this reason the company invests its resources in its employees through different learning, training programs, and workshops.
5. PROVISION OF VARIETY
The truth is customers like having options. Kroger has gained success in this aspect because it offers a large spectrum of stores which includes supermarkets, jewelry stores, and multiple department stores. It also offers a range of products that improves customer loyalty and preference. Kroger’s ability gives it a pricing advantage in the supply chain among manufacturers and suppliers.
6. PRIVATE LABEL PRODUCTS
In the highly competitive business of the grocery store market, Kroger has been able to maintain its position at the top due to the inclusion and promotion of its own private labeled products and brand. Helping it build a loyal customer base for certain products such as organic products. Privatization of its brand has helped in the reduction of cost, as they do not have to spend money on suppliers, giving them bargaining power.
WEAKNESSES
1. PROBLEM OF DEBT
When compared with its competitors and other companies Kroger has a higher debt-to-equity ratio, despite the huge market earnings it has managed to acquire and get indebted. The large amount leads to the company not being able to expand in other to prevent financial turmoil as well as the company being unable to secure financial funding. Kroger still has room for improvement with better and more efficient financial planning and execution the company can raise from its indebtedness.
2. HIGH ATTRITION RATES IN THE WORKFORCE
Kroger is spending a lot of money on the training and development of its workforce which its other competitors are not doing, this however is weighing on its finances.
3. LOW GEOGRAPHICAL PRESENCE
The dream of every franchise business is to be able to expand and branch out to other locations. However, Kroger has a vast number of retail stores spread across the US. Kroger with over 3000 retail stores but still has a low geographical presence when it comes to expansion beyond the US to other countries, this gives the impression that the company is being very reliant on the US market, and if for any reason there is a decline in the US market. Kroger will be negatively impacted.
OPPORTUNITIES
1. PRIVATE LABEL BRANDS
Kroger possesses the potential to develop and build on its private label products, as it can be noticed that customers have reacted positively to these products creating a customer base. Its ability to do this can lead to the distribution of these private label products beyond Kroger stores and the adoption of new strategies will create a market space in which its product can thrive.
2. E-COMMERCE TRAIN
The use of the internet has evolved the way people do things, online shopping, especially in the past decade, has become a major trend, this is because most people prefer the convenience and do not want to go through the hassle of grocery shopping which includes looking for car space, standing in line amongst the numerous complications attached to it. Kroger like many other businesses has jumped on the e-commerce train that makes shopping easier for its customers “through Click List” which prepares orders for pick up and also delivers grocery items.
Kroger is further trying to make the customer experience seamlessly easy by creating an app that allows customers look up an item while shopping and have the app locate where that item is in the store.
3. STORE SHOPPING EXPERIENCE
Kroger does their best to improve customers’ experience in its stores by analyzing data to study customer demand and market in real-time. Also evolving in-store experience with the use of technology.
4. INFLUENCING CONSUMER TRENDS
Kroger’s commitment to organic foods gives it a head start over its competitors because in the world today customers are mindful of what they consume. A shopper will be less loyal and have ties to a company that does not provide fresh food. This is where Kroger comes in, as it is well known and branded for its fresh, organic products placing them ahead of the curve with its ability to provide such products.
THREATS TO KROGER
1. COMPETITION
The number of players in the industry has spiked due to income stability. This increase in competition harms sales. Intense competition tends to lead to loss of shares in the market as well as a reduction in sales.
Competitors are looking for a way to outdo one another in other to increase their revenue and a major way in which they can achieve that is through the creation or adoption of new technologies. Digital retailers are also the new realm of competitors, who operate solely online, an example is the billion dollars company Amazon.
CONCLUSION
Now we have learnt ‘Kroger SWOT Analysis’, Kroger’s SWOT analysis points out where the room for growth lies and is a reference tool for the strategic planning of the company and opening up areas for improvement.
