S11_AP_Question - Session 11, A & P The Great Atlantic...

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Session 11, A & P The Great Atlantic & Pacific Tea Co. (A&P’s official name), headquartered in Montvale, New Jersey, has about 750 stores in 16 states, Washington D.C., and Ontario. They have about 24,400 full-time employees plus 56,600 part-timers. The grocery business operates on high volumes of transactions and tiny profit margins of 1 to 2 percent of sales. In addition to traditional competitors, A&P was losing market share to new types of stores, such as Wal-Mart, that had entered the grocery business as part of their attempt to meet most home needs. Christian Haub, A&P’s CEO, planned to revive A&P profits by calling for a new information system to refocus the company on serving customers better and managing inventory more efficiently. The company launched a $250 million project for a four-year redesign of its information systems. In describing the planned project, A&P estimated that, of the $250 million, 35 percent would be technology costs, whereas the remaining 65% would be for training, communications, and managing and measuring performance. Management expected that the new system would save about $325 million over
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