26 1997 15 n kpmguniversity of illinois business

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Unformatted text preview: A&P has converted a number of stores to the “Basics” banner, a discount format that has cut into the sales and margins of all competitors. The conversion of the Oshawa Group’s Food City stores to the IGA banner has further increased competition in the more traditional supermarket segment. 20 Financial Post, Aug. 26, 1997. 15 n KPMG/University of Illinois Business Measurement Case Development and Research Program July 1999o Conclusion The grocery industry is healthy, with high demand and as George Condon, editor-in-chief of The Canadian Grocer, notes, “People will always have to eat.” But the maturity of the industry, characterized by flat demand combined with the growth aspirations of the dominant suppliers makes the industry a competitive battleground. Competitors work toward driving costs down while responding to swiftly changing consumer tastes. Grocery managers, therefore, are challenged to provide the marketing mix of tomorrow, emphasizing speed, flexibility, and early identification of trends directed at segmented and rapidly evolving markets. The mass consumer market has been replaced by hundreds of highly diversified mini-markets for which grocery companies have to design custom-made solutions. Condon believes that, “there will be many victims over the next two or three years as the industry rationalizes,” a sentiment echoed by CIBC industry analyst David Brodie, who believes that there is “too much square footage chasing not enough stomachs.” Figure 2 presents the KPMG Industry Segment Business Model for a retail client, including a client operating in the grocery industry. This model is used by Mary Lou and her team as a starting point to prepare a customized entity-level business model for Loblaw. Figure 2 K P M G E n t i t y - L e v e l B u s i n e s s M o d e l fo r a R e t a il Clie n t External Forces & Agents E xternal Lifestyle Trends Regulators New Entrants/Formats Stakeholders Suppliers Competitors Economy Stores: Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Department Specialty Drug Grocery Restaurant Discount Category Killers Home Improvements General Merchandise Convenience Outlet Repair Stores Warehouse Club Personal Services Free Standing Strip Centre Mall Non-stores: Ÿ Catalogue Ÿ Electronic Home Shopping Ÿ Interactive Shopping Ÿ Direct Mail Ÿ Direct Sales Ÿ Telemarketing Markets/Formats Strategic Management Process Core Business Processes Brand and Image Delivery Product/Service Delivery Customer Sales Customer Service Delivery Resource Management Processes Property Management Human Resource Management Regulatory Management Financial / Treasury Management Business Processes International Politics Customers Technology Capital Markets Joint Venture Ÿ Real Estate Ÿ Other Retailers Vendor Partnering Ÿ P rivate Brand/ Label Ÿ W holesalers Distributors Consumer Credit Alliances Ancillary Complimentary Services Soft Hard (Durable/ Non Durable) Food Services Ÿ Credit Extension Ÿ Installation/ Ÿ Delivery Ÿ Repair Ÿ Service Contracts Ÿ Other/Personnel Individuals Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ A ge S ex E thnic I ncome G eographic P references E ducation Resellers Not for profit institutions Government Commercial entities Cable and other Communication Companies Trade Association...
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This note was uploaded on 01/27/2014 for the course ACCY 405 taught by Professor Staff during the Fall '08 term at University of Illinois, Urbana Champaign.

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