Business Strategy

Business Strategy

Competitive Strategy

ShopRite uses the low cost business strategy to help them maximize their profit. They go about this low cost strategy in many ways. They have a variety of  name brand products that they sell in store for a more reasonable price, but they also sell their own ShopRite brand products that are similar to many popular brand products.  ShopRite also reduces their spending costs by searching for the best possible products at the lowest prices. They have recently implemented a self-check-out lane for customers who do not want to wait and those longs lines. This also reduces the cost for them because then they do not have to hire more employees to work the register. These are just some of the ways ShopRite sticks to their low cost strategy and how they go about making the most profit with their business.


Porter's Five Forces

The threat of new entrants is high because it is easy for new grocers to enter the market. An example is how easily Amazon bought Whole foods and entered the market. To beat out new grocers, Shoprite has a reward program that allows customers to have special low prices for certain products and  also exclusive coupons to be used in store. The threat of substitutes is medium. There are a few alternatives, but ShopRite has introduced online shopping and a blog that includes recipes that customers can make by using products found in the store to maintain its competitive advantage. The bargaining power of customers is high. The customers can easily go elsewhere to purchase the same products that ShopRite offers with the exception of the generic ShopRite branded products. To keep customers happy, ShopRite has included an app that show the weekly specials and has digital coupons for them to use. In addition, ShopRite is very focused on customer service so they always make sure that they listen to the suggestions their customers provide. The bargaining power of suppliers is low. Shoprite has a lot suppliers so that they can get the best products for their stores. Their suppliers compete via bidding for their business to keep the power of suppliers low. Also by doing this, they are able to get the best price to keep their industry-wide low cost strategy. Rivalry is high. There are other stores that are similar to Shoprite and others that are more popular like Whole Foods, and Trader Joes. So Shoprite is always coming up with new ways to maintain its customers and stay ahead of the competition.

Value Chain

Inbound Logistics: Large supply chain with a vast network of distribution centers, as well as a fleet of trucks used to help deliver their promise of low costs as well as product availability.

Operations: Consists of strategically placed distribution centers linking the flow of product from vendors to stores with customer demand driving the movement of product. Merchandise is delivered to stores by a variety of trucks and trailers based at distribution centers throughout the country.

Outbound Logistics: Products are priced by a fixed margin and  are delivered from vendors and merchandisers which are put out on the shelves of the supermarket for customers to pick up and purchase. Products can also be ordered online and customers can pick up their already shopped orders in a convenient fashion.

Customer Service: Workers are and staff are available from 7am until closing which is 12 am to assist customers in any issues they have with products such as poor item conditions, returns, inventory check, and item recalls.