Tag (SQ): Competitive strategy

The TopTen Supermarkets Group is the largest supermarket group in the country. In spite of a decline in total consumer spending in the national economy last year, spending in the supermarket sector as a whole increased, and TopTen also increased its market share. It now has over 20% of the market for food-and-drink shopping in the country. It is also enjoying strong growth in the sale of non-food products such as clothing (it has its own brand of fashion clothes) and domestic electrical goods.

The group has just announced record annual profits, and investors expect the growth in profitability to continue, in spite of signs of weakness in the national economy.

Rival supermarket groups have been attempting to regain lost market share. Two rival groups merged a year ago. Another competitor was acquired a few years ago by a major US supermarket group and is pursuing an aggressive competitive strategy.

TopTen’s success is due partly to its reputation for low prices and reasonable-quality products, and its efficient in-store service.

The group continues to acquire land and to purchase retail property with the intention of building more out-of-town stores and smaller in-town convenience stores. It does not have any business operations outside the country. There is some concern about the possibility of government action to prevent the group from exploiting its ‘near-monopoly’ position in the market.

Required

(a) What is the purpose of SWOT analysis?

(b) Using the information provided, carry out a SWOT analysis for the TopTen Supermarket Group.