Kroger is the United States’ largest supermarket in terms of revenue ($121.16 billion as of 2019). It is also the second-largest general retailer after Walmart. Apart from these milestones let us understand what the SWOT analysis of the company says about it? Let us know about “Kroger Swot Analysis”.
The SWOT analysis of Kroger means an analysis of Strengths, Weaknesses, Opportunities, and Threats to the brand and its business. This is done so that the company could prepare itself for upcoming market ups and downs and grow its business. Strength and weakness are considered the internal factors of the company whereas opportunities and threats are factors that come from the outside which means these are external factors.
What Is SWOT Analysis?
SWOT analysis is done by every firm to understand its abilities, flaws and plan further projects. SWOT is the acronym for the words –
S – Strength
W – Weakness
O – Opportunity
T – Threats
Strength of the firm means the factors that are the best part of the firm and makes it different from others. It could be the variety of products in which a company deals, the working style or the resources, etc. Strength is the internal factor of the firm. A company has control over it.
Weakness means the factors that are not so good about the firm like the unskilled laborer, lack of leadership, etc. It is also an internal factor.
Opportunities are the outside factors that come to a company as a huge earning reward, whenever something happens in the outside market environment.
Threats are outside factors that could cause certain damage to a firm’s earnings or reputation due to some market changes.
S – Strength Of Kroger
Strengths are the factors which are best about the company and among the major reasons for its success. The company can also develop strengths that could increase its growth and turnover.
Wide Market Coverage
Kroger is the second-largest retailer in the USA after Walmart. It has 2868 stores all over the state. More stores mean greater reach to the people. This gave success to the company.
Leadership In Market
Kroger has a remarkable leading position in the market. Its influential decisions are the reason for the company’s success.
Does Consistent Innovations
Innovations are the key to success in the market. Every firm does innovations but Kroger has a record of successful innovations.
Revenue From Diverse Areas
Kroger is not limited to one industry. Over the years it has diversified its areas of revenue. Now you can see Kroger’s business other than grocery and services also.
Product Mixing Ideas Has Brought Success
Kroger got huge success with innovations in product mixing. The reason is by mixing products one product could reach a larger heterogeneous audience.
Goodwill
In the market, goodwill is the biggest strength of any company. Kroger has a respectful image in society. The company has won the trust of its customers.
W – Weakness Of Kroger
Weaknesses are some loose parts of a firm that could cause notable damage to the firm’s eating and growth if didn’t corrected on time. As these are the firm’s internal factors, it has control over it.
Low Level Of Loyalty Among Suppliers
The loyalty of Kroger is low among its suppliers. With the innovations prices of products are also coming down.
The Market Share Of Kroger Is Declining
With the increase in competition in the retail industry, shares of Kroger are declining. The company needs to bring new ideas to maintain its position in the market amid competition.
The Cost Of Replacing Older Employees Is High
Major decisions in Kroger are taken by senior experts and specialists. In such times you can’t replace them. Replacement in these times is very difficult for Kroger.
Per Unit Revenue Is Declining
The competition in the industry is growing. In such a situation, a price increase could shift customers towards other companies. As a result, per unit revenue is consistently decreasing.
Gross And Operating Margins Are Reducing
The consistent decrease in gross and operating margins may cause difficulties for the firm in the future.
Kroger needs to take senior actions to deal with these weaknesses. Innovations and ideas are needed to implement so that these weaknesses couldn’t harm the company’s position in the market. As these factors are in the hands of the company and they can control it, timely action will not only save the company from falling down but also help it in taking a big jump.
O – Opportunity For Kroger
The market changes in minutes. You need to continuously observe the market conditions to capture the greatest opportunity for the firm. Opportunities are the areas where companies can grab huge success by using their potential.
Technical Advancement And Innovations.
The 21st century is the century of innovation. New and advanced innovations make money for you. Kroger is already a company that loves innovations. New and unthinkable innovations could add up stars in the growth of the company.
Economy Expansion
The US economy is one of the fastest-growing economies of the world. This growth could bring expansion opportunities for Kroger. Using the tactics of growing in a competitive US market Kroger can earn many dollars.
Focusing On The Lower Segment
Customers keep moving from unorganized local sectors towards the big brands. By focusing on such people, Kroger can increase its customer base.
Collaborate With Local Players
Collaboration with local marketers is beneficial for both Kroger and local players. Locals can give the crucial business information of the local market and Kroger can add up its capital and goodwill to expand the business.
Customers Inclination Towards Higher-End Products
The interest of customers is increasing widely towards the big brand names. Kroger already has a good image and trust in people. It can positively use new trends of brands even among the low segment people.
Tracking Fast-Changing Customer Demands
The disposable incomes of people are increasing, technology is changing, customers want changes and variety. Understanding the fast-changing demands of people is the biggest opportunity for any of the retail firms in the market.
T – Threats To Kroger
Threats are the macroeconomic factors that can put dangers in the way of a company’s growth. These factors are external hence can’t be controlled. The company needs to manage it effectively to survive dangers and losses.
Changing Generation Of Customers
A new generation of customers is coming into the market. To attract the new generation companies are reducing the prices. It can earn a huge profit for them in the short run but in the long term, it could bring losses as the new generation is not brand loyal and loves experiments.
Legal Threats And Institutional Distrust
Some laws and regulations by the WTO have become difficult to enforce in various markets. Additionally, these are expensive and involve a long process. Hence, companies’ investment in the market and innovation is declining.
Commoditization
Commoditization means making commodities of products that couldn’t be differentiated based on their prices and characters. This is the biggest challenge for any retailer in the market.
Lack Of Skilled Human Resources
The demand of the future is innovation and technology. Companies can face a shortage of skilled human resources shortly for these jobs.
Less Demand In The Market
The demand for Kroger is declining in urban areas while in Europe it is stagnant. The reason is it is costly for Kroger to serve in the rural market than in urban. Secondly, the adoption process is slow in the rural market.
US-China Trade Relations
The US-China trade relations can pose a major challenge for Kroger. This could lead to a trade war and pressure of expansion in China.
Why Is SWOT Analysis Important?
SWOT analysis is important for strategic planning. The top players of the industry prefer conducting a SWOT analysis to plan out their market strategies and planning.
SWOT analysis is conducted –
For Strategic Planning
SWOT analysis is one of the very important steps of planning and strategies. Managers nowadays prefer SWOT analysis for both long-term and short-term planning.
To Improve Performance
The SWOT analysis gives an insight into the weaknesses and threats of the company. Timely actions could control and manage them. This way the company can improve its performance by taking over threats and weaknesses.
For Bringing New Changes
While bringing any new project, launching a new product, or working on a new idea, the SWOT analysis guides the company. It helps determine the best ways to bring the changes.
To Set Goals And Objectives
The best way to use SWOT is in determining further objectives and goals.
Conclusion
Now we have learnt “kroger Swot Analysis”, The SWOT analysis of Kroger says that its innovation and brand images are its biggest strength while declining market share and revenue is its biggest weakness. There are various opportunities for the firm in the name of technological advancements and collaboration opportunities while firms need to manage threats like market demand and commoditization.
FAQ
- How often does Kroger conduct its SWOT analysis?
Answer: The frequency of conducting SWOT analysis depends on the objectives and goals of the firm. It also depends on the changes that have come in the industry.
- Can US-China trade relations pose threats for Kroger retail?
Answer: The US-China trade relation would put expansion pressure on Kroger.
