Question
It is required to use the information below ( The SWOT analysis) for a TOWS analysis for a retailer in the food retail industry. The
It is required to use the information below ( The SWOT analysis) for a TOWS analysis for a retailer in the food retail industry. The SWOT analysis for the Shoprite holding groups is as follows. Strengths: Shoprite Holdings are the largest consumer goods retailer in Africa and are seen as the Market leaders. Shoprite Holdings own a catalogue of well-known brands that operate in 13 individual industries. The main industries that they have diversified into are the furniture industry, pharmaceutical industry, hospitability industry, digital commerce and the financial services industry. In doing so they have decentralised their revenue streams and have diversified their portfolio creating interest and value for their current and potential shareholders. Shoprite Holdings have shown they are an innovation driven organisation by reinvesting large portions of their revenue into technological advancements like their grocery delivery application that was rolled out during the initial phases of the covid-19 pandemic. Being the innovators of this technology in South Africa they gained market share over competitors and built strong relations with new and existing customers. Shoprite Holdings created a rewards plan for their customers called the "Extra savings rewards program". The program is available at all Shoprtite and Checkers retail outlets and gives customers instant discounts at checkout in these stores. Since launching the initiative, they have over 20 million customers registered meaning they are likely to be loyal customers that will return giving them a competitive advantage over their competitors. Shoprite Holdings have expanded their scope of operations by investing in their own distribution centres and warehousing facilities across Africa. Shoprite Holdings now have the infrastructure required to source, package and deliver majority of their product offerings directly to their retail outlets which allows them to do it in a more efficient, cost effective and timely manner. In doing so they have also reduced the bargaining power of suppliers drastically and eliminate middle-men as they now have the means to store and distribute their goods using their own resources. Weaknesses: Shoprite Holdings have shifted their operations focus by broadening the services they offer and bringing many services they used to outsource in house. In doing so they have added many variables to their already large infrastructure. This may cause a lack of focus on the improvement of their core business offering which is the retail foods industry. Adding more product and service offerings is seen as a strength however broadening their scope too much opens Shoprite Holdings up to the risk of losing focus on their core business practice. Shoprite Holding have expanded their infrastructure that already spanned across 13 different industries in over 10 different countries in Africa. Managing and maintaining this highly complex infrastructure may prove to be challenging if Shoprtite Holdings do not have sufficient know-how and capable employees to take care of all the financial and logistical implications these expansion bring about. Shoprite Holding have the ability to counter and react to tactics deployed by other large food retailers as they all have similar product offerings and price points. However, there is a growth trend showing that smaller food retailers are able to penetrate large food retailers market share by offering niche products with a unique value proposition to customers that Shoprite Holding are slow to react to. Shoprite Holdings make use of traditional communication channels like Television commercials, newspapers, magazines and radio commercials to market their products. Shoprite Holdings direct and indirect competitors have been quick to respond to the popularity of new communication channels like social media platforms like Instagram, Face Book and Tik Tok. Using modern forms of media for marketing purposes has allowed their competitors to reach more prospect customers and build relationships with their current customers. There has been a major shift in the consumers purchase goods and services due to technological advancements and increased availability to the internet which is drastically changing the infrastructure food retail industry. Shoprite Holdings needs to invest more into alternative selling points as Brick-and-Mortar retail stores are decreasing in popularity. Opportunities: - Shoprite holding have acquired large amounts of customer personal information through their ecommerce applications and can use this information to examine their target customers, provide personalised offerings, understand the buying habits and spending patterns sin order to build long-term relationships with them. - Shoprite Holding have already developed the infrastructure to deliver groceries to their customers using the Checkers 60/60 app. They can immolate this infrastructure for their other business and get into the business of delivering pharmaceutical products, furniture and other product offerings. - Checkers have shifted their focus to supply good and service for the middle/high income earners in the South African economy. By providing goods of such high quality, they are now being perceived as an up-market grocery store and have gained market share over competitors in this segment of the market like Woolworths. They have done so by sub-letting space in their stores to popular franchises like Starbucks and Krispy Cream doughnuts. In doing so they are attracting more high-end consumers and can increase their price points. - Shoprite Holding group are the largest fast-moving consumer goods retailer in Africa and operate in 10 different countries in Africa. They have the financial resources to enter even more countries in Africa and in doing so could reach more customers and build a massive infrastructure that provides food services to many more African nations. - They already have a rewards system in place for their Checkers and Shoprite stores and could make these reward systems universal and available to use at any of their stores like Medirite Pharmacy's, Ok food group and House and Home franchises around the country. By centralising their rewards systems, it may work as an incentive for customers who shop at one of their stores to visit other stores for promotions and saving. Threats: South Africa's current economic state is vulnerable and in a state of recovery from the impacts of the Covid-19 pandemic. The current unemployment rate is still very high, there's a lack of economic stability due to corruption, increases in inflation rates as well as sanctions on raw materials that are usually imported from the Ukraine or Russia all have negative implications on the buying power of consumers in South Africa. A large portion of Shoprite Holdings product offerings are homogenous, meaning they are either the same of very similar to other products, and are available at many competing food retailers at the same price or a better price. Shoprite Holdings lack of unique products offering may cause customers to care less about who they buy the products from and negatively implicate customer loyalty. Due to increased availability of technology today's consumer has all the recourses required to access information on products and services and make informed decisions based on this information. This may cause consumers to rather purchase the same product or an alternative product from Shoprite Holdings competitors. Shoprite Holding are no longer able to depend on state owned entities like Eskom for consistent power supply. Eskom have begun implementing power cuts to the national grid which have impacted all business in a negative way but it's a major problem for retail stores as people still need to purchase basic food goods during these times. Shoprite Holdings need to look into investing in renewable and sustainable resources for power supply. Checkers, who are a sub-division of Shoprite Holdings, have branded themselves as a high-quality goods retailer that sell premium products that cater to the needs of the high-income earners in South Africa. Checkers may run into problems if they can't get A grade fruits and vegetables due to the droughts and fluctuations of harvests in South Africa. If the consumers experience a drop in the quality of their products, they will rather purchase from another high-end food retailer like Woolworths. Now that all the information of the SWOT analysis has been provided, you are required to link them into groups. SO = Strengths and opportunities-> 2 examples WT = Weaknesses and threats-> 2 examples WO = Weaknesses and opportunities-> 2 examples ST = Strengths and threats -> 2 examples Please answer in table format (provided below) with at least 2 examples per block.
EXTERNAL FACTORS TOWS Opportunities Threats / Matrix Strengths & Strengths / Strengths / Opportunities Threats INTERNAL FACTORS LUCIDITY Weaknesses Weaknesses / Weaknesses / Opportunities ThreatsStep by Step Solution
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