CASE ANALYSIS OF WEGMANS FOOD MARKET

Balmes, Jennylyn C.
De Guzman, Marlene A.
Endozo, Lyka M.
Esguerra, Michelle Carmel B.
Espiritu, Janelle Rajen S.
Fajiculay, Joanna Marie T.
Lopez, Evangeline
Porto, Maria Lyn
Sarmiento, Kris Jeine Laizl Kaez
Tobeo, Baby Jane

I. Point of View
The group used the point of view of Wegmans Food Market’s management.

II. Time Frame The case happened during the maturity of Wegmans Food Market.

III. SWOT (Strength, Weaknesses, Opportunities, and Threats) Analysis
Strengths
1. Wegmans Food Market is a well-known premier grocery chain as it offers high product quality and excellent service to customers. 2. It is positioned in good locations in United States where it does its business. 3. It offers variety of products and extended additional features wherein customers can choose from. 4. The company's produce department employs specialized way of transferring produce to reduce bruising 5. It maintains a strict control on its suppliers considering the quality and timeliness of deliveries. 6. It involves the coordination of departments in verification of inventory count. 7. It has good people who are well-trained, knowledgeable, and committed to the organization. 8. It continues to adopt technological processes and systems to maintain its competitiveness.
Weaknesses
1. Because of too much emphasis on satisfying customers, high cost of improving the products and service is somehow overlooked. 2. Some of the stores in Wegmans have improper capacity distribution. Take for example, the floral and card shop wherein capacity for floral shop is smaller than the latter, but considering that floral shop has more products on display, it must have capacity greater than the card shop. 3. In the ordering department, there is no consideration of employing safety stock as evident by the fact that main warehouse may at a point in time be out of stock. 4. In terms of their refund policy, its implementation is not a good idea. Even though customers may be satisfied at a high point because of this, the firm’s profitability and effectiveness in terms of sale may be sacrificed. 5. Profit sharing of employees at the same time is not a good idea. Employees are ordinarily excluded from sharing profits; therefore firm may not optimize the investment of capital or profits for the business due to the money allotted to employees which must have been used for this investment. 6. It has poor replenishment procedures because they replenished the produce 12 times a day, and this replenishment on the other side associates costs. 7. Their "farm to market" system even it is designed to reduce costs and gets produce to stores quicker may incorporate that goods may not be checked properly before it is delivered to the stores.
Opportunities
1. Customers may expand its business to other places in US if it will continue its good standing in the market. 2. Wegmans may be considered as one of the priority organizations that an applicant may look for given its better compensation benefits than others. 3. Because of the strong reputation of Wegmans for its product and service, it has great potential to increase its market share over its competitors. 4. The technology employed by Wegman gives them a good opportunity to better manage their supply chains---beginning from the outside suppliers of the goods to the ultimate consumers. 5. In terms of quality suppliers, they may also have an edge over its competitors as if suppliers will tend to offer their goods to firms who are well known and in good standing within its industry.

Threats 1. Considering that there are handfuls of stores in New York, Wegmans may decline if they overlooked their competitor's strengths and fail to improve their weaknesses. 2. Technological problem is also one of the threats. If the firm may not employ this technological change in a timely manner, then firms having creative and innovative means of doing business may overcome them. 3. Deteriorating demand for produce may also threaten Wegmans, considering that it is Wegmans’ pride product. 4. In addition to the produce, one threat that may arise is the unfavorable weather condition. Because of this, crops may be affected, consequently it may reduce the product's quality, and worst no product may be sold.

IV. Statement of the Problem
Why does Wegmans Food Market put too much emphasis on customer satisfaction that they tend to neglect or sacrifice the cost minimization and profit maximization?

V. Formulation of Alternatives

Alternative 1 Conduct market research to determine the level of satisfaction for each department or area. Those areas with low and moderate satisfaction should be the company’s priority in terms of formulation of strategies. Monitoring shall be sufficient for those areas where high satisfaction has already been achieved, to maintain such level of satisfaction.

Advantages * Determine what product gives high/low satisfaction to customers. * Identify areas for improvement and areas where level of satisfaction should be maintained.
Disadvantages
* There will be costs associated. * The level of satisfaction obtained is not absolute since the customers who will give their assessment are randomly chosen from pool of customers.

Alternative 2 Hire a consultant to assist the management in decision making.

Advantages * Provide expert/professional advice to the clientele. * Easy to adopt changes since consultant is an agent of change. * Consultant have independent viewpoint that enable him to see the true nature of the problem and distinguish between feasible and infeasible solution.
Disadvantages
* Additional cost will be incurred. * Entity may have limited control over the consultant.

Alternative 3 Conduct periodic meetings and open forums/fora regarding organizational change to be attended by each department heads/representatives who will then disseminate what they have discussed to their respective departments.

Advantage * The company will be aware of issues faced by each department. * More possible solutions through brainstorming and sharing of opinions.

Disadvantage * Conflict will arise resulting from overflowing of ideas/opinions * Decision makers usually follow the majority of the group. * It is not directly guaranteed that the problem will be solved.

Alternative 4 Human Resource department will implement strict hiring practices in terms of job requirements/qualifications to ensure that only those who are competent enough to perform their jobs are hired.

Advantage * Training cost may be minimized. * The need to attend Wegman’s Meat University may be eliminated.

Disadvantage * High standards for hiring employees may result to less potential employees.

VI. Recommendation / Conclusions
Choose Alternative No. 2 which is to hire a consultant.

VII. Implementation Plan
In order to make the alternative a success, the following detailed courses of actions are suggested. 1. Contact a well-known and competitive consulting firm having a strong reputation in the consulting industry. 2. Management and those involve in governance will discuss the main problem, concern, and reason of having them engage the consultant. 3. After matters of discussion, the terms of engagement is to be set including the objectives, scope, approach, role of personnel, communication of results, timetable, and fee. 4. Afterwards, Wegmans shall provide the necessary information and resources needed to enable the consultant analyze the data and perform the study thoroughly and effectively. 5. Give the consultant enough time to assess the situation, but within the time frame agreed on the terms, so that the wok of the consultant will be timely and relevant to the decisions of management and those in governance. 6. After the consultant assess every aspect of the situation, let the consultant present the suggestion. Management and top executives should be open-minded at this part of the process, and be willing to actively cooperate in the discussion. 7. After hearing and understanding the course of action suggested by the consultant, Wegmans management should weigh the options given by the consultant. They will consider its implication to the whole organization. 8. After discussions, then Wegmans management will implement the course of action suggested by the consultant, and every department head will be needed to cooperate with this recommended solution. The department head will be responsible to all employees under it who at the same time shall be informed of this course of action. 9. Monitor the implemented course of action through follow-up evaluations.

VIII. Contingency Plan In case that the Alternative no. 2 didn't work, implement Alternative no. 1 which is conducting Market Research.

QUESTIONS: 1. How do customers judge the quality of a supermarket? Customer judge the quality of a supermarket through the following ways: a) If everything they need and want can be found under one roof. b) If the products are systematically displayed. For example, shelf of coffee in one place while the shelf of juice in the other. c) If there is lines or queues to pay the bills. d) High quality product in comparatively low price than any other supermarkets. e) The neat and tidiness of the supermarket. f) If the employees are approachable and have pleasing personality. They are ready to answer inquiries of customers.

2. Indicate how and why each of these factors is important to the successful operation of a supermarket: a. Customer Satisfaction
Customer satisfaction measures how products or services supplied by a company meet or surpass a customer’s expectation. Customer satisfaction plays a vital role in the successful operation of supermarket. It indicates on how will a firm manage and improve the business. Customer satisfaction may also indicate whether the customer would go back to the market to buy/avail the products/services it offers. High customer satisfaction may mean high repeat purchase and generally high sales while low customer satisfaction will cause the customers to shift to other markets offering the same kind of product or services and will therefore result to a loss pertaining to the supposedly sale of the supermarket.

b. Forecasting
Forecasting is the process making prediction of the future based on past and present data and analysis of trends. Forecasting also plays a vital role in the operation of the supermarket. Forecasting implies the act of making detailed analysis of the future and planning is impossible without either predicting future as accurately as possible or making intelligent assumptions about it.

c. Capacity Planning
Capacity planning is the process of determining the production capacity needed by an organization to meet changing demand for its products. It is important to the successful operation of supermarket because without the knowledge of the capacity needed, loss of sale from potential buyers may occur. If supermarket fails to plan beforehand the capacity required for operations, the stock of inventory may not be sufficient to meet the varying demand of the customers. d. Location
Location is the key to successful operations and overall growth. It is important to consider since customer usually go to places that are more convenient for them. Location must be properly chosen in order to ensure that you have enough space for equipments used to produce goods or services, enough parking space for customers, inventories fit comfortably to the location, and if possible location from which no traffic occurs.

e. Inventory Management
Inventory management pertains to the proper management of inventory from the supplier up until the customer’s consumption. Proper inventory management may help in the successful operation of the supermarket. Highly efficient delivery systems and supply chains may ensure effective delivery of the product to consumers. It may also help the company in obtaining its objective of maximizing profit but at the same time minimizing cost.

f. Layout of the store
Layout of the store is important for the successful operation of a supermarket for it undoubtedly create smooth customer flow through the store. Good layout of the store may also prevent shoplifters to steal goods. It may also attract customers therefore increase sales. Layout of the store also allows flexibility to companies, such as when product ranges change more and more frequently, good layout allows the company rapidly respond to it.

g. Scheduling
Scheduling is the way we actually manage a project/ Scheduling helps in the successful operation of the business. It may help in describing the pathway for the supermarket to run. It serves as guidance to managers about the operation to be conducted by each department/sections.

3. What are some of the ways Wegmans uses technology to gain an edge over the competitors?
Wegmans continuously uses tecgnology to gain eddge ver its competition. Wegmans use the companywide inventory system to manage its inventory. Moreover, Wegmans is also adopting technology to maintain the freshness of the meat.