History

Wal-Mart has been selling groceries for a mere 16 years, making it a relative newcomer in the industry compared to most of its competitors. Wal-Mart’s Neighborhood Markets has huge effect on industry, Wal-Mart is traditionally known for its Supercenters, big-box stores that cover expansive square footage and offer extensive product selection. The Neighborhood Markets are significantly smaller and are intended to reach the local markets that aren’t always covered by a Wal-Mart big-box store. In many cases, these markets contain the customers that Albertsons has targeted as crucial to its success. Neighborhood Markets are strengthened by the same low prices and powerful supply chain that make the company’s Supercenters a seemingly unstoppable force. With 2,305 retail stores in 31 states, Albertsons is one of the largest retail food and drug chains in the world. Among these retail stores are 1,351 combination food-drug stores, 707 standalone drugstores, and 247 conventional and warehouse stores. Albertsons is working to reduce costs in the supply chain so that its stores can offer prices that are more competitive with Wal-Mart’s prices. It must dramatically close the profit margins if it is to become the number one grocer in the United States. Merchandise currently sells for 20 to 25 percent more on average than Wal-Mart’s product offerings. Wal-Mart’s Retail Link network pulls in point-of sale data from its retail stores every 15 minutes, giving suppliers incredibly up-to-date information on how their products are selling. Other retailers capture sales data only once or twice each day. It keeps inventory down to the necessary minimums and operating costs low so that overhead takes a much smaller chunk out of the company’s sales revenue.

Analysis 1. Cost reduction
Albertsons is working to reduce costs in its supply chain so that its stores can offer prices that are more competitive with Wal-Mart’s prices. Johnston has consolidated distribution centers and is using the Web to coordinate shipments and to reduce billing and invoicing costs.

2. System upgrading
The company has also upgraded its core corporate systems, moving financial applications to software from Oracle and its human resources management to PeopleSoft software. In addition to the Oracle and PeopleSoft adoptions, he has also upgraded the company’s high-speed network infrastructure. Albertsons had already added electronic data interchange (EDI) capabilities, which enable better processing of transactions with suppliers. However, Albertsons does not yet have a system comparable to Wal- Mart for sharing sales data with suppliers and for automatically placing orders in reaction to sales that are taking place in the field.

3. Simplicity of Shopping
Wal-Mart explicitly tries to keep technology in the background to keep customer shopping experiences simple.

4. Talent Hunt
CEO Johnston believes that brain power is just as critical to the success of his company as technology is. Johnston scoured corporate America for the most talented and respected executives in retail and other industries. He hired CTO Dunst away from competitor Safeway, where Dunst had 25 years of experience developing applications, working with loyalty card systems, and using advanced technology to analyze data. The supply chain management team has been stocked with technology pioneers and top guns who bring their expertise from such companies as PepsiCo, Dell, and even Wal-Mart.

5. New Improvement
Albertsons can also use its loyalty card program to obtain more precise information about individual customers and offer products that they might not find on Wal-Mart shelves.

6. Digital Shopping Experience
Larry Johnston’s plans for technology-enabled grocery stores include a completely digital shopping experience that begins in the home and involves the Internet and Global Positioning System satellite technology. Customers would be able to setup their shopping lists from home through an Internet portal that is connected to their local Albertsons store. They could also add information to their accounts such as allergies and dietary restrictions. When customers arrive at the store, they would use a customer loyalty card to obtain and held device. The device would download the shopping list and any other important information and then sync up with the store’s inventory

7. Well managed Portfolio
Wal-Mart currently holds that distinction with $56 million in annual revenue from its grocery departments. Albertsons stands in third place, $20 million behind Wal-Mart in revenue. Albertsons earmarked half a billion dollars for technology advancements in 2004. One goal of this investment is to improve the company’s profit margin. .

8. Good customer Relation
Wal-Mart has good relation with customers and experience in customer handling; Wal-Mart has been selling groceries for a mere 16 years

Questionnaire

1. From where you purchase regularly?

Uttara Market, and Agora,

2. What portion of income you used for shopping?

Al most 40%

3. Do you thing price of this store is reasonable?

If yes, compare to other store.

4. Is there any store nearby your house?

Name of the Store: Moholla Shops

5. Which items you prefer to buy from this store?

After Noon

6. Did you get all the items from this store?

Yes,

7. Have you ever feel bore to during counter checking?

No

8. How you can describe the store in one line,

Everything in one place

9. Why you prefer this store than others?

Fresh items, cheaper than other stores, good behavior of the staffs

10. Have you ever experienced any bad behavior form the staffs?

No

11. Have you ever complain for any products or service?

No

12. Are products are well arranged according the index?

Yes

13. How much time you take to purchase from this store?

10 -30 min

14. Who is accompanying you during shopping?

Wife

15. Are they providing fresh items?

Yes

16. Is there any option of using credit cards?

Yes

17. Have you ever purchase during Eid?

Yes. If yes, specific date: Last Eid-Ul-Azha

18. Is there any suggestion from you to improve the service quality of the store?

Should introduce different readymade food items.

Recommendation
“Make Life Easier for Our Customers.”

Is the marketing vow of Albertsons. But Digital Shopping experience of buyers was not example to make life easir. Without man means staffs involvement in cash counter, Buyers have to face hazards during counter clear.

Albertsons have not given enough attention to the fact that the traditional industry competitors will be a monumental challenge. The nature of the top three players in the industry and their relative bargaining power will greatly determine industry structure and the overall profitability of doing business in the grocery business environment.

Again, Albertson have first what they want to achieve? Market leader or Market Follower?

If they want to be market follower they have to follow every activities of Wal-Mart. If they want to market leader they have to more emphasis on cheap supply of product and good supply chain system. If they only emphasis on the technology; it will make the life complex and lots of staffs will lost their jobs, which ultimately increase misery of labor.

Reference ❖ Web page of Wal-Mart and Albertson ❖ Wikipedia ❖ Mel Duvall and Kim S. Nash, “Albertson’s: A Shot at the Crown” ❖ Mel Duvall, “Roadblock: Internal Resistance,” ❖ David F. Carr, “Gotcha! The Problems with Self-Service Checkout Systems,” and Todd Spangler, ❖ “Teradata: Too Rich for Your Blood?” Baseline Magazine, February 1, 2004; Jonathan Collins, ❖ “Albertsons Announces Mandate,” RFID Journal, March 5, 2004; ❖ Associated Press, “Albertsons to Test Handheld Grocery Scanners,” USA Today, March 29, 2004.

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Name: Bappa Rahman
Address: House # 12, Line # 03. Sector # 17, Uttara. Dhaka
Gender: Male
Age: 45 yrs
Educational Qualification: BA (Economics)
Contact Number: Mobile 01763-329834
Email Address: Bappa_54@yahoo.com