Case Analysis for Reed Supermarkets
1. Situation Analysis
1) Strengths：
 High differentiation
 High quality (the Top 2 on the quality index )
 Emphasis on organic food and wide range of products
 Attractive stores
 Long hours
 Elegant serving-case displays
 Attentive customer service
 Leader in the regional market: 25 stores in operation and highest market share in Columbus
 The supermarket is a location based business and the location of the stores are good (in the areas with higher household income and population growth and lower employment rate compared to national average)
 Continuous growing revenue by an average of 1%-2% per years
2) Weaknesses:
 High price: the third lowest on the price index
 The target market is limited to peosperous customers
 The deterioriating brand image: the “Dollar Special” could confuse consumers and decrease Reed’s quality status
 Low margin: margin only occupies 2.1% of gross sales
3) Opportunities:
 American consumers become more health-conscious
 Growth of private label merchandises decreases the bargain power of manufacturers
 The resurgence of America economy in the future
4) Threats:
 Intense competition (Delfina, Whole Foods market, Aldi, Walmart, Sam’s club, Dollar stores)
 Decreasing customer loyalty in the industry: customers are cherry-picking and care more about the price during the economic downturn
 Dollar stores benefits from growth of private label merchandises with lower quality
 The entry of newcomers – Whole Foods Market in the upper-end market

2. Problem Definition
1) Symptoms:
 Dwindling customer loyalty
 Stagnation of the market share
 Intense price competition
2) Problem: market positioning

3. Development of Alternatives
1) High-end positioning: Stop “Dollar Special”, retain the brand image of high quality and focus on high-end customers
2)