THE STATE UNIVERSITY OF NEW YORK At NEW PALTZ

“Great Food. Low Prices. Friendly Service.”

STRATEGIC MARKETING PLAN

GROUP 5: DUYGU KAYACIOGLU JENNIFER CASTILLO ANNA TRUONG-CHAU SCARLETT PANEPINTO ABDON WADE DR. RUSSELL ZWANKA BUS 429-01 Marketing Strategy Monday, November 16, 2015 Table of Contents

● Executive Summary………………………………………………………… 2
● Stop & Shop Description…………………………………………………… 3
○ Overview, History and Successes of Company
● Stop & Shop Strategic Plan and Focus………………………………….. 4
○ Mission/Vision
○ Financial and Nonfinancial Goals
○ Core Competencies and Sustainable Competitive Advantage
● Situational Analysis………………………………………………………….. 6
○ Microenvironment
○ Macroenvironment
○ SWOT Analysis (Macro and Microenvironment Factors)....
● Market-Product Focus……………………………………………………… 10
○ Growth Strategies
○ Target Markets
● Marketing Program Strategy and Tactics……………………………….. 12
○ 4 Elements of Marketing Mix Strategy
● Financial Projections……………………………………………………….. 16
○ Sales,Profits, Market Share, Unit Volume
○ Breakeven Analysis & Return On Investment (ROI)
○ Five Year Projections for Revenue, Costs, Profits
● Implementation Plan………………………………………………………… 18
○ Time Frame of Objectives, How to Monitor, Resources needed
● Evaluation and Control……………………………………………………... 19
○ How to Monitor and Correct Deviations from Plan
● Works Cited & Appendix……………………………………………….. 21-22 Executive Summary

“Mission Statement: Our commitment starts and ends with you, our customers. For a 100 years, we’ve operated our business with a single goal in mind: delivering unmatched selection, quality and value.”

Stop & Shop is the leading retailing grocery store in New England and is one of the biggest supermarket chains in the Northeast. Stop & Shop’s marketing strategy is to deliver unmatched selection, quality products, and value to its consumers. The company also plans to expand its presence by opening new stores.

Stop & Shop aims to create a positive relationship with its customers by providing a large variety of products, wonderful in-store services, and online shopping for consumers who cannot visit physical stores. In the past few years, online grocery shopping has become a trend. Consumers are now searching for fresher produce and higher-quality products without sacrificing convenience. This advantage differentiates Stop & Shop from its competitors, including ShopRite and Walmart. Along with providing the best quality products and services in the market, Stop & Shop is also improving the accessibility of these very products.

Stop & Shop’s target market are households with an income range of $25,000-$75,000.
Based on the size of our market, our sales projection for the next five years are $15.20, $15.39, $15.54, $15.85 and $16.08 in billions, respectively. The company expects its profits to rise as its revenue rises. As of now, Stop & Shop is continuing to grow and already has 185 stores in Southwestern Connecticut, New York, and New Jersey, and 220 stores in New England.

Although Stop & Shop is one of the biggest grocers in the market, it continues to work hard to improve its performance.
Stop & Shop Description

Overview:

The Stop & Shop Supermarket Company, is a chain of supermarkets that is located in Northeastern United States that includes New England, New York, and New Jersey. Since 1995, this company has been an owned subsidiary of the Dutch supermarket operator and parenting umbrella, Royal Ahold. The establishment originally started during the 1900’s as a “Greenie Store” that sold fresh produce, dry goods, fresh meats, and poultry. Less than 15 years later, the Rabinovitz family opened the first Economy Grocery Store that was established in Somerville, Maryland. During the Great Depression, Stop & Shop expanded to 435 stores throughout New England, New York City, and New Jersey- the first Stop & Shop officially opened in Connecticut and sales hit $15 million.

History and Successes of Organization:

Stop & Shop introduced many core competencies such as a new pricing strategy in 1965 which was called “mini pricing.” The company combined low prices with promotional efforts and just about 20 years later, its sales went over $3 billion. Stop & Shop decided to partner with Peapod, an online grocer delivering company, making it easier for customers to receive their groceries. In the early 2000’s, Stop & Shop made grocery shopping easier and less time consuming by introducing “SCAN IT! Technology,” a handheld device where shoppers can scan, bag, and checkout their items in less time. Not too long after that, the company opened its first Low Energy Super Store in Foxboro, Maryland. By 2010, Stop & Shop made “SCAN IT! Technology” readily available to shoppers through a mobile app. By 2011, the establishment decided to partner with Shell in order to expand their Gas rewards program. Recently, in 2014 Stop & Shop celebrated their 100th year anniversary.

Stop & Shop Strategic Plan and Focus

Mission/Vision, Financial and Nonfinancial Goals:

“Mission Statement: Our commitment starts and ends with you, our customers. For a 100 years, we’ve operated our business with a single goal in mind: delivering unmatched selection, quality and value.”

As stated on its website, Stop & Shop’s mission statement focuses on its commitment to its customers, including its goal which is to deliver unmatched selection, quality, and value. Since Stop & Shop demonstrates such dedication to its customers, we brainstormed a couple of financial and non-financial goals that would increase customer base, cultural awareness, employee satisfaction, recognition, profit, better image, etc. One of its goals should be to expand more rapidly throughout the rest of the US, and to also go as far as expanding abroad in order to receive more recognition and profit. This would be a great way to culturalize targeted products in order to increase cultural awareness and a cultural environment within the company. Stop & Shop should partner with more known, successful and ethical companies in order to increase customer loyalty, and expand their customer-base in order to maximize profits. We believe that raising operation costs, developing strategic amendments, and enhancing work training and guidance will help employees understand the inner workings of Stop & Shop and how they can improve the quality of work. Improving employee satisfaction through trainings and guidance would increase the amount of visitors and customers received through promotions, working with the community, and giving back to the community. Fulfilling social and ethical responsibilities creates a great publicity and a better image for Stop & Shop. Lastly, Stop & Shop’s management team should focus on balancing its efforts with main markets and side line stores instead of focusing on one or the other because this creates a balance between all factors that come together in the overall business, instead of falling behind in one factor and succeeding in another.

Core Competencies and Competitive Advantage:

Stop & Shop has many core competencies that work up to being competitive advantages over its competitors. It offers gas reward systems, A+ School rewards systems, Cash for Causes, and SCAN-IT Technology. In a gas reward system, customers are able to earn points on their loyalty cards each week when purchasing select gas point items. Each dollar spent is equal to one point, and every 100 points is equal to 10 cents off per gallon. This gives customers the ability to grocery shop and save up to $2.20 per gallon of gas. This program gives the company a competitive advantage by looking out for its customers and giving them a helping hand. It is a great program to take advantage of and all it requires is the use of a loyalty card per purchase in order to start saving at the gas pump.
One of the main issues that could affect this program is the expiration date on the earning points. Points must be redeemed within 30 days from the date of purchase. Although some would say that the points should have a longer expiration date than 30 days, Stop & Shop’s take on this is logically correct. The reason is that a customer usually needs to go food shopping once a week and there has to be at least one person in the household filling up the gas tank at least 1-2 times a week, if not more. This gives the customers enough time to earn their points while shopping and to redeem them every time they take their car to the gas station. One of the reasons that consumers may have an opposing idea to this is that too many restrictions can cause frustration to consumers if they miss the opportunity to use the points beyond the expiration date.
Along with the gas rewards system, Stop & Shop also offers an A+ school rewards program where parents or anyone who decides to support a school, are able to raise money with every purchase made so that the supported schools are able to purchase necessary supplies for its students. This reaches out to consumers with families who have children or people in their families who attend school.
Stop & Shop also offers Cash for Causes, a fundraiser for nonprofit organizations. This targets and helps non-profit organizations fundraise by selling Stop & Shop gift cards at a 5% discount, while still keeping the profit for the organizations. This gives back to the community and helps organizations fundraise for their specific causes.
One of Stop & Shop’s most known core competencies is its SCAN IT Technology. As briefly mentioned earlier, Stop & Shop came out with a handheld device where shoppers can scan, bag, and checkout their items in a less amount of time. This is definitely an important attribute to Stop & Shop because no other supermarket offers this type of technology.
Lastly, with the rise of technology demand increasing, Stop & Shop offers a mobile app where customers are able to build their shopping lists, find their nearest Stop & Shop store, and view the weekly circular before they get to the store. This benefits all markets because along with the rise of technology, most people are familiar with apps and how convenient they can be.
One issue Stop & Shop must solve is its lack of targeting with those who do not have families, or do not own cars. It is important for Stop & Shop to find a specified attribute that would benefit everyone as individuals. Overall, it seems as if Stop & Shop is very concentrated on building its customer experience up to perfection and are set on benefiting many target markets to increase customer loyalty.

Situational Analysis

Micro Environment:

Stop & Shop’s microenvironment consists of customers, competitors, and suppliers. The usual Stop & Shop customers are families, online grocery shoppers, and commuters with vehicles. Stop & Shop keeps its relationship with its customers through many competitive advantages such as its programs designed for specific markets like vehicle owners and drivers, students, families, schools, causes, etc.
Stop & Shop takes place among really big competitors in this industry. The competitors includes:
● ShopRite
● Big Y Foods, Inc.
● BJ's Wholesale Club, Inc.
● Cvs Health Corporation
● Demoulas Super Markets, Inc.
● Hannaford Bros. Co., Llc
● Kmart Corporation
● Rite Aid Corporation
● Shaw's Supermarkets, Inc.

● Target Corporation
● The Golub Corporation
● The Great Atlantic & Pacific Tea Company, Inc.
● The Kroger Co.,
● Walgreen Co.
● Wal-Mart Stores, Inc.
● Wegmans Food Markets, Inc.
● Stew Leonard's Holdings, Llc

As we analyze Stop & Shop’s overall competitors, one of its big local competitors in New Paltz is ShopRite. When comparing Stop & Shop and ShopRite, there are a lot of similarities in products and operations such as having a fresh cold cut and meats deli, salad bars, fresh coffee beans, a pharmacy, a bank, an organic food section, and a savings card rewards program.
Although both supermarkets have similar products and operations, Stop & Shop has many innovative ideas to offer that cater to its customers’ needs. For example, Stop & Shop offers free samples in its fresh food section, creates a faster way to pay for goods with self-checkout, and has an online pharmacy for prescription refills. Stop & Shop also has a small discount section which displays reduced items for quick sales. Its organic section has its own aisle that is completely separated from everything else and is easy to find. One of the top organic brands Stop & Shop provides is “Nature's Promise.” There is also a difference in flooring between food products and other isles such as the beauty and personal health care section to give customers a sense of direction and recognition of where they are headed.
Stop & Shop’s suppliers play a big role in the microenvironment because they are the main source of these products. Stop & Shop suppliers are generally local farmers. Most of their fresh food products if not all are grown from these farmers and shipped out to the closest Stop & Shop nearby. They tend to have great relationships with their sources.

Macro Environment (uncontrollable forces):
Like all business, there are quite a few factors that affect the macro environment of Stop & Shop. These factors are uncontrollable forces that occur outside of the company that can affect it in significant ways. One factor is the organic and health trend that has been going on for a while. Some customers have been clean eating and are influenced by the trend to eat better foods. These customers are more aware of what they purchase and what they consume. Some competitors of the New Paltz Stop & Shop are the farms in New Paltz that sell locally grown organic foods. The difference between Stop & Shop and the local farms is that the former is a corporation and the latter are small businesses. Although some local farms work with Stop & Shop as suppliers, consumers may choose to purchase goods at these farms than at a supermarket. By doing so, customers aim to directly support their neighboring small businesses and to save money. These farms are also aesthetically pleasing which can attract customers.
Customers are also cost-aware and are looking for ways to save money. Couponing is a trend and many consumers are searching for the best value at the best prices. The New Paltz Stop & Shop is considered the more expensive grocery store compared to the ShopRite in New Paltz. Stop & Shop has been trying to combat this with strategies such as promoting their ‘low everyday prices’, hyping their sales and discounts, having discounts on the same items often, and providing coupons in their weekly circular to increase more savings for their valued customers.
Another macroeconomic factor for Stop & Shop is that the stores open and close at reasonable hours. The store in New Paltz is open from 7:00 am to 12:00 am everyday except Sunday, which closes an hour earlier. The store is opened late for customers who do not have time to shop earlier than they want to. This is convenient for shoppers who are full-time workers, have family to take care of, or are generally too busy to shop in advanced. This is an external factor because it is based on Stop & Shop’s current and potential customers and these customers’ own time.
SWOT Analysis for Macro- and Microenvironmental Factors:
Strengths:

● High brand recognition
● The company has a 6 to 7% increase of revenue annually
● Has a lot of innovative ideas and is involved in customer’s vision
● High store productivity level
● Has 80,000 employees with a strong management team
● High profitability and revenue
● Versatile company that can adapt with its changing environment Weaknesses:

● Poor performance in peripheral markets
● Store concept hard to replicate given size and targeted shoppers/consumers
● Too reliant on manufacturers monies
● The main markets are good at management but the side-line store are least attended by the management team.
● In each of the store unlike its competitors, the investment is high fixed cost rather than return on investment.
● The store size and the visited customers don’t increase with time as the company’s presence has grown a bit older.
● The company is highly dependent upon the duties or tolls of the manufacturers.
● Limited areas being served demographically including New England and Mid-Atlantic. All the stores rather spreading apart are concentrated in few states.
Opportunities:

● Conversion of G stores to super stop & shop metro stores at New York to enhance the sales eventually covering up the deficit faced by the company G stores
● The alliance of the company with Dunkin Donuts and Starbucks, although some of the Starbucks coffee retailing has been closed at their outlets
● The major opportunity of the company is launching of the web 2.0 concept based mega advertising campaigns in which the video related to the brand experiences of people were shared on the stop & shop TV website
● The altered format of the company is believed to serve the customers having limited time as the store is designed into a smaller box like structure
● Moving towards hybrid pricing strategy
● Join with another partner Threats:

● The employee’s strikes through the labor unions as the health contracts are of limited time span
● The operation cost of the company is at edge to rise and strategy amendments are needed especially in the case of wages and extra facilities
● The internal stability of the company is at stake.
● They facing a number of rivals and competitors at all the presence places as in England Hannaford and Shaw’s Star Market, in New York ShopRite and in New Jersey A&P have their deep rooted presence.
● Traditional and new channel competition

Market Product Focus

Growth Strategies:

As of 2015, Stop & Shop has entered into an agreement with The Great Atlantic & Pacific Tea Company to acquire 25 A&P stores. With this new agreement, Stop & Shop will expand into the greater New York area which is conveniently located to serve many customers. With the store openings, Stop & Shop is looking to make improvements on the entirety of the store which includes a modern décor, updated refrigeration, new lighting, and state-of-the-art-technology. Stop & Shop understands that many of its customers have busy lifestyles resulting in a demand for convenience. In its new stores, Stop & Shop will offer fresh produce, deli, fish, and bakery departments. In addition, customers will have access to ready-to-eat sandwiches, salads, fresh rotisserie chicken, and pasta entrees.
Stop & Shop wants its products to be available to its customers, not just with store locations but with its online business as well. The company wants to grow its online business to give customers shopping alternatives that will meet their needs. With access to online shopping, customers can shop whenever, wherever, and however they want to and have a delivery or pickup option for their desired items. Customers will also have a broader range of products and services to choose from. Stop & Shop wants to have a better selection of non-food products and to include new and innovative own-brand products. The implementation of this plan was a success, showing a double-digit sales growth. To make the online environment enjoyable and more customer-oriented, Stop & Shop has Peapod to make online shopping easier. When using Peapod, customers can either drive and pick up their online orders at pick-up points or have their groceries delivered to their house on a chosen day. Customers can also search and use coupons when ordering through Peapod online.
Stop & Shop has come a long way in improving its in-store merchandising strategies. The company continuously works hard to make its customers’ shopping experience that much better. As mentioned earlier, the use of SCAN IT! has been successful and delivers a considerable amount of value resulting in higher customer spendings of up to $7 more per trip. Another feature of the device is the “Order It” which notifies customers when their deli order is ready either through text message or with an in-store announcement.
Customers are concerned more than ever about living a healthier lifestyle. With the amount of information and knowledge they carry, they are more aware of lifestyle-related diseases, allergies, and other conditions that can affect their health. With that in mind, Stop & Shop has made a commitment to address its customers’ concerns with regards to organic goods and those under Integrated Crop Management. Using the ICM approach, the use of harsh substances is reduced by using natural and technical approaches to plant nutrition and pest reduction.

Target Markets, Points of Differences, Positioning of Company:

The New Paltz Stop & Shop is located in a college town with a median resident age of 22 years old. Citizens who live in New Paltz have high education levels but very low income levels. Household income ranges from $25,000- $75,000. Being that Stop & Shop is priced a little heavier than its local competitor, ShopRite, the company is targeting middle income groups. Stop & Shop is also seeing a limited population growth in its markets with an aging consumer base. This limited population growth can be due to the fact that its higher prices are not attracting the college students/younger people who make up most of the demographic in New Paltz.
Stop & Shop is a one-stop shopping store which meets the needs of customers who are seeking convenience, variety, and service. For example, some of their in-store services and amenities includes Starbucks, banks, Redbox, Coinstar and Blue Rhino. Stop & Shop is positioned very well compared to other food retailers in major metropolitan areas. Having many of its stores in one area gives the company an advantage, allowing it to acquire most of the market share. Stop & Shop takes up 23% of the market share, which is as large as four of its competitors combined.

Marketing program strategy and tactics

4 Elements of Marketing Mix Strategies: Product
Stop & Shop offers a full range of food and selected non-food products. It offers healthy, fresh, and sustainable food, with a large product offering in each segment. With busy lifestyles, many customers search for convenience and Stop & Shop does a great job of providing that with easy-to-prepare meals and personalized offers. Different departments are available for different needs such as meat, seafood, bakery, and fresh produce. Stop & Shop aims to provide better product offerings, to increase its commitment to selling organic goods, and to be more environmentally friendly. As mentioned before, the company is working under the ICM to develop approaches that will lead to better plant nutrition, allowing the amount of chemicals and pesticides used to be kept to a minimum.
4 Elements of Marketing Mix Strategies: Place In the marketing mix, the process of moving products from the producer to the intended user is called place. In other words, it is how your product is bought and where it is bought. This movement could be through a combination of intermediaries such as distributors, wholesalers, and retailers. In addition, a newer method is the internet which itself is a marketplace now. Through the use of the right place, Stop & Shop can increase and maintain its sales over a longer period of time. In addition, this would mean a greater share of the market and increased revenues and profits.
From its beginnings in 1892 as a small grocery store, Stop & Shop has grown to become the largest supermarket operator in Southern New England. Stop & Shop’s market areas are 400 outlets in Connecticut, Massachusetts, New Hampshire, New Jersey, New York, and Rhode Island. To position Stop & Shop for growth, Royal Ahold has divided the company into two regional groups: Stop & Shop Metro New York, with about 185 stores in southwestern Connecticut, New York, and New Jersey; and Stop & Shop New England, with about 220 stores in Massachusetts, New Hampshire, Rhode Island, and Connecticut (except Southwestern Connecticut). Both units operate supermarkets and superstores.
Stop & Shop added several new stores in 2012 and is continuing to grow in an opportunistic fashion in its established markets. In 2013, the New England division acquired the lease to a Johnnie's Foodmaster store in Somerville, Massachusetts, which will reopen under the Stop & Shop banner.
Stop & Shop works with the Ahold-owned e-tailer Peapod to provide online shopping in Boston, Connecticut, New Hampshire, Rhode Island, and Long Island. Through a partnership with Dunkin' Donuts, some 70 full-service Dunkin' Donuts franchises operate inside selected Stop & Shop stores throughout Massachusetts, Connecticut, and Rhode Island. Stop & Shop supermarkets also house Staples office supply departments.
Correct placement is a vital activity that is focused on reaching the right target audience at the right time. It focuses on where the business is located, where the target market is placed, how best to connect these two, how to store goods in the interim, and how to eventually transport them. Placement, or distribution, is the process and method used to bring the product or service to the consumer. A distribution channel can be defined as the activities and processes required to move a product from the producer to the consumer. Also included in the channel are the intermediaries that are involved in this movement in any capacity. These intermediaries are third party companies that act as wholesalers, transporters, retailers and provide warehouse facilities.
Stop & Shop has indirect distribution channel. As indicated below as a scheme.
Direct

Indirect In this channel, Stop & Shop uses an intermediary to sell a product to the consumer. Stop & Shop may sell to a wholesaler which further distributes to retail outlets. This may raise product costs since each intermediary will get their percentage of the profits. This channel may become necessary for large producers who sell through hundreds of small retailers.
4 Elements of Marketing Mix Strategies: Promotion
Stop & Shop uses promotion to communicate valuable information to customers that will assist them in their decision-making process. Stop & Shop wants customers to decide for themselves whose quality and value is better when comparing its own store brand with national brands. To support this theory, Stop & Shop held a promotional event in the summer of 2014. During certain weeks, Stop & Shop would challenge its customers to put its own brand products to the test in the “Buy Theirs, Get Ours Free Challenge”. Whenever customers purchased national brand products, they would receive Stop & Shop brand products of equivalence for free. Customers responded very well, discovering the great quality Stop & Shop was offering with its products. Customers who shop at the store tend to only purchase brand-name products. Store brands can be underestimated of quality and value; with this promotion, customers are given the opportunity to test out both brands at no expense of the store brand. If customers realize both brands compare just as equally, they will be more prone to purchase the store brand. Also, if consumer buying patterns shift, they can find themselves saving 10% to 35% with the the purchase of store-brand products. This promotion shows that Stop & Shop works hard to provide quality in its own brand. Other promotions include 10 for $10 deals on items and dollar off select products that have a near expiration date. Stop & Shop is successful with these promotions and should continue the path they are on by informing customers of its quality store-brand products and its special in-store deals.

4 Elements of Marketing Mix Strategies: Price
Stop & Shop is known to have slightly higher-priced products than most of its competitors. However, this does not restrict the company’s customers from choosing its products over its competitors’ products. In fact, its customers choose to remain loyal to Stop & Shop’s products. These customers prefer the way Stop & Shop conducts business and how the company delivers the best quality products on the market. More importantly, Stop & Shop offers an exceptional shopping experience. One pivotal factor that sets the company apart from its competitors is the way its employees are treated. Stop & Shop provides its employees with the best work benefits compared to its competitors. This includes full coverage health insurance, paid vacation time, and paid holidays for its employees. Furthermore, this sustains its consumers to pay high prices for its products. Stop & Shop’s operating cost is higher than most of its competitors, hence, its prices are reasonable and justified. The company intends to remain with its prices for the time being. Its consumers demand high quality products and are committed to paying higher prices.
Financial Projections
Sales, Profits, Market share, Unit Volume:
As noted earlier, Stop & Shop is part of Ahold. Ahold’s sales have been dropping in the last two years in the United States. Just from 2013 to 2014, the sales growth saw a 0.6% drop and sales, excluding gas, dropped 0.4%. However, Stop & Shop’s sales have grown by 3% in New England and 0.7% in New York. This increase in sales for Stop & Shop’s profit rose by 3.25%, giving them a total of $15.2 billion in revenue.
Ahold has been working on its operational costs and has been able to cut down some of these costs. Therefore, even though Ahold sales took a hit, is has been able to manage its profits really well with only a 0.01% decrease. Having said that, it can only be assumed that Stop & Shop must have risen slightly from 2013 to 2014 since its sales have been rising while costs went slightly down. Ahold makes 60% of its sales in the U.S and have 2.5% market in U.S. Ahold’s stock price has basically been stable from 2014 until now, floating between the 19 – 20.35 range except for October 2014, when it dropped to 15.98
Breakeven Analysis:
Evaluating a company's production costs and its pricing strategy can project when it can most likely break even and when it is likely to generate a profit. If the product or service is new, it can be difficult to predict demand, which is a third factor in a break-even analysis.
A break-even analysis is used to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even analysis calculates what is known as a margin of safety, the amount that revenues exceed the break-even point. This is the amount that revenues can fall while still staying above the break-even point. Break-even analysis is a supply-side analysis; it only analyzes the costs of the sales. It does not analyze how demand may be affected at different price levels. The break-even point is the point at which gains equal losses. Reaching the break-even point is a business's first step toward profitability. However, information on Stop & Shop’s break-even analysis was unclear. Instead, a Return On Investment (ROI) was analyzed in place of a break-even analysis.
Return On Investment is a very popular metric because of its versatility and simplicity. Essentially, Return On Investment can be used as a rudimentary gauge of an investment’s profitability. ROI can be very easy to calculate and to interpret and can apply to a wide variety of kinds of investments. That is, if an investment does not have a positive ROI, or if an investor has other opportunities available with a higher ROI, then these ROI values can instruct him or her as to which investments are preferable to others.
Ahold’s return on the money and effort invested was startling. After only 18 months, Ahold reached the ROI breakeven point, and within five years of completing the project, the company was already saving € 1M per year. Ahold NV's annualized return on invested capital (ROIC) for the quarter that ended in June 2015 was 16.18%. As of today, Ahold NV's weighted average cost of capital is 9.95%. Ahold NV's return on invested capital is 17.06%. Ahold NV generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Five year Projections for revenue, cost, and profits:
With Stop & Shop’s strategy, its five-year projections for revenue, costs, and profits is represented in the table below.
Numbers are in billion dollars.

Year 1 Year 2 Year 3 Year 4 Year 5
Revenue 15.20 15.39 15.54 15.85 16.08
Costs 14.93 15.06 15.19 15.43 15.64
Profit 0.268 0.327 0.343 0.415 0.439

Implementation Plan
Time Frame of Objectives, how to monitor, resources needed:
The following numbered points are Ahold’s objectives.
1. To reach market leadership wherever it operates, no specified time frame: Ahold’s main objective is to achieve cost leadership through the value proposition it offers to customers. It believes that top-line performance is always followed through growth, acquisitions, alliances, and by maintaining a balanced portfolio of investments (mature and growth markets). Ahold is now a multi-channel food provider that has a great amount of experience in food retail, and the food service industry. Through mobile apps, and SCAN IT technology, Ahold is developing its position as an e-commerce company.
2. Profitable organic and external growth, 5 Years: This growth is a fundamental part of Ahold’s strategic mission; its goals are “to double net earnings every five years and to maintain double digit earnings per share growth (excluding currency impact) while improving our return on invested capital.” In order to reach these goals, Ahold expects to take advantage of opportunity costs, expense reductions, organic, and external growth. It anticipates that the majority of its earnings will derive from existing operations and acquisitions. It plans to finance smaller acquisitions with cash flow from operations/new borrowings.
In order to achieve these objectives, Ahold has developed a strategy to build a world class group of food retail, and service companies, working together for their own advantage. These companies are supported by a global network ensuring economies of scale, benchmarking, and the exchange of practices. Ahold supports autonomous growth of its companies through prioritizing investments in markets. It encourages the strengthening of market leadership through innovation, expansion of services, and new technologies. Its acquisition strategy requires companies to fit with Ahold geographically, operationally, and strategically. As a national umbrella to these companies, Ahold continuously looks to expand through add-on, stand-alone, wholly-owned acquisitions or alliances.
Evaluation and Control
How to monitor and correct deviations from plan:
As mentioned above, Ahold has several goals and objectives. The company plans to achieve cost leadership by building a great relationship with its customers along with doubling its net earnings every five years to maintain its desired earnings per share growth. Ahold expects its companies to be innovative to achieve its goals. Usually, goals have certain deadlines and companies have to make sure they are doing everything correctly by practicing proper evaluation and control.
When it comes to monitoring goals, Stop & Shop has to see if its goals are attainable and if there is any progress. Stop & Shop has to look into adequate resource and plan its course with a timeline to make sure they are on schedule while implementing its strategies. Stop & Shop should be updated with the status of implementation every month. Its progress should be analyzed and compared with its plan. Deviations from the plan is a natural occurrence. Since a company’s strategic plan is a guideline, it is understandable to digress from it every once in awhile. Over time, a company will experience a dip from certain controllable and uncontrollable forces. This might be of help to the company; it may show if it needs to change its plans to better fit the current environment the company is in. If not, the company has to know what they can fix to achieve its results. It is not difficult for a company to change its tactical tools or its original strategic plan, but it is difficult to change its target market and its positioning. The most important thing is always remaining on track.
Stop & Shop sales has grown 0.7% in New York and the company is planning to expand in the greater New York Area with more stores. Stop & Shop will continue to grow as it implements its innovative strategic plans.

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