Jessy Elliott

Jessy Elliott Adv 403 SWOT Analysis 1 Table of Contents: History: 3 Brand Analysis: 4 Company Overview: 4 Business Description: 5 Strengths: Product Portfolio 6 Strength: Awards and Recognition 6 Weaknesses: Product Recalls 7 Opportunities: Industry Growth 7 Opportunities: Gain Brand Awareness 8 Opportunities: Jobs 8 Threats: Consumer Demands 9 Competitive Analysis: Direct 9 Competitive Analysis: Indirect 9 Consumer Insights: Target Market 10 Marketing Environment Analysis: 10 Summary 11 2 History: Wegmans is a family owned store that opened in 1916. Wegmans, which was originally called Rochester Fruit & Vegetable Company, was owned and operated by Walter and John Wegman. John opened the Rochester Fruit & Vegetable Company, which marks the beginning of Wegmans Food Markets. and Walter joined him a year later. As time went on the brothers made many changes to the store (Wegmans 2014). In 1921 John and Walter purchased the Seel Grocery Co. and expanded operations to include general groceries and bakery operations. They then made national headlines when they opened a 20,000 square foot store (gigantic by the standards of that time) and with new, almost foreign innovations like vaporized water spray (Wegmans 2014). In 1931, Wegmans became incorporated. They featured meats, produce, groceries, dairy products, and baked goods. Then in 1932, Wegmans introduced two Rochester firsts: refrigerated display windows and vaporized water sprays to keep produce fresh. In 1940, “Frosted,” or frozen foods were introduced at Wegmans; then in 1949, Robert Wegman converted stores to full self-service format. Throughout 1950, Wegmans introduced benefit programs to their employees (Wegmans 2014). In 1960, Wegmans decided to expand and adopt their own private label. Wegmans joins Staff Supermarket Associates to obtain their own 3 "Staff" brand for private label products ranging from frozen food to sponges. During the 1970’s Wegmans was one of the first to install check out systems, and they also introduced many firsts, such as seafood, and in 1979 they started producing their own private label (Wegmans 2014). Brand Analysis: The Wegmans brand is very popular, not only among customers, but for employees as well. They provide all employees with benefits. Many include a 401k, paid vacations, and much more. Danny Wegman, CEO explained that their prices are based on cents, not percentages. Along with their many awards and high ranking on the Forbes Platinum list, this kind of positive feedback gives the company a larger edge in such a competitive market (Canadean Company Report 2014). Compared to their many strengths, Wegmans has a few weaknesses. One of their biggest instances of weakness occurred in 2012 when they had to recall over 14 products from the shelves Canadean Company Report 2014). Food recall is based on three classes. Class one is probable exposure to certain products that could cause adverse health effects or death. Class two involves exposure that produces temporary or medically reversible (adverse) health effects. Class three involves exposure to a product that is not likely to cause ill effects. Product recalls or deficiencies have a very negative impact on the brand and the store, but they are able to be corrected and taken care of quickly. Wegmans also has many positives to offer employees and customers as well. Expansion is a big positive for Wegmans. With the product variety and services they have to offer, such as restaurants, bakeries, delis, full service food options, and much more, it gives the company more opportunity to expand and grow. Another reason it does is because it enhances the consumer's experience and offers a little something for everyone. Expansion can also bring in major revenue for companies and chain stores. Recently in 2011 and 2012, Wegmans opened stores in Pottsville, Columbia and Massachusetts (Canadean Company Reports 2014). Research on Wegmans shows that they are a very prosperous business. Not only does it generate substantial revenue, it was also deemed one of the top places to work for; provide a variety of employee benefits, and practice great work ethic. They also strive to be among the top grocery stores and consumer experiences. Altogether Wegmans offers a productive and promising brand image and franchise. Company Overview: Wegmans Food Markets, Inc. or Wegmans, which was also formerly known as Rochester Fruit & Vegetable Company. Wegmans is a family owned supermarket chain, that is spread out across the region; with their main headquarters located in New York (US) Wegmans provides customers with a unique experience along with a variety of retail options, including categories such as, but not limited to, food, cosmetics, and other various accessories. It has over 80 operating chains spread out across the US, residing in New York, Pennsylvania, Maryland, Northern Virginia, Massachusetts, and New Jersey (Canadean Company Reports 2014). Wegmans product line provides a large quantity of products to the consumer. Their line 4 contains cosmetics, cookware, tableware, beverages, grocery items, seafood, floral items, pharmacy products, dairy, personal hygiene and care, flowers, bakery supplies, pastries, and seasonal items. They also carry a wide range of brands and organic products, cookware, tableware and accessories. It also consists of restaurants. Wegmans also provides customers with a full service website that includes an assortment of information (Canadean Company Reports 2014). Customers can get recipes, meal ideas, cooking techniques, gift ordering services, and party planning information. The company is also looking to spread more across the Mid-Atlantic. The company has been around for many years and the brand Wegmans has continued to grow and become a rewarding and flourishing company. Business Description: Wegmans chain consists of 80 specialty food market stores. The stores can range between 80,000 to 140,000 square feet and can contain up to 70,000 items compared to an average of only 40,000 compared to most supermarkets. The company operates a chain of 80 supermarket stores across New York, Pennsylvania, New Jersey, Northern Virginia, and Maryland states of the US. Out of 80 stores, 46 are located in New York, 15 in Pennsylvania, seven in New Jersey, six in Virginia, five in Maryland and one in Massachusetts. The company operates nine distribution centers between Rochester and Pennsylvania. It has a customer service center which acts as a connection between stores, transportation, distribution centers, and corporate merchandising for efficient management of the supply chain. The stores also come with a pharmacy. The company's pharmacy stores sell prescription drugs, generic drugs and other related products. It accepts over 1000 prescription insurance plans and medicare assignment for covered also offers prescription refill service through these stores. It provides a special service called "SmartFill" an automated telephone service to order the prescription refills (Canadean Company Reports 2014). The company operates nine distribution centers between Rochester and Pennsylvania. It has a customer service center which acts as a liaison between stores, transportation, distribution centers, and corporate merchandising for efficient management of the supply chain. The company also offers a program called Ready Cook that offers ready to cook food from various places from around the world such as Italian, Asian, Indian, Kosher, Latino/Hispanic, British, and German (Canadean Company Reports 2014). Wegmans chain of 80 specialty supermarket stores can be big enough to include in store cafes, sub shops and French style pastry shops across the mid- Atlantic region of the US. It offers a wide range of products in the areas of baby, bulk foods, bakery, beer, baking, beverages, catering and party trays, kitchen and dining, cheese, cosmetics, gifts and party supplies, deli, dairy, frozen foods, floral, grocery, household supplies and health and wellness. Wegmans also provides products in the areas of international foods, seafood, prepared foods, pet food and supplies, meat, organic, laundry, kosher and cleaning products, paper and plastic, office supplies, personal care, seasonal, sushi, and wine, spirits, spices and seasonings (Canadean Company Reports 2014). The company's Market Cafes offers take-outs and in store dining to its customers. The market cafes have seating capacity of 100-500 people. The market cafes offer appetizers, pizza, sandwiches, soups, gourmet sandwiches and other delicacies. It also includes a coffee shop, 5 Sushi bar, wokery buffet and fresh food bar, seafood and Asian bars (Canadean Company Reports 2014). Wegmans deli and cheese shops sell 300 varieties of meat and specialty cheeses to its customers. The Floral greeting cards and gift shops sell floral products, greeting cards and other gift items. The Wkids fun centers offer a special service where the kids between 3 to 8 years can play while their parents are shopping (Canadean Company Report 2014). Providing customers with a variety of cultural meals and food will gain more clients. With the diverse community the Pittsburgh atmosphere provides Wegmans is able to provide customers with a diverse experience as well. Not to mention fulfill the needs of many individuals from different cultures. Having these products to offer will increase brand credibility and also brand awareness. They have a very extensive diet section as well. It offers special products like fat free, Gluten free, High calcium, high fiber, lactose free, low calorie, low sodium, sugar free. Wegmans also announced they will launch a program to offer Atorvastatin, the generic for Lipitor, up to a 90 tablet supply at no charge until April 2013 (Canadean Company Reports 2014). Strengths: Product Portfolio One of the company’s main strengths is offering a wide variety of products and options for their customers. This is also good for new customers since they will have an abundant amount of options to look at and shop for. The company offers a broad product and brand portfolio, which enables it to attract new customers and retain the existing ones. Wegmans operates a full-service website, which offers recipes and meal ideas, cooking procedures, party planning information and gift ordering services (Canadean Company Reports 2014). Such broad product offerings will enable the company to generate further revenues and increase its customer base. Their full service website also provides consumers with an interactive way to engage with the company and also have access to various information about the company, the food and other specific details. It is also good because it keeps the store interesting and functional for a range of people. Individuals are also exposed to more cultures and food types. That kind of potential exposure can interest and draw in new clients and give returning customers something new and interesting to look at when they come to their local Wegmans. Another benefit to having more products is it increases your competition among competing markets and other businesses that are looking to expand in your market area. Strength: Awards and Recognition Wegmans, among its many other awards, was recognized by the Ethisphere Institute as one of the 2011 World's Most Ethical Companies. The recognition is attributed to the implementation of best business practices and initiatives the company has taken which benefited community, industry and the company as well (Canadean Company Report 2014). The company was recognized out of all the companies in 38 industries including 43 non US companies. Apart from it, the recognition will be recognized for its values of caring, respect, high standards and 6 empowerment. In addition, the company was named by the FORTUNE magazine as the third best place to work in the best 100 hundred companies to work for (Canandean Company Report 2014). In a competitive world and economy these kinds of recognitions from established institutes will help create a competitive advantage to the company. In 2002, Wegmans received the Golden Shopping Cart Award for Best Supermarket. Wegmans opens its first full-service restaurant at the Pittsford, NY store (Wegmans 2014). Weaknesses: Product Recalls When a store has to recall products that have a negative impact on the store and the brand's image. It can also create an additional burden on the cost structure. In 2011, the company recalled several other products such as SunRidge Farms Milk Chocolate Cranberries, General Mills Fiber One 90 Calorie Chewy Bars, Simply Asia Noodle Bowl, Roasted Peanut, and others (Canadean Company Reports 2014). Then in 2012, the company had to recall several more products, including Wegmans Licorice Snaps, Somersaults (snack crackers), Pacific Sea Salt, Catswell Brand VitaKitty Chicken Breast, Cold Prepared Foods that Contain Diced White Onions, Wegmans Chunky Chicken Corn Chowder Soup, Ben & Jerry's Chocolate Nougat Crunch Ice Cream, Arm & Hammer Spinbrush Pro Clean Sonic Rechargeable Toothbrush, Safety 1st Push 'N Snap Cabinet Locks, PediaCare Infants Fever Reducer Pain Reliever, and others (Canadean Company Reports 2014). Opportunities: Industry Growth Expanding, and opening a store in Pittsburgh Pa, would benefit the company in many ways. Pittsburgh is home to many arenas, famous sports venues and they also have a thriving atmosphere that is open to virtually everyone. They also have a diverse culture and college setting that continues to bring in a new and diverse crowd. They also hold many festivals and events that draw a large and diverse crowd. Pittsburgh is also heavy in the arts, that atmosphere can attract a certain demographic and since Wegmans offer a variety of organic and healthy products this may appeal to a percentage of that crowd. Not to mention they are home to many popular athletic teams such as the Pittsburgh Steelers, and the Pittsburgh Pirates. Expanding to that location would expose more individuals making them potential clients. The variety of individuals that pass through the Pittsburgh area could have a potential effect on the company's growth. The brand would increase its chances of becoming more well known in the western coast, with that kind of brand recognition that could lead to more stores opening up leading to chain expansion. The more exposure Wegmans gains, the more they can expand and continue to bring in revenue and spread throughout the Mid-Atlantic. Also with already opening and maintaining successful stores already established along that region, Wegmans already has a positive and promising head start. 7 The restaurant industry is also a huge opportunity for Wegmans. The restaurant industry sale in 2012 is expected to be about $628 billion. It is estimated that restaurant industry sales would increase by 3.1% in 2012 and would be 4.7% of US GDP. Further, the overall impact of the restaurant industry is forecasted to exceed $2.3 trillion in 2012 (Canadean Company Report 2014). With this general increase Wegmans will be able to gain more revenue from the increase in the restaurant industry and its rapid growth. Plus with all of the other products Wegmans has to offer consumers use this as leverage when it comes to promoting their brand and individual products. Opportunities: Gain Brand Awareness Opening in a new location will also increase brand awareness. Promoting brand awareness can also be a plus to consumers because the more revenue and business the company has the lower they can keep their prices. Strong growth gives retailers an opportunity to invest in the development of their own private labels. This is also cost effective for the company because producing private label goods is generally much cheaper to produce than branded goods, due to the lack of advertising and marketing expenses. The more established Wegmans becomes as a brand, the more demanded they will be and that could create a large spike in revenue. Expansion is also effective in creating brand awareness. When a brand can gain momentum and positive feedback during expansion it is easier to continue to build that awareness and continue to feed its brand's positive image. According to industry experts, in 2011 the overall sales of private labels in supermarkets witnessed an increment of 5.1% compared to the figures in 2010, and in drug stores also private labels reported an overall sales increment of 3.8% compared to previous year. Moreover, the private label food and non-food grocery sales in the US in 2011 were $120 billion, which also witnessed substantial growth and is further, expected to follow a similar growth trajectory in coming years (Canadean Company Report 2014). Opportunities: Jobs Opening a new business also creates new jobs in the community. This could also be an opportunity to promote brand awareness and increase their target audience. Since Pittsburgh also caters to a college atmosphere there are many individuals who will need a steady job or will want to work in an environment where they know they will have room for growth. This is also beneficial because creating new jobs, in most places, is good for the economy; consumers who work there are more likely to shop there and draw in a crowd of individuals whether it be friends or family members. This could also increase word of mouth awareness and brand credibility. Creating jobs increases industry growth and helps fuel expansion and encourage more individuals to take interest in that brand and store. 8 Threats: Consumer Demands One of the biggest threats the market faces is consumer demands. Customer needs and demands change rapidly and virtually almost everyday. Consumer demands are influenced by a number of things. Consumers base their choices on what’s popular, trending, or varying personal taste. The consumer product industry is subject to rapidly changing consumer demands and preferences. Changing consumer spending patterns may impact the company’s performance. It may also be affected by consumer tastes, regional, national and local economic conditions and demographic trends. With the changing economic conditions, the customer spending patterns have also been changing (Candean Company Report 2014). Competitive Analysis: Direct Wegmans operates on a highly competitive level with other supermarkets. The key competitive factors include price, store location, merchandise assortment, quality and customer service. The company also faces competition from department stores; discount stores and mass merchandise retailers. Its key competitors include Wal-Mart Stores, Inc., Weis Markets, Inc., Bogopa Service Corp, Fairway Market , Trader Joes, and Harris Teeter Supermarkets, Inc., among others. They also compete with other restaurants such as Mediterranean delis and other ethnic restaurants as well as traditional restaurants. Local supermarkets pose the biggest threat because they already have customer loyalty and credibility. They are also a direct threat because they are competing for the same popularity as other local supermarkets and since their locations are within blocks of one another, which can also have an effect on business and promote brand recognition. Bigger grocery stores such as Wal-Mart. Krogers, Target, Aldis, Trader Joes and more pose a threat to Wegmans and their client base. Competitive Analysis: Indirect Indirect competitors could be local small businesses such as farmers markets or other cultural stores that specialize in certain ethnic foods. Other organic brand name stores are also competitors for Wegmans. Those stores pose threats mainly because of customer loyalty and already built credibility. Local stores and owners are involved deeply in the community so although people may be shopping at Wegmans they may still be getting the bulk of their products. Farmers markets are also indirect competitors. With guaranteed fresh and cheaper priced produce, not to mention a large number of consumers becoming more eco and community friendly, they will want to continue supporting their local farmers markets. 9 Consumer Insights: Target Market Many diverse individuals use and don’t use Wegmans for many reasons. The main demographic of Pittsburgh is college students, adults and an influx of various individuals passing through or coming to participate in an attraction. The target market is almost limitless. There are so many options Wegmans offers that they can appeal to a wide variety of people. They offer pharmacy services that can appeal to a range of individuals anywhere from young adults to older individuals. Marketing Environment Analysis: 10 Summary Expanding in the Pittsburgh area is a good idea because the company will be able to expose themselves to a wider audience and with Pittsburgh being a popular area that attracts a very diverse group of people, Wegmans has the opportunity to expand and gain brand recognition Executiveand expand more in the northern hemisphere. Expanding in the Pittsburgh market would be a feasible and positive opportuntiy. Citations: Wegmans food markets, inc. : Retail - company profile, SWOT & financial report. (2014). (). Basingstoke: Progressive Digital Media. Retrieved from http://search.proquest.com/docview/-?accountid=2837 11