To gain an understanding of a SWOT analysis, this article will provide a SWOT analysis of Kroger Co. The swot analysis is a useful process for businesses to gain an understanding of their market place. By reviewing the business strengths, weaknesses, opportunities and threats, a company can respond to changing market conditions.
SWOT Analysis of Kroger Co
Kroger Co. was founded over 125 years ago and is one of the largest retailers in America with over $70 billion in sales for 2008. Kroger operates under various banners, including QuikStop, Fred Meyer, Dillon’s and Kroger Personal Finance. The company has over 323,000 employees. As of early 2008, Kroger Co. operated 2,486 supermarkets and multi-department stores.
Strengths: Kroger Co. has a significant market share in 44 markets covering 31 states. This geographical diversity helps the business sustain its competitive strengths. With a valuable private label business, innovative formats and customer service focus, the company can compete against the likes of Wal-Mart super-centers.
Weaknesses: Kroger Co. operates 42 manufacturing plants including dairies, bakeries, beverage plants, and meat plants. Food manufacturing represents a risk of food contamination. A serious contamination can damage the company's brand and hurt corporate profits.
Opportunities: The expansion of the company in 2007 into the finance market provides a strong future opportunity. The Kroger Personal Finance brand provides convenience to grocery shoppers and can potentially mimic the success of Canada's grocery banking, President's Choice Financial.
Threats: A slowing economy with higher levels of inflation affecting the price of food and greater fuel costs impacting transportation cost, the Kroger Co. can have lower profit margins. Cost conscious consumers will shift their buying habits to less high-end foods and gourmet items (with greater margins) to lower margin food items.
This is the general format of a SWOT analysis. A full scale SWOT analysis would uncover 5 or 10 points in each category and fully explore the business in-depth.