Competition Issue in Kroger Company - Essay Sample

Published: 2021-08-16
925 words
4 pages
8 min to read
Boston College
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I chose Kroger Company because I have been their loyal customer for decades. It is one of the best retailing firms in the world. I also picked the company because I was interested in the retailing industry. The business has been doing well. However, recent news shows that the company has a problem. Being a loyal customer, I wanted to know what is precisely affecting one of my favorite companies in the world. Therefore, I chose this firm based on the knowledge I had on it, being a loyal customer, and it being one of the best retailing companies in the country.

Kroger is an American firm that was founded in 1983 by Bernard Kroger in Cincinnati, Ohio. The company reported revenue of 115.34 billion in the fiscal year 2016, and it is considered the second largest after Wal-Mart. The firm operates directly or through subsidiaries. The mission of the company is being a leader in merchandising and distribution of personal care, food, health, and related products and services (Sims 28). The headquarters of the company is in downtown Cincinnati. The values of the company include honesty, integrity, respect, diversity, safety, and inclusion. In the website of the firm, the purpose of the enterprise is that every day they open new doors and welcome millions of hungry individuals. However, they are not hungry for food; they are hungry for something, which makes lives easier, healthier, a bit lighter, and brighter. Additionally, they are hungry to do well, feel good, and move from anxiety to inspiration. The employees of the firm are usually treated relatively and represented through collective bargaining agreements, and most are represented by the United Food and Commercial Workers (UFCW) union (Sims 28). Furthermore, the corporation has about 2800 stores in thirty-five states. The company has oligopoly type of market structure.

The issue the company is facing is high competition. The high competition made the firm to have a reduction in the store sales which made it lower the profit forecast by 10% (Vena 1). Furthermore, the stock of the corporation reduced by 19% on its performance. The Amazon firm also announced that it would purchase Wholesale Foods Market. The news affected most of the leading companies in the grocery industry, and this made Kroger lose most (Vena 1). Amazon has also disrupted large part of the retail sector, and it has also been testing the grocery industry through Amazon Pantry and Amazon Fresh. The new introductions by Amazon have made Kroger to face stiff competition in the retailing industry. However, the Chief Financial Offer said that the competition the firm is experiencing is part of the business.

Some of the solutions that the company can put in place to help it efficiently compete are by reducing expenses by not advertising. The company should take a look at its profit and loss account, or it should internalize all the costs to know what should be reduced or eliminated (Fletcher 191). Honesty is an essential virtue in business. Therefore, the company should know where it can cut back. Another vital solution to the issue affecting the company is being creative. In most cases, the retailers in the same industry usually use the same marketing methods when reaching out to the customers. Therefore, Kroger should be creative and utilize the unconventional marketing methods to distinguish its business from the other competitors. A unique marketing campaign will attract more attention thus increasing the sales. The company should also look for the untapped market which the competitors are overlooking like teens, moms, college students, and retirees this strategy will give the company the chance of discovering a niche market that it can dominate with no competition.

Providing an outstanding customer service is also a solution to the issue affecting Kroger (Fletcher 192). By the firm going the extra mile in offering excellent service makes shopping in a store a memorable experience which will further attract the customers. Most individuals enjoy shopping in places where they feel that the owner cares about their needs excellent customer service is essential for the company to help it maintain its sales.

In case the company does not take these solutions, them the sakes of the firm will continue reducing. A reduction in the net sales will further reduce the net profit of the company. Furthermore, if the customers are not offered with quality services, then they will purchase goods from the competitors. The fixed costs of the firm may also change if the company does not implement the above solutions. Additionally, a reduction in the sales may make the company have losses. When the firm has a reduced market share, then it will lower the demand of the consumer, and this may cause the business cycle to reduce the operational setup. This reduction may result in closing, selling assets, or even laying off the employees.

After addressing the problem, the reader will learn the different ways of curbing or reducing the issue of stiff competition in the retailing industry. The reason is that the companies in the retailing sector to use the same marketing strategy. Thus, uniqueness and being creative will make a firm to get customers. The reader will also learn about the importance of providing quality services to the customers.

Current state

After implementing the solutions

Works Cited

Fletcher, Frank. Solutions: Business Problem Solving. Routledge, 2016.Sims, Ronald R. Ethics, and Corporate Social Responsibility: Why Giants Fall. Westport, Conn. [u.a.: Praeger, 2003. Print.

Vena, Danny. "Kroger Has Bigger Problems -- Amazon Is Buying Whole Foods." The Motley Fool, 2017,

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