Running head: STRATEGIC CHOICE AND EVALUATION

Strategic Choice and Evaluation

Tresa Jellison
STR/581
October 4, 2015
Professor Vellore Sunder

STRATEGIC CHOICE AND EVALUATION

Strategic Choice and Evaluation

Kroger is known as one of the largest supermarket chains in the U.S., Kroger owners and
employees strive to meet the nutritional needs of millions of individuals day to day. But by doing
this Kroger also faces competition from other sides of the food chain. In trying to become the
dominant grocer Kroger has decided to merge with Whole Foods. Doing this Kroger has the
ability to beat the treasure seekers of other companies such as Sams, Costco, and Wal-Mart.
Recently Costco gained the name and passed Kroger as being known as the countrys secondlargest retailer store along with Wal-Mart, the other retail countrys major retail chain.
As merchants know merging two companies can be quite unpredictable. Strategic
choices to build a brand around Kroger and Whole Foods merger will steady grow. In the
beginning, the merger will take some getting use to so Kroger will have to make sure its
marketing strategy to merge will be solid and will create revenue. Meaning the prices would be
just above the lowest prices. To achieve this image, Kroger will offer friendly service, fresh
goods, and generous prices. as well was bright and assertive atmosphere, unlike other stores of
the same market industry, Kroger/Whole Foods will bring your grocery shopping needs under
one roof in a single location. When the generic strategy is designated Kroger will need to
consider how to implement its merger to ensure it connects with its long term goals. In the next
paragraphs it defines how the Kroger/whole Foods merger will be identified and how its best
value, and how its chosen strategy will ensure how the company can accomplish its long term
goals.
Identify the Best Value Discipline
Successful companies anchor on to one of the three value disciplines to pursue;
operational excellence, product leadership, and customer intimacy (Horwath, 2006).

STRATEGIC CHOICE AND EVALUATION

Operational excellence focuses on creating the best total cost for customers, offering
customers competitive pricing and delivering this value in an efficient manner (Horwath, 2006).
Customer intimacy includes a strategy that accommodates the customer tailored requests to
ensure individual customer satisfaction and product leadership strives to provide a continuous
stream of state of the art products and services (Pearce & Robinson, 2011).
Krogers foundation is built on more than just pricing; it embraces quality, style, and
satisfaction. This strategy has been consistently applied since the launch of the stores in 1883. To
achieve an image of excellence, it offers fresh produce and Grade A foods as well as a nice clean
environment that is bright and friendly, unlike other grocery stores. Krogers strategy
incorporates the best value for customers satisfaction and with the merger it will bring customer
satisfaction to the organic more healthy aspect of the facility. Exceptional advertising will be
needed to get shoppers into the store. Once the customer is in the store it is up to the customer to
make their shopping experience just that an experience.
Krogers strategy descends upon leading the grocery, organic industry in price, marketing
and accessibility by following a more efficient operations. Operational excellence is the best
value discipline for Kroger/Whole Foods because they are working to lessen costs through
reduced overhead, eliminating intermediate production steps, reducing transaction costs, and
optimizing business processes across functional and organizational boundaries (Pearce &
Robinson, 2011). Operational excellence is the driving force behind Kroger/Whole Foods
approach to increasing customer value and satisfaction.
Identification of a generic strategy
Generic strategy is fulfilling a long term or impressive strategy that is based on a core
idea about how the two stores can combine and become the best in the grocery, organic, whole

STRATEGIC CHOICE AND EVALUATION

food market. There are three generic strategies: striving for overall low-cost leadership in the
industry; striving to create and market unique products for varied customer groups through
differentiation; striving to have special appeal to one or more groups of consumer or industrial
buyers, focusing on their cost or differentiation concerns. (Pearce & Robinson, 2011).
Kroger/Whole Foods will incorporate the strategies to encourage customer satisfaction
and growth. First, Kroger/Whole Foods will announced its merger and its growth strategy of
increasing store counts and product satisfaction. Secondly, Kroger/ Whole Foods will create
unique organic products and exceptional customer services. With this in place it will help
Kroger/Whole Foods to stand out from its competitors. Thirdly, as part of the general strategy,
through marketing and promotion Kroger/Whole Foods will identify the need in the market
products through diversity. The final part to the generic strategy which Kroger/Whole Food is
strategizing the opening of stores in the international markets, such as France and Italy in the
near Future. The opening of stores outside the United States will definitely boost the company's
top and bottom lines and improve its cash flow generation capability. (Seeking Alpha, 2011).
Kroger/Whole Foods Grand Strategy
Kroger must look at its long-term goals and the interests of its stakeholders while
articulating a grand strategy that will affect their weekly, monthly and yearly planning and dialog
of the company. Keeping in mind and paying attention to the increase revenue that the company
will be expecting to see over years as well as the new growth strategy.
Once a merger and strategy is in place and their upcoming aims and targets are clear, all
strategies for the merger will be established with their purposes. Sales will be recognized keeping
in mind the merger objectives and accompanying income requirements. Budgeting and costs in
the organization with the merger plan and the marketing campaigns. Gaining of knowledge and

STRATEGIC CHOICE AND EVALUATION

supplemental information technology and information will become accessible.

Conclusion
Kroger has been in business for 132 years and Whole Foods has been in business for 35
years and for the two companies to merge together and sustain the change they will go through
will require several strategy shifts. Kroger/Whole Foods new operative quality plan will be the
driving force that will allow the company to focus on increasing customer value, product
satisfaction, product and overall company working costs. This will be achieved by striving for
overall leadership in the market industry.

STRATEGIC CHOICE AND EVALUATION

References:

Horwath, R (2006). Strategy & Value: The Customers Treasure Chest Retrieved from
www.strategyskills.com
Kroger. (2015). Retrieved from http://www.thekrogerco.com/about-kroger/history-of-kroger
Pearce, J. A., II, Robinson, R. B. (2011). Strategic management: Formulation, implementation,
and control (12th ed.). Boston, MA: McGraw-Hill/Irwin.
Seeking Alpha (2011). Issues $1.0B in Corporate Bonds to Support Growth Strategy.
Retrieved from www.seekingalpha.com/arcticle/279620 -issues-1-0b-in-corporatebonds-to-support-growth-strategy