Kroger's Customer-centric Business Model: The Competitive Strategies



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Code :BSM0038

Year :
2006

Industry : Retailing

Region : USA

Teaching Note:Available

Structured Assignment :Not Available

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Abstract: For many years, the third-largest supermarket group in the US, Kroger, has been competing to gain market share from world's No.1 retailer, Wal-Mart. Following Wal-Mart's price-led business model, Kroger tried to attract customers and increase its sales. However, it failed as its cost reduction could not match its price reduction. Realising that it was difficult to compete on the basis of price alone, in 2002, along with Dunnhumby (a specialised provider of database management and analytical services), Kroger formulated a customer-centric strategy for itself. According to this, customer data is analysed to get a deeper understanding of their purchasing behaviour. The retailer also implemented a 'customer first' strategy to deliver higher value to its customers coupled with an enhanced shopping experience.

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Pedagogical Objectives:

  • To understand the need for Kroger's transition in its business model from being price-led to being customer-centric
  • To analyse whether such transition would help Kroger or go against it, as by wavering between price-led and customer-led business models, Kroger might lose its strategic focus

    Keywords : Customer relationship management; Relevance marketing; 80:20 rule, the Pareto Principle; Top retailers in the US; Business model of leading retailers; Cost leadership strategy; Competitive Strategies Case Study; Competition in the retail industry; Wal-Mart; Safeway, Tesco, Kmart; Challenges faced by retailers; Customer behaviour

    Contents :
    Kroger: The US Retail Chain
    Kroger: Competing through its Customer Centric Business Model


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