Retailer - Kroger Research Paper Example | Topics and Well Written Essays - 2000 words

Retailer - Kroger - Research Paper Example The economic stress has affected the business dues to the current recession. However, it has maintained its position despite the economic downturn because of its marketing strategies and excellent customer services. Wal-Mart is the greatest competitor affecting the company. It is known for its reduced prices, and therefore it can to drop the grocery prices by approximately 20% because it can be profitable with small margins due to economies of scale (Plunkett 141). Kroger may suffer increased price competition. However, Kroger offers products that balances its mix and does not go into direct competition with Wal-Mart. It has focused on developing its domestic markets. The customers have a high power in grocery industries because of their regular visits. In addition, switching cost is very low, and they can find similar products from other firms within the industry. In other words, customers are very keen on changes in prices and new products. Moreover, Kroger is facing legal issues, which may ruin the company image it the case was ruled against the company. Increase in operation costs can result in more debt because a high percentage was used in restructuring stores. The current economic recession has restricted the industry to refinance debt. Kroger has continued to enhance new technology in order to meet the customers need. Currently, the company has two data centers that conduct research to ensure the customers have quality and safe products. Also, the digital platform ensures that the company communicates with its clients. Kroger has over 2500 stores located in 32 states under five retail format namely supermarkets, warehouse stores, convenience stores, and jewelry stores. However, supermarkets account for the largest percentage. These supermarkets further categorized in food and drug stores, multi-department stores, and warehouse stores. Due to its wide variety of stores, it caters a broad customer base. Kroger has also