Kroger

Opportunities

•Modified stress on the Brands with Private Label - The Company has kept developing its own brands as a tactical benefit. They have an objective of minimizing their dependency on the local brands, and they have changed the magnitude of their promotions of their products, which has approximately fourteen thousand brands. In the 4rth quarter of the year 2009, the sales from the individual brands of Kroger answered for about twenty seven percent of the total sales turnover. One of the famous brands of Kroger, namely “Private Selection”, had a sales turnover of more than one billion dollars in the year 2009. These brands have enabled the customers to save a considerable amount of money during the current economic recession. (Morgan, 163-176)

•Plans for Expansion: The Kroger Corporation has a plan to implement a plan for expansion, which would entail the relocations of different stores of Kroger and their remodeling, and openings of new stores throughout. This plan would help Kroger to improve the in-store productivity in their retail stores, help them in penetrating unexplored markets, and catch new customers. This sequentially will enable Kroger to maximize its customer base. They have managed to increase their capital expenditure from around one billion dollars in the year 2007 to approximately two billion dollars in the year 2009. They are setting themselves up to squander approximately two billion dollars during the year 2010. The management of Kroger is hoping that they would be able to maximize the operational functionality and minimize the costs associated with operations. (Lumpkin, 135-172)

•In-Store Health plan - The management of Kroger is straining to serve their customers in a better way by rendering walk-in medical clinics & health aid for their consumers in their stores. They have partnered with The Little Clinic Kroger, and this partnership has enabled them to provide the services of certified nurse's plus specialized general practitioners to make a diagnosis, deal with the problem, and compose prescriptions for general sicknesses in addition to the small wounds. The management of Kroger intends to enforce this program all through their outlets and by applying this strategy; they hope to draw rewards of additional revenues. (Miller, 770-791)

Threats

•High Debt Burden - Kroger might have to pay a substantial amount of cash flow to pay the high amount of debt it owns. The debt has come from the large portion of spending on restructuring of the organization and new store opening projects. The current economic conditions have curbed further willingness to refinance the debt; therefore, this reluctance may hamper future opportunities of growth for the organization. (Murphy, 15-23)

•Dismal Economic Projections - The falling economy is continuously affecting the consumer expenditure pattern. A 60.5 percent drop was recorded in the 1st quarter of 2009 in the United States CCI (Consumer Confidence Index). In 2008 CCI was 65 and in 2009 it dropped to 29. (Lyles, 877-903)Although the Conference Board Employment indicates that the job market is recovering, but the recovery will be slow and will continue to affect expenditure pattern of Kroger's ...