Running Header: KROGER

Kroger

Table of Contents

Introduction3

Discussion3

Company Description3

Type of Organizational Structure4

Current Strategies of Kroger5

Five Forces of Kroger7

Agency Problem10

Compensation11

Conclusion12

References13

Kroger

Introduction

The Kroger Co. is one of the leading grocery retail chains in the US. In 2011, the company was ranked 25th on the Fortune 500 list of America's largest corporations, and 76th on the Global 500 list of world's largest corporations. Kroger is among the top three market share holders in 38 of the 42 major markets in which it operates. Kroger's size provides significant pricing power with food producers, giving the company economies of scale over smaller supermarket operators. This paper aims to analyze Kroger Company. It will analyze Kroger's Organizational structure, current strategies, and agency problem and compensation package.

Discussion

Company Description

The Kroger Company is one of the leading companies in the grocery sector of the nation. It is the nation's leading pure grocery chain. As of now, it operates about 3620 stores, which includes 2435 supermarkets and multidepartment stores, under two dozen banners, in almost 30 states. It also runs 775 convenience stores under the brand names such as Quik Stop and Kwik Shop. Its subsidiary Fred Meyer Stores operates about 125 supercenters which offer wide range of products such as groceries, jewelry, merchandise, in the western part of US. It employs 334000 employees and is currently rated 23 in Fortune 500 and 82 in the Global 500. (Kroger Company Profile)

The company's supermarket is operating under combo stores of both food and drug stores; multidepartment stores; price impact warehouses and etc. The combo store offers wide range of products such as natural and organic food, general merchandise, pharmacies, and perishables. The multidepartment stores offer high range products such as apparels, fashion livings, electronic gadgets, automotives, fine jewelry and toys. KR was founded by the famous Bernard Kroger in 1883 in Cincinnati, Ohio. KR's technique of marketing was different and it had pioneered its first supermarket which was surrounded by parking lots on all of its four sides in the 1930s. By 1925, KR had around 2500 grocery stores. By 1930's it had evolved its market by converting its chain store system into a supermarket system. This led to the massive growth of the company. By then, it has been acquiring companies like Dillon, King Soopers, Fry's, City Market, Baker's and convenience stores like Kwik Shop. The founder of Dillon Company is now the CEO of Kroger. The mission of KR is to be 'a leader in the distribution and merchandising of food, pharmacy, health and personal care items, seasonal merchandise, and related products and services.' KR also stresses six core values. These are: honesty, integrity, respect for others, diversity, safety, and inclusion. (Ian McClintock, pp.4)

Kroger is among the top three market share holders in 38 of the 42 major markets in which it operates. Kroger's size provides significant pricing power with food producers, giving the company economies of scale over smaller supermarket operators. However, the company's revenues may be adversely affected due to the low confidence levels among consumers in the US, which is ...