Discussion Topic: Spartan Stores, Inc. SWOT Analysis

Strengths

• The organization exhibits an effective product line that is distributed through retail and distribution business segments (SWOT Analysis, 2012). In Michigan markets where the organization operates, it is recorded that these two business segments hold either first or second position with regard to market share.
• Spartan Stores Inc. has a unique product market positioning that satisfies the demands of the target market (SWOT Analysis, 2012). Products offered by both retail and distribution segments are divided into national and private brands that offer different ingredients with regard to the preferences of the customers targeted.

Weaknesses   

• Stiff competition is one of the major weaknesses endured by Spartan Stores Inc (SWOT Analysis, 2012). For example in Michigan and Indiana which are the major operation areas for this company, there is growing competition from retailing and distribution organizations such as Wal-Mart, Meijer and K-Mart among others.

Opportunities

• Effective operation and economies of scale

Rapid growth that Spartan Stores Inc. has been experiencing since the foundation date has contributed significantly to its economies of scale (SWOT Analysis, 2012). The rapid growth has been promoted by the effective operation of the company through the two business segments that it uses to offer its products to the potential customers.

• Increasing demand on private labeled brands

Since Spartan Stores Inc. offers both national and private labeled brands, increase in demand for private brands by the customers is one of the significant opportunities for the organization (SWOT Analysis, 2012). One of the reasons why there is a considerable increase in private label brands is that they are relatively cheaper than national products.

• Increasing health concerns among the customers

It is factual that healthy eating is becoming one of the major concerns by the contemporary society (SWOT Analysis, 2012). As a result, the increasing concern on health is likely to increase the demand for grocery which is one of the major products offered by Spartan Stores Inc.

Threats

1. Decreasing purchasing habit by the customers

Citing from the economic crisis that U.S economy endured back in 2008, the purchasing habit of the consumers across the country was affected significantly (SWOT Analysis, 2012). This can be cited from the fact that the employment rate remained low where consumption expenditure grew with a slower pace at 1.7% after the economic recession.  

2. Expensive healthcare benefits for the employees

It is factual that most of the companies in the contemporary business market have been affected significantly by the increasing healthcare benefit for their employees (SWOT Analysis, 2012). In 2011, the benefits increased by 3.5% which placed a heavy burden to employers. Thus, Spartan Stores Inc. is one of the companies that fall under the group of organizations affected by increasing healthcare benefits.

3. Expensive labor costs

According to the U.S department of labor, the minimum wage rate accrued up to $7.25 per hour in 2010 which continues to increase up to date reaching up to $7.40 per hour (SWOT Analysis, 2012). As a result, this has affected the overall profit margin of the companies.      

 Reference

SWOT Analysis. (2012). Spartan Stores, Inc. SWOT Analysis, 1-9. Retrieved from Business Source Complete database.