The history, development, and growth of Safeway
Safeway is an American based company dealing in retail and distribution of drugs and food and other substances which has its headquarters at Pleasanton based in California. It is the second largest private company in America in distribution and retail of drugs and food after the Kroger Company (Earle et al 69). It is involved in distribution of non food substances especially in the western part of America. It became a private company in 1986 but later after clearing its debts it was a public company again in 1990. S. M. Skaggs discovered that farmers at his local home area were poorly served by the grocery stores and decided to intervene and open a store which would serve them properly (Earle et al 69). As a minister he convinced the president and was able to gain a loan which he used to open up a grocery store to help solve the problem facing the farmers. In 1915 he realized that his store was not profitable and sold it to his son. By 1926 the son had expanded the business and had made up to 428 grocery stores as his father had wished for. People loved these stores since the services provided were excellent and they offered a wide variety of products and goods. By 1928 the company had expanded in to over 2000 stores after the company collaborated with Merrill. In 1931 the business merged with Warren and over 3000 stores were created thus making the business profitable (Earle et al 69). By 1955 the business had developed under skills offered by Warren. He introduced policies that enabled success of the entire company though the chairman of the company was still Skaggs. Warren came up with the policy of consumers picking goods on their own placed on different shelves. Warrens and Skaggs skills and policies enabled the company expand and overcome challenges.
After the world war two the company was able to develop and create more new and bigger stores which replaced the old ones. Safeway Company despite the Korean War was able to expand since prices were being rationed (Earle et al 69). Consumers gained trust and were attracted to shop in Safeway since they would get everything under one roof. Safeway provided wide range of products and fresh vegetables and fruits. In 1954 the company provided its employees with medical cover services which enable it become more popular among many people. By 1955 Warren retired as the president of the company but was succeed by Milton who was a member of board and management. Later in 1957 Magowan took over the presidency of the entire company. The company’s sales had increased in huge amounts. Under leadership of Magowan the company continued increasing its sales up to over ten billion dollars (Earle et al 69). This was a great move for the company and enhanced its development and expansion. In 1959 the company under leadership of Magowan had expanded and moved in different states. In 1960s the company started expanding internationally thus becoming global (Earle et al 69). In 1962 the company opened over eleven stores in England. In 1964 the company expanded its stores to Germany. It became an international company under leadership of Magowan who retired in 1998 (Earle et al 69). Through his leadership the company became global and overcame many challenges especially the great recession. It gained more profits and attracted most customers since services provided and products were of good quality and quantity. The supermarket has remained one of the customer’s choices being the second largest retailer of food and drugs in America.
The identification of Safeway’s internal strengths and weaknesses
In order to identify the strengths and weaknesses of Safeway Company SWOT analysis is used. The analysis provides a brief description of the situation the company in terms of profitability and loses (Safeway Inc. SWOT Analysis 8). The company’s strength is that it is numbered 52 out of 1000 stores in the fortune list. It has strong market strategies and positions in its way of generating revenues and making sales. It was numbered eleven in terms of sales distribution where it enjoys many different brands in the market. It provides a wide range of products that attract consumers since they provide them at lower prices (Safeway Inc. SWOT Analysis 8). Marketing mix is a strategy used by Safeway to promote its products. The marketing mix is inclusive of various strengths which the company uses and which include:
High quality Products
These are the goods offered by the manufacturers to the consumers in exchange of money. Products as part of the mixing in the market involves a number of factors which include quality, design of the products, features, packaging of the product, the brand name and the physical appearance of the product.
Affordable Prices
This is the amount of money various products and services amount to. The price is determined by the manufacturers and is affected by a number of factors which include the list price, available discounts and allowances, the time of payment and any credit services if necessary. Safeway Company ensures that prices are favorable and affordable to its customers. This attracts new customers and help in maintenance of other regular customers (Safeway Inc. SWOT Analysis 8).
Placement
This is the method followed so as to distribute products until they reach the targeted markets. Placement as one of the market mix consists of transport, medium of distribution, exposure and the destination required. Safeway ensures that its products are distributed in the right time in order to enable consumers get fresh products in time (Why Safeway (SWY) Is Gaining Today n.d).
Promotion
This is the process of informing and persuading customers to buy the available products. It is also one way of reminding customers on already existing goods and new goods. Promotion as one way of marketing mix includes adverts required, sales marketing and promotion. This is strength since it provides profitability and customer retention in the company (Wheelen et all 250). The company ensures it has various locations based in America and Canada which promotes expansion and profits. It provides promotions to its consumers in all its stores at various locations.
Internal weaknesses of the company are those challenges which hinder the company from making more profits. They include:
Unsustainable debts
The company faces huge debts that deter it from developing and growing rapidly. The debts affect the company’s financial situation both at present and in future (Safeway Inc. SWOT Analysis 8). The debts will affect the company success and economic condition subjecting it to losses and lack of continued growth.
Inflexibility to changes
The company due to its large size is not able to adapt to new changes. Bringing a change turns out to be expensive as a result of the size of the company.
Provision of poor services
The company has many stores making it difficult for proper supervision and management. Some stores may provide low quality services to consumers and go unnoticed since stores are many. The stores hinder proper management and provision of high quality goods and services (Safeway Inc. SWOT Analysis 6).
Employees based on unions
Employees employed in Safeway are unionized such that strikes and go slows are rampant in the company (Safeway Inc. SWOT Analysis 6). This results to lose since employees are key shareholders in all companies.
The kind of corporate-level strategy that the company is pursuing
Safeway Company uses the corporate strategy in carrying out its business. The corporate strategy used is strategic planning which ensures managers are able to plan for present and future success of the company (Robertson et al 123). Managers are able to use this strategy since it promotes profits in the company. Implementation of this strategy requires qualified and skilled staff which the company employees. A corporate strategy initiates use of strategic planning which promotes future success. Developing this strategic plan is a process which should be followed if success is to be achieved. A strategic plan is important since it outlines a company mission and vision and ways of achieving the vision through following the mission. The strategic plan will aim at improving the current situation in the company. It will lead to expansion of the company to other countries in order to make more profits (Shurtleff et al 965). Corporate strategy comes up with ways of outshining the competitors in the medical industry. The corporate strategy enables the company to determine its current business condition and look for ways of improving the business. The corporate strategy is responsible for prices and good relationship with customers which ensures success. Top managers in the company are skilled people who work towards success of the company drawing their effort from their CEO. The corporate governance strategies are useful in ensuring good relationship between stockholders and the managers. Managers use their skills in ensuring success is achieved and respect is maintained among all staffs in the company (Zolkos 48). Top managers work at ensuring long term success and sustainable growth and development. Top managers are keen to observe the environmental laws as a way of following government policies.
The company embarked on using modern technology in provision of retail services and information to the people globally. Online services are provided via the internet which is a technological strategy employed by the company currently (Robertson et al 123). Provision of vital information and customer care services are provided fast through use of the internet. This has however been challenging since information can be hacked by criminals. Online services are expensive to maintain and can lead to losses if criminals interfere with them. This is a major technological development which the company is using to deliver useful information to its customers globally (Robertson et al 123). Through use of this corporate strategy managers are able to come up with strategies which ensure that the company outshines its competitors. Managers are able to know the problems facing the company and come up with solutions on how to solve the problems. The objectives and aims the company should be achieved by managers applying their management skills. Managers ensure that the plans are well implemented and that the set goals and objectives are maintained. This makes the company remain strategically fit thus ensuring success in that company. The company uses a matrix structure in its management. It uses its control systems to provide quality services to its customers. The structure of the company supports business strategies and models in the company under leadership of the top management. The company respects its employees, customers and other stakeholders. It motivates its employees as well as providing affordable services to the customers (Robertson et al 123). The company also motivates its employees as one way of promoting success. Through use of strategic planning as a corporate strategy the company is able to utilize its resources in order to ensure it remains successful.
Works Cited
"Safeway Inc. SWOT Analysis." Safeway, Inc. SWOT Analysis (2013): 1-10. Business Source Complete. Web. 6 July 2014.
"Why Safeway (SWY) Is Gaining Today." TheStreet 2014: Business Insights: Essentials. Web. 6 July 2014.
Earle, Mary D, and R L. Earle. Case Studies in Food Product Development. Boca Raton: CRC Press, 2008. Print.69
Robertson, Duncan A, and Adrián A. Caldart. The Dynamics of Strategy: Mastering Strategic Landscapes of the Firm. Oxford: Oxford University Press, 2009. Print.
Shurtleff, William, and Akiko Aoyagi. History of Tofu and Tofu Products (965 Ce to 2013): Extensively Annotated Bibliography and Sourcebook. Lafayette, CA: Soyinfo Center, 2013. Internet resource.
Wheelen, Thomas L, and J D. Hunger. Strategic Management and Business Policy: Toward Global Sustainability. Upper Saddle River, N.J: Pearson Prentice Hall, 2012. Print.
Zolkos, Rodd. "Transforming Safeway's Safety Culture Saves Company $100 Million." Business Insurance 48.9 (2014): 0022. Business Source Complete. Web. 6 July 2014.
