Kroger Strategic Analysis Essay

4321 Words Nov 13th, 2015 18 Pages
Strategic Analysis
Kroger

Executive Summary
This strategic analysis of The Kroger Company will take a look at the changing trends of grocery retailers, profitability and strategic position. Included is a PESTEL analysis and Porter’s
Five Forces model for a closer look at Kroger and the industry. Competition is a big threat and since Rodney McMullen became CEO of The Kroger Company in January 2014 the company has rapidly gained market share and is currently second only to Wal-Mart (United States
Department of Agriculture, 2014). With recent strategic acquisitions Kroger is better positioned to sustain their level of growth. There are several problem areas that Kroger will need to stay on top of and plan for how to combat those areas. We
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The PESTEL analysis will show the external forces and how they are or could be impacting Kroger. This will give a broader understanding of the environment surrounding this industry and what potential opportunities and threats can affect the company. Then we will use Porter’s Five Forces Model to allow for a closer look of the industry. This analysis will provide a more in depth look at profitability and strategic position.

PESTEL ANALYSIS
Political
While there are not any current political actions happening that directly affect the company, Kroger remains very transparent in what it does in the political arena. They participate in a number of trade associations and make regular contributions to political offices and campaigns. While it is not required, the company provides a list on their website of the amounts that they contributed each year.
Economic

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Much like any retail establishment, the economy has a direct impact on sales in grocery stores. The textbook lists the five macroeconomic factors that should be considered. While each of these factors are considerations when determining how the economy plays a role, the ability of a company to overcome and adjust to fluctuations are just as important.
The uniqueness of the grocery store industry is that an economic downturn could either increase or decrease the sales, dependent on multiple factors.

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