The giant and the leader in retail industry - KROGER COMPANY (Essay Sample)

Kroger Company Name Institution Abstract Kroger Company is a giant in the retail industry, having grown over the years to establish itself as a leader in the industry. The structures used by the company helps it to maintain and expand its customer base. Kroger is a family based company which enjoys operating in an economy of scale, which has driven the retail business to venture in manufacturing, ensuring it enjoys proper operations reaping decent revenue all year round. The company can maintain and improve its market presence through aggressive online marketing and push more of their manufactured products to be sold in other retail outlets since it will significantly enhance their revenue stream. History and Size of the Organization Kroger Company is an American retail business based in Cincinnati, Ohio, and was founded in the year 1883 by Bernard Kroger. Kroger had a humble beginning of investing all his funds to start a grocery store valued at $372, through his passion, dedication, and innovativeness he was able to solidify his place in the market gaining notice from the community. His innovativeness in putting butcher and a bakery in the store gave him an edge over all the other retail stores (Hamstra, 2013). Kroger Company serves millions of customers in over 35 states in the United States held firmly by its critical pillars of honesty, integrity, respect, diversity, safety, and inclusion. The innovativeness of the business is present in the different styles used in each of the retail chain stores (Parnell, 2013). The retail industry is a fast-paced market which has attracted some big players such as Costco, Target, and Wal-Mart. Kroger is a unique company which can perform well during any season, shielding itself from the turmoil’s in the economy, earning the title of the second largest retailer in the fiscal year of 2016, and largest chain based on revenue in the same year. Strategic ploys employed by the company have helped it have a presence either directly through its stores, or indirectly through its subsidiaries, with a total of 2,778 supermarkets and multi-department stores nationally (Sander & Bobo, 2016; Kroger Plans Megastores, 2006). Department stores and Supermarkets spread across the nation vary in size, but all take up large spacing such as a warehouse to ensure all the commodities on sale have an appropriate shelve slot. Outstanding the level of work that goes on in the various branches Kroger has employed 443,000 staff member with 68% of them being men while the remaining 32% ladies. A wide variety of brands are sold by the retail giant, ranging from essential household goods, staple products, and many other non-food items (Webber, 2016). Organisational Structure Efficiency, productivity, and profitability of a business are dependent on the effectiveness of the management structure in place. Kroger Company has a decentralized operational structure since every department store operates independently, but overall financial records of all department stores and supermarkets are submitted to senior management and the board for review. A flat hierarchy is in effect in the Kroger Company since branch managers operate independently without any centralized structures in place. Quarterly reports are forward to the board of directors who are the representatives of other shareholders to ensure the company is meeting stakeholder expectations regarding revenue (Kurtz and Boone, 2010). Notwithstanding the decentralized structure in place, the board of directors takes measures in safeguarding their interests by way of appointing a chief executive officer (CEO) to oversee day to day progress of the business. Subsequently, the CEO delegates different duties to more of the senior managers who head various departments to keep a close eye on the day to day operations. Although the branch managers are at liberty to implement strategies that they deem to have a positive effect on the business, the senior management helps in maintaining checks and balances (Kurtz and Boone, 2010). Various divisions exist in the company to effect smooth operations. Merchandising department takes up the responsibility of liaising with manufacturers to acquire required goods at favorable prices. The retail unit takes up the duty of assessing overall customer needs, guaranteeing client satisfaction. Secretary and Legal division address all legal matters, while the HR and labor division ensures the necessary staff members are hired, and staff needs are addressed. Information division takes up the responsibility of relaying information to the public on products found company stores, while the finance division maintains all company business accounting records (Kurtz and Boone, 2010). Organizational Chart Ownership Kroger Company began as a family based company; nonetheless, after some years of successful operations, the company changed to a public company through acquiring a trading certificate and was subsequently listed on the stock exchange. Moreover, the shareholding of the company is extensive requiring a board of directors to safeguard the interests of shareholders. Shareholding of the company is based on the number of shares an individual or entity has acquired (The Kroger Co., 2016). The founder of the Company Kroger began from a very humble beginning to build the retail giant seen today. Through hard work and creativity Kroger was able to gain customer loyalty, and from the massive sales, he was able to save enough money to expand the business. As the market grew, listing company shares on the stoke exchange helped to raise additional capital used in expanding across different states. Other credit facilities have been acquired from various financial institutions to ensure smooth operations (The Kroger Co., 2016). The Kroger Manufacturing company mission and vision are linked to their staff, investing handsomely in its workforce since they believe that it is only through dedicated and capable employees that they can be able to deliver superior and quality services. The company mission statement is to be a leader in distributing and merchandising of food, health, pharmacy and personal care items, seasonal merchandise, and related goods and services (The Kroger Co., 2016). The cyclical theory shows how the business has evolved over the years to reach its current position. All changes have been accompanied with specific attributes that have impacted the efficiency of the company. As the business has stretched-out in the different states, department managers have traded up to more expansive stores. Cyclical changes surrounded by proper management and maximizing on opportunities safeguards the future of Kroger Company (Amason, 2011). Organisational Structures Every business whether large or small is affected by internal and external variables and through understanding each of the variables a business can mitigate any undesirable effects. Internal variables can be highlighted using SWOT analysis to establish the strengths, weaknesses, opportunities, and threats in the company. An external variable can be assessed using PEST analysis to develop the political, economic, social and technological factors that might affect company operations. Being in a profitable industry attracts fierce competition and Kroger Company seats in a lucrative business that competitors such as Wal-Mart, Sears, and Target are fighting to acquire. Opportunities which are yet to be tapped by the firm to meet the growing demand for organic products in the market, and increasing the volume of online sales (Sathi, 2016). Threats’ currently being faced is the growth in competition from the different players in the market, and the ever-growing challenge of wages paid to staff since the government is consistently increasing the minimum wage. The level customer loyalty measures the strength of the company enjoyed, how it can utilize the size of the economy and the significant presence it has in US and global markets. Currently, the company faces threats from the entry of new enterprises; other cheaper products can substitute its manufactured products in the market. The level of competition in the market has pressed the business to employ aggressive tactics, to ensure it continues to enjoy ...