Mrs. D’Maggio owns two sets of supermarkets with the same demography, under the name Dmetto. However one of the supermarkets Dmetto Main and is in a developed but residential small town, while the other one Dmetto Supper is in a developing and agricultural location. SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is an important strategy to identify the position of the business and the possible options for improvement and analysis of how to act on the information, (SAMHSA, 2010). SWOT analysis focuses on the contexts that affect a business internally (Strengths and Weaknesses) and externally (opportunities and threats), (Valentin, 2005)
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Though the two supermarkets share the same business model and sell to the same demographic, their location creates a difference in the results and expectations. I will put these differences in a SWOT analysis below.
Dmetto Main is in a developed town has the advantages that come with a developed town, strong communication lines which makes it possible for deliveries of supplies to be requested over the telephone or online. Being part of Dmetto Super has its advantages. Dmetto is able to provide fresh vegetables and fruits from the same suppliers as the sister supermarket. Buying in bulk comes with the advantages of the economies of scale in buying. Dmetto has the advantage of fresh farm produce at a more affordable cost than other supermarkets in this location (SAHMSA, 2010). The advantage that Dmetto Supper has is the availability of fresh vegetables and affordable labor from the young population. Dmetto Supper has the advantage of exclusivity being the only supermarket in this growing town.
Dmetto Main has a problem in getting affordable labor. With ready competition, it is not possible to add this cost to the products since this may push the customers away. The cost has therefore to be absorbed reducing the supermarket’s profitability. This leads to an increase in cost in this particular supermarket. Again there are two other supermarkets offering almost similar services. Dmetto Supper has poor infrastructure. The source of energy is unreliable. Means of communication are limited as the telephone lines are not very clear. As such sales are only done through direct contact. Supplies are sometimes late to arrive especially when the communication lines are down. This affects the business as customers will complain of the restaurant’s unreliability.
Dmetto Main is in a developed area with opportunities of providing online services to clients. The idea of loyalty points is catching up and Dmetto is planning to introduce the loyalty cards for the customers. This will be available in both supermarkets. Dmetto Supper has prospective growth opportunities. Being located in a developing area and having the exclusivity advantage, there are high prospects of successful expansion. The population is likely to increase, infrastructure will improve and is the only supermarket in the area it will be way ahead of possible new entrants.
Dmetto Main is under competition threat from several other supermarkets that are present in this particular location. Dmetto Supper has a threat of losing customers as a result of late deliveries caused by the unavailability of effective telecommunication lines. These customers are working in big towns and will do their shopping within these towns on their way from work.
- SAHMSA. Instructions for conducting a SWOT analysis. 2010. Web.
- Valentin, Erhard. A way with SWOT Analysis: Use Defensive/Offensive Evaluation Instead 2005.