SWOT analysis comprising strengths, weaknesses, opportunity and threat. Strengths helps in identifying internal feature that help a firm to gain competitive advantage. Firstly, first mover as well as one of the well-known supermarket in town considers as a strength for JJ Supermarket. As according to case scenario, JJ Supermarket has operated for about 15 years and expand from a mini-market to a well-known market in a small town in Selangor. This able to helps JJ Supermarket to develop a strengths. The reason is because as JJ Supermarket as the first mover that enter into this small town and become a well-known supermarket in this area, JJ Supermarket able to capture market share and become the leading company in this small town as well as in this industry. Also, JJ Supermarket be the first mini-market that operated in a small town have been earned a lot of first-mover profit and collected specific number of loyalty customer before competitor came.
Besides, the strengths for JJ Supermarket is strategically located throughout the town. 15 years ago when JJ Supermarket start operation, it is just a small town in Selangor and only have population of about 5,000. Along the year, the town has now highways linked to other nearby towns and population has increased to 20,000 in year 2015 as mentioned in this case scenario. This helps JJ Supermarket in creating strengths. It is due for since town has linked to other nearby towns, more people will come to visit JJ Supermarket and thus it can increase sales revenue as well as increase marketplace growth.
In addition, customized products offered by JJ Supermarket also consider as strength for JJ Supermarket. JJ Supermarket has signed an agreement with local manufacturer to produce clothes and apparels with their own private labels. By having customize products, it can help to attract more customers and build customer loyalty. As a result, it can build competitive advantage.
On other hand, there are also few weaknesses to JJ Supermarket. Weakness is referring skills an organizations lacks which affect organization’s ability to develop a sustainable competitive advantage. One of weaknesses for JJ Supermarket is do not have promotion and discount. Nowadays, most of people like to get promotion and discount. In this case scenario, CarryFour Hypermarket and K-Mart Discount Center are organizing weekend a holiday promotion as well as giving discount to their customers. However, JJ Supermarket do not provide any promotion and discount. This weakness will cause JJ Supermarket to loss a lot of customers since many customer has switch and visit to those hypermarket or mart that providing them discount and promotion.
Moreover, the other weakness for JJ Supermarket is higher selling price as among competitors. Other competitor such as Ah Seng Supermarket, CarryFour Hypermarket as well as K-Mart Discount Center, they can offer products at much lower price. The reason is because they can sources products from low labor cost country such as Thailand and China as well as able to reduce the selling price of supplier. However, for JJ Supermarket, it sources foreign products from developing countries such as Korea, United Stated due to high quality provided. Thus, it cause the raw material cost increased. In order to get breakeven, JJ Supermarket unable to low selling price unless it will reduce the profit. Unfortunately, some customers are focus on price rather than quality. Therefore, customers will choose to buy from other competitor that offer cheaper price as compare to JJ Supermarket.
Also, there are few opportunities for JJ Supermarket. Opportunity refers external factors which help organization to achieve competitive advantage. The opportunity of JJ Supermarket is collaborative with business partner. In this cases scenario, JJ supermarket has cooperated with Ah Seng Supermarket, share the market other common goods such as dry market products. By having cooperation with business partner, JJ supermarket able to learn new knowledge through partner and might generate some fresh ideas regarding on products sold. Thus, JJ Supermarket able to offer some new products that able to attract more customers.
Furthermore, JJ Supermarket able to develop opportunity if they can improve promotion techniques. Currently, JJ Supermarket only implementing the throat-cutting price competition and having weekends and holiday sales. However, it is not enough to grab opportunity as well as sustain in this market. In order for developing this opportunity, JJ Supermarket should improve the promotion technique by advertise their products or promotion through newspaper, magazine as well as online platform such as facebook and youtube. By advertising through physical as well as online platform, many people able to see promotion that offered by JJ Supermarket and will visit to their stores.
Moreover, since JJ Supermarket as built relationship with local manufacturer by signing an agreement, JJ Supermarket can also built relationship by signing agreement with foreign manufacturers. By building relationship with foreign manufacturers, it help JJ Supermarket to explore the opportunity to expand in oversea. The reason is because if JJ Supermarket has buid relationship with foreign manufacturer, they can try to expand their business in partner’s country since the partners has fully understand the country’s culture as well as customer’s need. Therefore, JJ Supermarket can use this opportunity as well as expand internationally.
Last but not least, there are also few threats that found in JJ Supermarket. Threats is external environments that affect company performance. Firstly threats of JJ Supermarket is intense rivalry in the market. As mentioned in the case, competition in the market become aggressive due to new entrants. Those new entrants such as K-Mart Discount Center is able to provide much cheaper price as compare to JJ Supermarket. Therefore, it create threat for JJ Supermarket since JJ Supermarket unable to produce those goods at such lower cost.
Lastly, threat for JJ Supermarket is high bargaining power of buyers. As according to case scenario, people in town are predominantly medium to high wage earners. As they have high purchasing power, it gives them more choice to choose. They can choose to buy from markets that provide wider range or cheaper price as well as high quality. However, many of the customer prefer to buy cheaper products. JJ Supermarket that currently implementing moderate pricing may face a threat as people will not choose to buy from it due to higher price.
CASE 2: Q2
Competitor analysis, an important element that helps an organizations in evaluating their competitor by examine how competitor relate to them as well as how competitor will affect them. By establish competitor analysis, it can help organization achieve competitive advantage. To analysis competitor, it is based on market commonality which means the number of marketplace in which firms as well as competitor jointly involved as well as resources similarity which means the similarity in firms and competitor resources including tangible and intangible resources.
According to this case scenario, there are three competitors for JJ Supermarket. Firstly, the competitor is Ah Seng Supermarket. Ah Seng Supermarket considers as direct and mutually acknowledge competitor for JJ Supermarket. The reason because both using similar portfolio to compete against each other as Ah Seng Supermarket is offering the range of product that similar to JJ Supermarket like wet markets products, kitchenware and others. Also, both supermarket also known each other as competitor since the case mentioned that Ah Seng Supermarket had been a healthy competitor to JJ Supermarket.
The main strengths for Ah Seng Supermarket to compete with JJ Supermarket is they able to provide fresh goods daily from local farmers and fisherman such as vegetables, meats and also seafood. In addition, Ah Seng able to get resources from other country like China and Taiwan with much lower price than JJ Supermarket. However, there are few issues that Ah Seng Supermarket faced. Ah Seng Supermarket do not have enough parking spaces for visitor to place their car. It is a serious problem for them as everyone drive in order to buy their needs. If there is not enough parking space for them, buyers may visit other supermarket. Also, Ah Seng Supermarket has a cramped store layout which will let buyer felt uncomfortable when they shop supermarket.
Besides, CarryFour Hypermarket also known as a competitor to JJ Supermarket. However, CarryFour Hypermarket not consider as JJ Supermarket’s direct competitor since CarryFour Hypermarket is big nation-wide wholesale chain store that have lot of capital to manage their activities as compare with JJ Supermarket that only operated in a small town in Selangor. CarryFour Hypermarket not only offered wide variety of products that almost similar to JJ Supermarket, CarryFour Hypermarket also offered at much lower price as compared to JJ Supermarket. This reason is because CarryFour Hypermarket able to get from supplier and manufacturer at cheaper price.
This current strategies which CarryFour Hypermarket uses to attract customers are advertising and promotions techniques. In order to increase sales, CarryFour Hypermarket advertises their products and promotions through newspaper as well as inhouse magazine in order to let more people to get well-known of their products. In addition, CarryFour Hypermarket also implement weekend and holiday promotion in order to attract more people to visit their market as well as implement a membership scheme to enjoy additional discount so that they able to gather some loyal customers.
The strengths for CarryFour Hypermarket is they offer buyers a comfortable shopping experience. As mentioned in case, CarryFour Hypermarket offer larger store space for customer. Not only have that, advertising and promotion strategies that CarryFour Hypermarket can also be the strength to them as this able to help them to get competitive advantage since JJ Supermarket and Ah Seng supermarket do not provided. However, there are also a weaknesses found in CarryFour Hypermarket. In order for CarryFour Hypermarket to get bulk purchase discount, they need to buy in high order volume as according to the case. This can be a weaknesses to CarryFour Hypermarket. The reason is because if they purchase large volume quantity of products, some of the products may become obsolete if they unable to finish selling.
Lastly, the third competitor of JJ Supermarket K-Mart Discount Center. K-Mart Discount Center known as indirect competitor for JJ Supermarket since they only share few markets and have little similarity in their resources. As according to case scenario, K-Mart Discount Center able to provide wide range of goods that almost similar to JJ Supermarket and CarryFour Hypermarket. However, K-Mart Discount Center can offer much cheaper price as most of the products are imported from those low labor cost country such as China, Thailand and Indonesia.
This current strategies that K-Mart Discount Center is having some similarity as compared to CarryFour Hypermarket. Both are offering weekend and holiday promotions in order to attract customer and increase sales. Moreover, K-Mart Discount Center is offering a unique services that unable to found from all supermarket and hypermarket. K-Mart Discount Center is serving varieties of international Asian food within the store. As for K-Mart Discount Center, the strengths is having unique services among competitors. By having the unique services, it able to compete with some of the larger competitors such as CarryFour Hypermarket. When buyers felt tired after shop stores, they may have a rest in those store that serve with international Asian food. However, low quality product will be the weaknesses for K-Mart Discount Center. Although the product sell at lower price, but quality also important. If buyers not satisfied with quality provided, they will switch to another stores that sell at better quality with affordable price like JJ Supermarket a troubles and loss the capabilities.
