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SuperValu Inc. or simply SuperValu is an American based company that specializes in the grocery retail and distribution business. It is a private listed company whose stocks are listed in the New York Stock Exchange under the symbol SVU. It is one of the largest (listed at number three) retailers in the Unite States of America. The company was ranked at number fifty one in the Fortune 100 list (Money Magazine, 2009). The company was ranked as the number one retailer of grocessy (Super Market News, 2008). SuperValu is currently listed at number 47 in the Fortune 1000 Global Companies list (one source, 2011). SWOT Analysis SWOT Matrix The SWOT analysis of SuperValu Inc. is as follows: Strengths y y y y Portfolio Management strategies Strong Supply Chain network Strategic Acquisitions Opportunities y y y y Leverage acquisitions Offer organic products Offer private labels Expansion y y y y y Weaknesses Underdeveloped marketing expertise Product recalls Threats Competition US Economy Increased cost of doing business


SuperValu has number of strengths that helps it to leverage itself in the market place. Among them is the exclusive brand portfolio of store brands and regional banners which makes it different and distinguishable from its competitors (SuperValu, 2011). The company is currently listed at number 47 in the Forbes list of global companies (one source, 2011). The strong market postion of the company has supported its revenue generation and have given competitive edge over competitors. The market knowledge and the efficient supply chain network has allowed the company to excell in the domestic markets. The company and its management has employed decentralized decision making system to increase the level of decision making when they are required at once. This system allows it to maintain the timely implementation of requirements without any hinderence. It has a long history of acquisitions which has given it an adage in the markets (SuperValu, 2011). Weaknesses Despite of its lot of strengths that makes it superior from many of its competitors, it has some weaknesses as well. One of them is the large number of product recalls, the customers have reported various times that the products sold to them were unhygienic and were not fresh. There were incidences when the company itself voluntarily recalled its products including macroni, cheese and other related gourmet products due to the fact that the products were having the potential to be contaminated with listeria monocytogenes (FDA, 2009). Another biggest

weakness of the company is the lack of aggressive marketing strategies. It is involved in the market via its stores only or sometimes through print media and website. The company needs proper marketing plan and strategies in order to remain active in the competition. Opportunities

There are various opportunities available to SuperValu currently that, if properly utilized, can benefit it in terms of revenue and increased market share. As discussed earlier, the company has the long history of acquisitions. It can formulate the strategies to utilize the acquisition to the extent that would benefit the company in many folds. Secondly it should shift its focus to private brands as well. There is an increase in demand of the private brands lately. SuperValu can also focus on higher margin retail business and other departments specifically by focusing on the organic products. The consumers show high value to these products these days. Likewise, SuperValu can benefit itself by increasing its market presence further more. It can explore the untapped regions of the country as well as around the globe specifically the developing markets of India, China and Japan. Threats SuperValu despite of its profitability in the market is facing financial crisis due to weak economic conditions in the country. Early this year the company has reported a loss of over two hundred million US dollars for the first quarter, and revenue also fell around seven percent. Stock prices fell over eleven percent to around eight US dollars per share (Skidmore, 2011). The company has to face fierce competition with the existing market player in the grocery retail business. Its main competitors are Kroger Co., Safeway Inc. and Wal-Mart stores (Hoovers, 2011). Due to the US economic crash, the cost of doing business and living has increased in United States of America. This has badly affected all the business units of the company in terms of increased prices of renting equipment and building, raw materials, logistics etc. Large sum of money is spent on the rentals and logistics by the company every month to meet its business requirements.

PESTEL Analysis

The PESTEL analysis contains the analysis of Political, Economic, Social, Technological, Environmental and Legal environments of a country with reference to a particular object. The PESTEL analysis of SuperValu Inc. is as follows: Political SuperValu has developed good government affairs program to support the governmental issues and take part in the political initiatives. The company provides funding to the federal, state level political parties to help them support their good causes. It also provides monetary support to the candidates of the parties. The government of various states of America restricts corporate involvement in the political affairs; therefore, SuperValue helps the political parties while complying with the rules, regulations and laws formed at federal, state and region level in the country (SuperValu, 2011). Economic The economic conditions of United States have severely affected the business and profitability of the organizations. The retail grocery industry has Retailership giants like WalMart, Kroger etc. that are giving real hard time to their counterparts. They continue to compete with each other on various competitive formats they are adding to their businesses like food and non-food products, drugs, mass merchandize etc. The decline in the economy along with high rate of inflation on food and energy negatively impacted the consumer confidence and affected their ratio of spending in the markets. If these trends continue, it could lead to further reduced consumer spending, to consumers shifting to a less expensive mix of products or to consumers

looking for discounters for grocery items, all of these factors can impact the Companys sales growth (Annual Report, 2010). Social SuperValu is effectively engaged in the community related initiatives. The company has formed its foundation to facilitate the communities in United States. The foundation is known as SuperValu Foundation. This foundations have given around eighty million US dollars to the communities and local public (SuperValu, 2011). The company has developed associations with the other not for profit organizations to support the communities where they do business. Their associates includes: Feeding America, Food For All, Go Red For Women Campaign, Valu Earth, and United Way of America (SuperValu Community Involvement, 2011) Technological The role of technology in the success of any company in todays markets cannot be over looked .Technology is of great importance to SuperValu. The information technology department is responsible for developing and managing all the technology based aspects of the companys operations. It uses specific retail technology that comprehensively addresses every point where technology meets its operations. Its services are of varied nature. Some of its services include Electronic payment services, Electronic pricing support, Labor management and scheduling technology, Shrink-prevention services, Computer network/mobile computing infrastructure development, Gift card programs, and Operations consulting services (SuperValu, 2011). The company has arranged database system w technology to facilitate its employees and customers to their best (Garry, 2003).


SuperValu is committed to sustain the environmental safety by cutting the emissions of gases from its business operations, reducing the waste landfill as much as possible by using the recyclable packaging. They try to build green culture through education, communication and engagement. They are committed to provide green products and services to the customers that support them in meeting their personal environmental goals. To sustain its environmental safety goals it began to implement low energy LED lights to reduce the lighting needs in the stores, it has so far installed approximately 500 KW of solar power generating system in its stores. For the recycling and waste reduction efforts, SuperValu conducts waste audits to determine the recycling programs execution levels and offers reusable bags for sale in all of its stores. It has implemented a Recycle bank partnership at Cub Foods, Shoppers Food & Pharmacy, ACME, Shaw's/Star Market, and Albertsons. The recycling program rewards consumers' recycling efforts with store coupons (SuperValu Environmental Stewardship, 2011).

Legal The business practices adopted by the company under discussion are subject to various governmental regulations. These regulations may be of federal, state and local laws, regulations and administrative practices asserted on the company. It tries to comply with the rules, regulations and all the laws in order to carry out its business effectively and efficiently. These laws requires them to comply with numerous provisions including health, sanitation standards, equal employment opportunity, and minimum wage rates etc. (Annual Report, 2011). The Human Rights Campaign in the year 2008 gave 100% rating to the company on the Corporate Equality Index (Reuters, 2008). CEI is the tool which is used to rate American businesses on their treatment of gay, lesbian, bisexual and transgender employees, consumers and investors via surveying methods (Human Rights Org, 2010).

Porters Five Forces Analysis

Rivalry among established competitions The intensity of rivalry among the established competitors in the grocery retail markets is high. There are three main competitors to SuperValu; Kroger, Wal-Mart and Safeway (Hoovers, 2011). The rivalry is strong among basic grocers as they compete for low cost. There is a cut throat price competition from other stores and Wal-Mart to SuperValu.

Bargaining power of suppliers The bargaining power of suppliers is high. The suppliers of food and other related markets have high power over their buyers which have increased the rate of prices they ask on a particular commodity. The SuperValu has maintained efficient relationships with its suppliers and vendors which has a positive impact on their business relationships. it has also hired some independent retailers which offer the delivery of products right at their stores. This strategy has limited to the power of the suppliers to some extent (Annual Report, 2011)

The bargaining power of buyers The industry for grocery retail stores shows the high bargaining power of buyers. Buyers can always choose to switch to the other grocery store which offers goods at cheaper prices without affecting the quality of produce. The customers always go to low cost providers. In this case, the biggest threat to SuperValu is of Wal-Mart which provides products at low cost to the large number of customers.

The threat of substitute products or services

The threat of substitute products is low to medium. In the case of SuperValu, the substitute products are those which are inorganic and processed that are offered at low price. The customers are now savvy customers who go for the products that offer healthy and safe measures to them. Therefore they will less likely to fall for the inorganic products or any other substitutes.

The threat of the entry of new competitors

The industry imposes certain barriers to the entry of the new companies in the markets. This means that the level of threat of new entrants is relatively low in the industry. There are varying reasons to the low rate of entry. Among them is the entry barriers imposed by the industry. The new entrants will have to comply with the governmental regulations in order to make their entry in the markets. Then the existing players are protected by the number of barriers which makes it difficult for the new entrants to give hard time to them. Among them are: entry restrictions, tariff rates, high capital requirement, distribution channels etc. These barriers limit them to compete against the existing market players.


This study provided brief overview on the external environment analysis of SuperValu. The findings of the study suggested that SuperValu should focus on the following factors in order to excel its business and social image in the world: 1. Communicate with the customers in order to minimize the issue of product recalls. The repeated product recalls tends to damage the face of SuperValu.

2. Devise strategies to efficiently utilize the acquired resources to maximize the market presence 3. Improve the social image of the company by taking initiatives that promote the environmental safety, community development and reduced use of energy. 4. Expand the operations in the other regions across the globe. For this developing markets of China, India and Japan shows great potential of growth and promises revenue in return

References CEI, (2008). HRC Buying for Equality" Consumer Guide Released. EDGE Boston. Retrieved on June 24, 2011 from FDA, (2009). Frozen Culinary Circle Gourmet Macaroni And Cheese Recalled Due To Possible Listeria Contamination, Retrieved on June 24, 2011 from Fortune 500 List of Best Companies, (2009). Money Magazine, retrieved on June 24, 2011 from Garry, M,. (2003). Supervalu: The Middleman of Information, Retrieved on June 24, 2011 from Human Rights Org (2010) Workplace Equality Takes Center Stage with Record Number of Companies Rated in HRCs 2011 Corporate Equality, retrieved on June 24, 2011 from OneSource, (2011). Fortune 1000 Global Companies List, Retrieved on June 24, 2011 from Reuters, (2008). SUPERVALU Receives Perfect Score on Human Rights Campaign's Corporate Equality Index. Reuters. Retrieved on June 24, 2011 from Skidmore, S., (January 11, 2011). Supervalu loses money in 3Q, cuts outlook for year. National Business. Retrieved on June 24, 2011 from

SuperMarket News, (2008). Top Wholesalers for 2008. Supermarket News. Retrieved on June 24, 2011 from SuperValu, (2011). Annual Report: Fiscal 2010, Retrieved on June 24, 2011 from 1 (2011). Annual Reports, Retrieved on June 24, 2011 from M=&t=1 (2011). Community Involvement, Retrieved on June 24, 2011 from (2011). Diversity, Retrieved on June 24, 2011 from (2011). Environmental Stewardship, Retrieved on June 24, 2011 from (2011). Good Government Program, Retrieved on June 24, 2011 from (2011). Retail Technology, Retrieved on June 24, 2011 from SuperValu Inc. (2011). SuperValu Competitors, Hoovers, Retrieved on June 24, 2011 from