CODE & COURSE NAME :

EPPA 4716
INTEGRATED CASE STUDY

TASK:
SUPERMART CASE STUDY

BIL. NAME MATRIC NO.

1. LAVAN YA A/P K.RENGA RAJOO GA03715

2. NORSAZALIA BINTI MOHD SOIB GA03707

3. NOR ADLINA BINTI ABD LATIF GA03702

4. SHAHRUL FAEZI BIN JAAFAR GA03715

LECTURER :
PROF. MADYADR RUHANITA MAELAH

SET
BAC _EKSEKUTIF_BANGI
 SuperMart Case Study

NO. TITLE PAGES

1.0 INTRODUCTION 2–3

2.0 ISSUE 3-4

3.0 EXHIBIT ISSUE 4–9

4.0 RECOMMMENDATION 9

5.0 CONCLUSION 10

6.0 REFERENCES 10

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 SuperMart Case Study

1.0 INTRODUCTION

SuperMart Inc. was started in 1907 as a family grocery business and has now grown to be a
leading grocery retailer. In fact, prior to the development of supermarkets, SuperMart was one
of the world’s largest grocery retailer. It is incorporated in the United States of America and has
its head office in New York. In the early days it prided itself on high quality produce and service
levels, but as markets grew and transport links became more efficient SuperMart found that it
had a competitive advantage on costs, as it was able to buy in more volume than its smaller
competitors. It retained the ethos of high quality and high levels of service, but also managed to
base its strategy on cost-leadership as the ever increasing volumes provided significant buyer
power in the industry.

The initial development of self-service groceries was ignored by SuperMart, which regarded
personal customer service as more important to its customers, and viewed the potential labour
savings as irrelevant. Labour became more expensive in conditions of full employment with
increasing legislation protecting employee rights.

GlobalStores, which is also incorporated and based in the USA, had originally been a smaller
rival of SuperMart, but had been an early developer of self-service grocery stores. GlobalStores
continued to innovate, developing larger stores. It found that labour savings increased, and that
a wider range of groceries and general merchandise could be sold in these stores without
excessive stockholding costs. The customers liked this, and were also attracted by the first out-
of-town stores, which were even larger, and provided easy and free car parking for customers,
avoiding town centre congestion. Customers were no longer limited to buying what they could
carry away by public transport; they could, if they wished, fill their cars. GlobalStores continued
to innovate in retailing. Customer loyalty was fostered by offering loyalty discount schemes
where points could be saved and used against future purchases in store.

The market in which GlobalStores and SuperMart operates changed into one in which, with the
development of a “one-stop shop” pattern, customers could buy most or all of their weekly food
and other regular requirements in a single visit. However, supermarkets kept a keen eye on local
government counties and municipalities where housing projects were being developed to attract
certain types of people in to the area. Supermarkets were very interested in monitoring housing
plans that were developed to attract their ‘type of customer to an area’ and would themselves
seek planning permission to build a store in the area.

By the time that SuperMart started to assess developments by GlobalStores, and recognised
that the market for groceries may have changed, investors had been attracted to GlobalStores
because of its high growth rate and attractive margins. GlobalStores used its resulting high share
price to acquire several smaller groups, and to raise new capital to continue to build out-of-town
stores. Every time GlobalStores reviewed its building programme, it commissioned larger stores.

SuperMart had responded to the developments by GlobalStores, and followed it in converting

stores to self-service, and in building out-of-town stores. But this was initially done on an
experimental basis, to see if there were genuine savings to be achieved. Development did not
occur on the same scale as, or with the speed of, GlobalStores. SuperMart also followed
GlobalStores in selling a much wider range of products expanding beyond food items to include

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a range of non-food items. SuperMart was late in introducing technology into the stores such as
electronicpoint of sales checkouts and hence did not have access to the information that the use
of electronic loyalty card schemes could provide about the customers. SuperMart has also been
slow in implementing payment methods such as ‘proximity contactless cards’, which are growing
in popularity with younger shoppers. However, some of the more senior, older, shoppers are
worried about the cyber threat to their data security, so, in many of SuperMart’s markets, still
prefer to pay by more conventional methods. It also missed out on developing efficient just-in-
time delivery relationships with its suppliers which meant that its cost base began to rise
compared to that of competitors, and particularly that of GlobalStores.

2.0 ISSUES

The supermarket industry has been under fire from the media and consumer groups in recent
years, and the USA, like many countries has experienced a growing concern with obesity within
its population. The types of food sold by supermarkets has been heavily criticised, as has the
amount of packaging and food wastage. SuperMart has attempted to respond by actively
seeking ways to reduce food wastage. reducing the carbon footprint throughout the whole supply
chain and trading responsibly. Recent government promises to legislate to ban the use of single
use plastics in packaging has sent shock waves through the industry.

GlobalStores has been producing a Sustainability and Corporate Social Responsibility report for
several years but SuperMart has not produced a separate report, preferring to pay lip service to
its polices in the Annual Report and Accounts. However, SuperMart does have a sustainability
policy which was put together by Susan Paine, the VP Human Resources. In the overall
summary it talks about not just working to reduce food waste but to improve the health of the
nation by working towards offering healthier food options with less additives and processed
foods. The difficulty with this for SuperMart is that most members of the executive management
team see it as increasing the costs, and with the price wars in the industry it is difficult to put this
into practice and remain competitive unless the whole industry adopts the same policy.

Working closely with suppliers is seen as a positive step in that it can reduce costs through
improved communication and increased efficiencies but unless suppliers adopt similar policies
and commitments to reduce carbon, change processing practices, find new sustainable methods
and materials for packaging, SuperMart have found that it does not have the buyer power it used
to have and is not able to insist that suppliers adopt sustainable policies if they wish to trade
responsibly with SuperMart. There is a danger that if SuperMart is too insistent it will make
suppliers unwilling to work closely with them if they feel they can make a higher margin by

SuperMart’s main competitors. Zhang Yixing, VP Operations, and Michael Chang, Chief
Purchasing Officer, are both in favour of sustainability, but not at the expense of profitability, or
making supplier relationships difficult. Susan Paine (VP Human Resources) also included
elements in the CSR report about being a responsible employer and ensuring jobs were
sustainable, and that SuperMart would strive to make a positive social and economic
contribution by working closely with the local communities in which it operates. As the reporting
of its sustainable activities is limited now, SuperMart does not have any specific performance
measures or control systems in place to effectively monitor the degree to which it is achieving
any degree of sustainability in its operations. However, Susan Paine is supported by the Chief

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Executive Officer, Christiana Tasousa, that SuperMart should strive to be seen as a sustainable
company, i.e., one that takes its responsibility seriously.

Susan Paine (VP Human Resources) also included elements in the CSR report about being a
responsible employer and ensuring jobs were sustainable, and that SuperMart would strive to
make a positive social and economic contribution by working closely with the local communities
in which it operates.

As the reporting of its sustainable activities is limited now, SuperMart does not have any specific
performance measures or control systems in place to effectively monitor the degree to which it
is achieving any degree of sustainability in its operations. However, Susan Paine is supported
by the Chief Executive Officer, Christiana Tasousa, that SuperMart should strive to be seen as
a sustainable company, i.e., one that takes its responsibility seriously.

3.0 EXHIBIT ISSUE

3.1 Heinrick Volkler

Analysis :
SuperMart appears to depreciate investments in store fittings and information technology more
slowly than GlobalStores. The effect of this would be that the charge for depreciation to the
accounts is lower than GlobalStores which means that the lower profits of SuperMart is even
more worrying. GlobalStores will potentially replace the equipment more regularly than
SuperMart adding to the problem that SuperMart is seen as old-fashioned and out of touch with
modern technology. He is also concerned by differences in accounting for pension liabilities, as
SuperMart has proportionately many more long-service employees than GlobalStores. Heinrick
is confident that SuperMart has accounted correctly for revenue and payments to suppliers, but
he is concerned that it could damage supplier relationships if the publicity raises suspicion about
the practices of supermarkets.

Solution :
SuperMart need to reduce company expenses such as over hiring or reducing company staff. in
addition, to generating high profits in the future, SuperMarts need to work harder than
GlobalStores by using quality staff, good services, and cooperate regardless of the position held.

Advantages :
1. SuperMart is able to increase its profit rate over time.
2. SuperMart can compete with competitors such as GlobalStores more effectively.
3. SuperMart are able to estimate better accounting and also save a lot of costs especially
related to pension liabilities.
Disadvantages :
1. Workers will take the opportunity and not to carry out their duties due to the large
workforce.
2. Expenses that unable to managed by the company it will cause the same problems often
in the future.

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3. GlobalStores will continue to get many customers with the weaknesses shown by
Supermart.

3.2 Christiana Tasousa

She is concerned that the growth of GlobalStores continues to outstrip that of SuperMart, but
could not see any easy answer in terms of improving operations in the USA. She liked the
present SuperMart supermarkets just the way they were. She was pleased she had been able
to persuade the executive team last year to increase job security and pension benefits for long-
service employees. However, she recognized that something had to be done to please the
investors and raise the share price. She thought she might have to re-consider her ideas, if
changes to the supermarkets could attract new customers into the stores.

Analysis:
Current forecast is that earnings per share for 2019 will be materially below that for 2018. It is
possibly as low as $ 1.25 compared with $ 1.59

Solution:
In this case, SuperMart focus on the top four methods. Which is straight-line, moving average,
simple linear regression, and multiple linear regression.

Advantages:
1. An organization uses a variety of forecasting models to assess possible outcomes for the
company. The methods used by an individual organization will depend on the data
available and the industry in which the organization operates.
2. The primary advantage of forecasting is that it provides the business with valuable
information that the business can use to make decisions about the future of the
organization. In many cases forecasting uses qualitative data that depends on the
judgment of experts.

Disadvantages:
1. It is not possible to accurately forecast the future. Because of the qualitative nature of
forecasting, a business can come up with different scenarios depending upon the
interpretation of the data. For this reason, organizations should never rely 100% on any
forecasting model. However, an organization can effectively use forecasting models with
other tools of analysis to give the organization the best possible information about the
future.

3.3 Mohammad Hafeez

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 SuperMart Case Study

He found the accounting system to be rather old-fashioned. He hoped to develop a new

integrated system as part of any (much overdue) information systems update. He understood
the concerns expressed by Heinrick Volkler regarding depreciation and pension liabilities.

Analysis:
It shows Depreciation are increase from year by year. It is 0.92 on 2018, 0.91 on 2017 and 0.79
on 2016. It increase 0.12 for the year 2016 to 2017 and 0.001 for the year 2017 to 2018. The
pension liabilities is is the difference between the total amount due to retirees and the actual
amount of money the company has on hand to make those payments.

Solution:
Depreciation and amortization are used to allocate, or expense, the cost of an asset over its
useful life, or the length of time the asset will be used by the organization. While the terms
"depreciation" and "amortization" describe the same accounting process -- cost allocation
across time -- depreciation is often used when referring to tangible assets, while amortization
often refers to intangible assets. To increase earnings, management may consider ways to lower
depreciation and amortization expense.

Advantages:
1. Improved employee productivity
If your employees are bogged down by inefficient and disjointed systems, they cannot
perform at an optimal level. Tasks like manually transferring customer data from one
system to another can increase errors, take away from the employee’s core duties, and
reduce the overall agility of your company.

2. Real-time visibility
When companies have to deal with multiple siloed systems and overlapping databases,
they can never see a complete view of their business in real-time.
This prevents them from making the kind of quick, accurate business decisions required
to stay agile in a competitive marketplace.

3. Lower IT costs
IT departments waste a lot of time, energy, and money, maintaining and updating siloed
business systems and applications. Integrated software applications can help by letting IT
professionals focus on strategic initiatives that add to the company’s bottom line.

4. Lower customer churn

Providing an exceptional customer experience is essential for retaining your customer
base. It is also one of the most powerful advantages of integrated software applications.

5. User-driven innovation
When using integrated software applications, changes and improvements can be
implemented very quickly. Everyday users can utilize their functional expertise to spot and
address performance issues, and your company can create tailor-made workflows that
support optimal performance.
Disadvatages:
1. Security issues.

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 SuperMart Case Study

When it comes to security matters, having several programs is better than one integrated
system.
2. Complex upgrading.
When it comes to upgrading the system, your IT team is likely to have a tough time.
3. High cost.
When it comes to upgrading the system it will course a high cost.

3.4 Zhang Yixing

He would like to cut staff considerably and close many of the smaller stores. He would like to
carry out such a policy now, but sees no prospect of gaining support.

Analysis and Solution :

Supermarts can be more focused on the right store bringing in more profit. When the number of
stores is reduced, the problem can also be reduced to some extent. The company can be more
focused on the problems that arise and may be able to solve them in a short period of time.
Compensation should be given to employees who are retrenched due to store closures.

3.5 Victor Adebowale

SuperMart had been very late into the home shopping market and was trying to catch up with
the other supermarkets who had much more experience of operating home shopping.

Analysis :
Online businesses also provide an opportunity for online merchants to operate 24 hours a day.
Advanced technology now allows Internet users to shop online anytime and anywhere. Plus, the
community is now so busy with jobs that there is no time to shop even on weekends.

In fact, merchants do not have to monitor booking transactions all the time. They only need to
set up an automatic booking system for the convenience of the next customer to manage the
order delivery once the post office opens. Thus, traders who choose this business method can
enjoy the freedom or flexibility of working hours without compromising their fixed source of
income.

Solutions :
Traders can also enjoy the freedom of the workplace because they only need to control all
transactions via computer from any place such as at home, in a restaurant or on the way to a
place or while traveling in or outside the country as long as they have Internet access. In short,
there are no time limits or constraints if one is interested in starting an online enterprise. Small
or large, part -time or full -time, it’s all in your own hands.

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Advantages :
However, despite the advantages gained by merchants and customers, there are also
disadvantages of online business. There are several scenarios against dealers and customers.
For example, the risk of quality assurance when the goods purchased do not meet the
requirements of the customer. In addition, the size of the item, the color and description of the
actual item may differ as in the catalog.

Disadvantages :
Disappointed customers have to comply once they have received the goods. There are also
those who do not trust by taking advantage of cheating in online transactions.

3.6 Amelie Poulain

Some investments had been sound and traded profitably. Others were at best marginal. All were
quite small. While overall, they added up to 12% of SuperMart’s turnover, they contributed less
than 2% of the profit. SuperMart’s market share did not exceed 3% in any of the international
markets in which it traded. Ideally, she would sell most of the present overseas stores, retaining
only the most profitable operations, and then persuade SuperMart to make a major overseas
investment.

Analysis & Solutions :

SuperMart need to diversify their investments. Investing in international mutual funds provides
their with diversification beyond markets across different economies, currencies and offers
growth potential of foreign companies. Overseas investment or foreign direct investment (FDI)
is an integral part of an open and effective international economic system and a major catalyst
to development.

Advantages:
1. Diversifies investor portfolios: SuperMart have the potential to achieve greater portfolio
efficiency (return per unit of risk), as FDI diversifies their holdings outside of a specific
country, industry, or political system. Generally, a broader base of investments will
dampen overall portfolio volatility and provide for stronger long-term returns.
2. Promotes stable, long-term lending: Another advantage of FDI is that it offsets
the volatility created by "hot money." That's when short-term lenders and currency
traders create an asset bubble. They invest lots of money all at once, then sell their
investments just as fast. That can create a boom-bust cycle that ruins economies and
ends political regimes. Foreign direct investment takes longer to set up and has a more
permanent footprint in a country.

Disadvantages:
1. Investors have less moral attachment: Foreign investors might strip the business of its
value without adding any. They could sell unprofitable portions of the company to local,
less sophisticated investors.
2. Unethical access to local markets: They can use the company's collateral to get low-
cost, local loans. Instead of reinvesting it, they lend the funds back to the parent company.

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3.7 Susan Paine

In particular, she wished to raise the case for a policy of allowing early retirement for some long-
service employees to provide scope to recruit younger staff, especially from ethnic minorities,
even though she did not think the CEO would be enthusiastic.

Analysis & Solutions:

The fiscal sustainability of state pensions is a central concern of policymakers in nearly every
advanced economy. Policymakers have attempted to ensure the sustainability of these
programs in recent decades by raising retirement ages. However, there are concerns that
keeping older workers in the workforce for longer might have negative consequences for
younger workers. Since youth unemployment is a pressing problem throughout advanced and
developing countries, it is important to consider the impact of these policies on the employment
prospects of the young.

Advantages:
1. Increasing the retirement age increases younger workers’ wages.
2. There is no trade-off in the employment of young and old workers: higher employment
for older workers coincides with higher employment for younger workers.
3. Younger and older workers are complements for each other rather than substitutes.

Disadvantages:
1. Reducing the employment of older persons does not provide more job opportunities for
younger persons.
2. Increasing the employment of older persons neither reduces the employment, nor does it
lead to more unemployment, of younger persons.
3. Lowering the retirement age decreases the incentives to train and to invest in additional
skills, and therefore leads to lower economic growth.

4.0 RECOMMENDATION

All the issues reviewed in the case, we have given our recommendation to the company to
mitigate the risks that will be faced in the future. SuperMart should take lessons from issues that
will affect the company's position either in terms of performance or financially. We are of the
view that all the analysis, solutions, advantages and disadvantages described in certain pages
can help the company generate higher profits and also help the company get the “pure
completion” in with its rivals such as GlobaStores and other grocery businesses. Moreover,
SuperMar can improve their performance towards more advanced ones. On the other hand,
SuperMart can find better suppliers to strengthen their profit & sales. If SuperMart has made
improvements from the aspects suggested above. SuperMart need to expand their business
internationally to regain trust in existing investors and customers.

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5.0 CONCLUSION

As a conclusion related to the situation analysis, solutions and recommendation above,

Supermart’s can deal with all this will provide benefits to the company. We can see many of the
important issues shown in this case studies have been made by all members of the group where
the position of this Supersmart’s not encouraging. Another that, many other issues can be
studied for us to understand the current situation that is happening to this company, in the
presence of this study, we can conclude to give a more effective explanation to this company.
All parties in all departments are essential to the company’s position. Wer have selected the
more important issues in our study. This includes all related issued. The things that have been
highlighted in this writing can also give a positive reminder to the development of the company
in the future.

6.0 REFERENCES

1. SuperMart Case Study.pptx

2. Case 1 – Supermart case study.pdf
3. https://ukmedumy.sharepoint.com/sites/EPPA4513PKP/Shared%20Documents/General/
Recordings/Meeting%20in%20%27EPPA4513%20PKP%27_20210502_010211.mp4?w
eb=1

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