Stop & Shop grocery store chain is a semi-national carrier of agricultural produce and the full assortment of grocery store items. The chain has emerged as one of the primary food store chains in the country within the areas of its operation. Now considered somewhat of a gourmet food store, Stop & Shop has maintained a steady customer supply base and so far has not had any customer issues with regard to the quality of the supply chain.
According to Abelson (2006), "Stop & Shop's New England stores have just under 30% of the region's market, but well-run competitors are aggressively expanding in the region, from Hannaford's to While Foods, said Kevin Griffin, publisher of the Griffin Report of Food Marketing in Pembroke. Ahold bought Stop & Shop Supermarket Co., of Quincy, a decade ago. Today, the company is the region's largest grocer, with about 382 stores, including in New York and New Jersey, and is considered the crown jewel of Ahold's U.S. chains. Ahold's other supermarket brands include Giant, Peapod, and Tops." (Abelson, 2006)
Stop & Shop has achieved market penetration and ostensibly shares supply chains with the other Ahold's supermarket brands. The need for new suppliers would be due to the revamping of the internal operations subject to establishing new relationships with suppliers to establish value all throughout the supply chain.
According to the Business Wire (2008), "By integrating our previously untapped customer and loyalty insights, we are taking a completely new approach to the way we create assortments," said Don Sussman, executive vice president of merchandising and supply chain, The Stop & Shop Supermarket Company. "The insights derived from the IRI Assortment Planner will provide Stop & Shop with the ability to manage our entire effort, from planning to implementation to the customer. This is the best way to truly differentiate Stop & Shop, and we believe IRI offers the best solution to help us reach our objectives. In the end, using these insights will create a better shopping experience that better serves our customers." (Business Wire, 2008)
According to Bailey (1997), "Corporate raiders Herbert and Robert Haft last night tossed in the towel and walked away from Stop & Shop about 18 million richer. The Hafts, who head the Maryland-based Dart Group Corporation said they would not renew their tender offer to buy Stop & Shop for $37 per share. The Dart Group's offer, which was first made last month, touched off a bitter takeover battle and sent Stop & Shop scurrying for cover." (Bailey, 1997)
The management regarding company operations is an important area to address considering the tenuous nature of ownership. A well operated company that has optimal coordination of integrated internal operational processes and can identify actual value throughout the value chain can create an environment where operations become sustainable and can survive ownership changes and subsequent issues of uncertainty.
Outsourcing capabilities decentralizes the internal operations that in house management is responsible for the purview of. According to Hassan, Kassim, Shamsudin, Bin, & Azmi, (2010), "Outsourcing or else famous as subcontracting is the strategy employ of assets out of the firm to accomplish jobs which are typically executed in house by the firm itself. Inside today's viable globe, victorious outsourcing is a commanding instrument for firms to engender value and expand viable advantage ahead of competitors. Firms can emphasis on their central part of capabilities and depend on their outsourcing allies for non-crucial procedures and functions." (Hassan, Ghozali, Kassim, Mohd, Bin, Azmi, 2010)
Stop & Shop can decide to engage outsourcing of capabilities to attempt to achieve optimal coordination of inter-functional operational processes and inter-organizational collaboration across the scope of the value chain. According to Hassan, Ghozali, Kassim, Mohd, Bin, Azmi, 2010), "One aspect of thriving outsourcing comprises a cordial supplier-manufacturer relationship. The constructive influences of outsourcing in the direction of organization performance and business performance which equally are in lieu of monetary reimbursement had been studied comprehensively however manifest in numerous scholastic literatures and manuscripts, experimental conclusion specifically in countries like Malaysia are inadequate in particular outsourcing in non-monetary benefits Kong (2005)." (Hassan, Mohd, Bin, Azmi, 2010)
The inter-functional operational processes and inter-organizational collaboration are enablers to identify the critical links that Stop & Shop engages to bring products to the market at the lowest price to the consumer. The grocer primarily operates in the northeast U.S. And is active in one of the most competitive grocery markets in the U.S., the NYC market. The outsourcing of internal operations such as payroll and human resources is possible. Cost savings can be tremendous by streamlining payroll operations with a payroll company such as ADP or one of the many others. Additionally, PeopleSoft can be enabled as the solution to handle the human resources aspects within the organization, including benefit management and the raise structure.
Stop & Shop can save by streamlining part of the internal operations of the company. The supply chain for product delivery to the firm is in place and seems to be the best attribute of the company. Unless there is a very specific reason to change vendors, there is no reason to change a winning formula. The company has attracted value when considering the stock value subject to the ownership buyout offer.
A comprehensive strategy capable of implementing change in all Stop & Shop locations with the objective of bringing about a transformation that can secure and retain the competitive advantage via improved performance, coordination, and innovation can be achieved using process management techniques and a brainstorming getaway for management of Stop & Stop stores where managers can go on a retreat and talk about ideas to improve the integration of operations and brand recognition of their store in their market.
Such questions as, is our target market the same in our market? If not, what is different about the target market where your store is operating relative to my own? Are we streamlining processes? Why can't I provide hours to your employee who put in a request into the PeopleSoft system that they would like more hours? I cannot hire more employees but can use the extra hours by rotating your store employee at my store a few nights per week. These types of discussions can occur, and whether Stop & Shop management decide to elect such ideas into operation is mute.
By facilitating the arena to generate ideas that management can analyze further and study the potential impact of, Stop & Shop can determine whether the ideas proposed are sufficient to warrant further investigation, or if the store managers were creative and worked the financial aspect of the proposal and derived a pro-forma proposal that described the cost and potential revenue behind their idea, the management may decide to move forward with proposals derived from these collective groupthinks.
Achieving competitive advantage through the supply chain is an area where Stop & Shop has already succeeded and currently seems to maintain a competitive advantage in. In many areas, Stop & Shop has replaced the A&P supermarket stores which were at one time prolific and the main choice of many middle class consumers.
The choice to outsource non-core operational activity can save the organization millions of dollars over all stores over the course of the year. Payroll and the HRIS function of the operations can be outsourced which will assist to achieve optimal coordination and cost reduction of inter-functional operational processes and inter-organizational collaboration. Inter-organizational collaboration is achieved via the use of the software rather verbal discourse. Workers will communicate via inputting into the software work schedules available and the management will review the availability and generate a schedule based on hours provided.
If a worker requests more hours than is available at their current location, a manager can request to employ additional workers from other stores that have trained workers that want additional hours. This strategy does implement a strong sense of change in how business operations work. This improved performance, coordination and innovation is designed to increase performance at nearby stores that have a surplus of workers that wish to work extra hours.
The generating of extra workers in stores where there is not many skilled workers enables management to limit hiring and fill the worker void with workers from other stores that are already trained.
The competitive advantage achieved by improving performance, coordination and innovation is unique to the grocery store chain, as these operational variables tend to be hard to quantify. Innovation at a grocery store does not necessarily quantify into a large amount of revenue generated. Innovation at Apple Inc. however, will generate plenty of revenue as the new I-Phone is an innovative product and that product has a large revenue stream behind its production.
Process Improvement seeks to establish a systematic balance in the operations of the organization to reduce variability in all major and minor functions that add value to the firm and drive delivery of the products and ultimately the service of providing a quality grocery experience.…