Askew’s Foods Versus Wal-Mart

Running head: ASKEW’S FOODS VERSUS WAL- MART
Askew’s Foods Versus Wal-Mart
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1ASKEW’S FOODS VERSUS WAL- MART
Cause
This particular assignment is about the building of new Askew’s store in a better
developed uptown area which will have an impact on the amount allotted for financing. David
Askew, the chief executive officer of the company had assumed that his costs will be slightly
higher than the normal market price which was actually moderate according to him. But the
company had faced challenges and the amount exceeded the expected budget. His expectation
about the amount was that it would be higher y one- third but it actually came out to be 1.5 to
two times higher. This was a serious problem for the company as the banker and board were
aware of the time that would be taken o repay the increased amount. Moreover, the company did
not even have high gross return as compared to the rest of the industry. The main problem was
that the family members of Askew were worried of the negative impact that will be imposed on
their company and the proposed building plan in a more developed area. David was experienced
in local business and he was aware of the outgoing cash flow in the grocery sector to the
neighbouring markets of Wal- Marts (McEachern, 2017).
The Askew Company had faced strong competition in Salmon Arm from two notable
grocery stores. Out of Safeway and Overwaitea, the latter was considered as the strongest
competitor of Askew. It was a well established food chain as compared to Askew and they were
planning to build new stores too. To keep up with the competitive advantage, Askew also
followed their path of opening new stores in the developed area. The problem in the exceeding of
budget was caused as the company did not pay attention to the fact that their competitor was
more established in the market with high return. They should have considered the negative
impact that it would have on the company’s reputation before proposing the plan. In future, they
should be more attentive towards increasing their sales rather than running in the competition.
Also, the other competitor, Safeway did not reinvest in their store which caused a problem to
increase their sales. The problems of winning over the competitors is not easy therefore the
company should pay attention to improve and modify their own system before participating in
the huge market of competition they need to look into this important fact for their future
operations (Saunders, Guenther & Driver, 2013).
Answer 1