Holmes Institute HI6006: Competitive Strategy Report - Super Selectos

This report analyzes the competitive strategy of Super Selectos, a food retail chain in El Salvador, focusing on its competition with Walmart. The report begins with an executive summary and table of contents, followed by an introduction to the competitive dynamics within the food retail industry. It presents a case summary outlining the general environment, including political, economic, and social factors, and the competitive landscape. Strategic issues such as competition from multinational chains, lack of resources, and product commonality are identified. The report then explores theoretical concepts like Porter's Five Forces and strategic management, discussing how Super Selectos can leverage cost leadership and differentiation strategies to gain a competitive advantage. The analysis includes an assessment of market commonality, resource similarity, and the bargaining power of suppliers and customers. Finally, the report suggests approaches to resolve the strategic issues, such as implementing cost leadership and differentiation strategies, and emphasizes the importance of understanding consumer behavior and market demands to ensure competitiveness. The report concludes by highlighting the importance of strategic planning and adaptation in the face of competition.

Running head: COMPETITIVE STRATEGY
Competitive strategy
Name of student
Name of University
Author note

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Executive summary
The report was prepared to discuss about the competitiveness within the food retail
industry where Super Selectos faced some major strategic issues due to the presence of
competitors like Walmart, which had been a popular and established company within the
retail sector for a long time. To deal with the issues and maintain competitiveness, the
company managed to implement cost leadership and differentiation strategies, which helped
in overcoming the issues like commonality of products and market, furthermore allowed the
company to stay competitive and generate higher revenue in business as well.

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Table of Contents
Introduction................................................................................................................................4
Case summary............................................................................................................................4
Identification of strategic issues.................................................................................................5
Theoretical concepts...................................................................................................................6
Approaches to resolve issues.....................................................................................................8
Conclusion..................................................................................................................................9

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Introduction
The report is presented to discuss about the aspects of competitive strategy related to
the dynamics within the competitive food retail industry. The report will present an idea
about how the local food retail chain named Super Selectos from El Salvador can manage to
stay ahead of the competition and win the war against the multinational food retail chains.
This will also focus on the major strategic issues and theoretical concepts used to overcome
these issues and ensure smooth business functioning all throughout (Madsen and Walker
2015).
Case summary
Based on the case study, it is found that the general environment that has impacted the
functioning of Super Selectos include the political, economic, social, demographic as well as
the global market segments. Based on the general environment, the rate of poverty is quite
high, i.e., nearly 40 percent, while the US economy has been growing, which has favoured
the creation of huge amount of employment scopes and opportunities. There has also been
commonality within the market as well as similarity of resources, which has caused
redundancy, as found from the analysis of competitors (Block et al. 2015). Often it has been
seen that the products of Super Selectos face competition due to the emergence of new
entrants or substitute products provided by the other retail company named Walmart. It is
also because while Super Selectos is a major food retail chain in El Salvador, Walmart is one
of the largest retail company in the whole world. From the case scenario, it is understood that
both these two companies have been compared in terms of functioning as well as the
resources and competencies possessed, which has made these companies become the major
retail companies within the industry (Huo et al. 2014). Based on the analysis of external and
internal environment, it was found that the company possessed strong leadership and a

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positive brand image and name, which has helped in opening up new stores and at the same
time, generated good amount of revenue. The company has also adopted the Hi-low pricing
strategy and differentiation of markets have further contribute to the marketing actions and
strengthened business performance and efficiency too. There have been good amounts of
scopes and opportunities, which has helped in targeting the right market segments and at the
same time, delivered good quality products and services for meeting the clients’ expectations
and ensure attraction of more clients (Hernández-Perlines, Moreno-García and Yañez-Araque
2016). In spite of the strengths, there were few weaknesses as well such as the power
bargaining power when compared to Walmart and also the lack of resources is considered as
weaknesses. Few of the major threats include the presence of large multinational company
like Walmart, rivalries undertaking approaches to expand business locally as well as globally
(E. Armstrong 2013).
Identification of strategic issues
From the strategies implemented by Super Selectos, the company has maintained
good financial condition and remained a market leader by assessing the market conditions
and dealt with the strategic challenges. There are multiple strategic issues such as competition
by multinational retail chains and lack of resources possessed by the organisation, which has
also contributed to the poor management of business functioning along with poor revenue
generation too.
Competitive Strategy
The major strategic issue could be the high competition in the industry with the
presence of multinational food retail chains, which have also offered similar kinds of
products and services at much reasonable prices (Bereznoi 2015). The company also faced
few issues like lack of wide variety of products and services, which has also contributed to

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the lack of competitiveness within the industry for Super Selectos when compared to
Walmart. Another major risk that has emerged is the similarity of resources and products
along with the market within which the company has competed with its rivalries. Another
major issue is that as both the companies, i.e., Super Selectos and Walmart have been
operating within the same food retail industry in El Salvador, so the competition is mostly
faced by Super Selectos due to the high market commonality though the financial resources
similarity is quite low when compared to Walmart (McGrath 2013).
Competitive pricing strategies
There are other strategic issues that have come into limelight such as the offering of
products at lower prices to the customers and due to thus, the raw materials and resources are
purchased from the suppliers by the companies at lower prices. This often deteriorates the
relationship between the business and its suppliers, furthermore hampers the contractual
negotiations and obligations (Dobbs 2014). The problems related to stocking and price
fluctuations are other issues that have been created while establishing relationships with the
suppliers and this diminishes the level of trust and loyalty about the brand from the
perspectives of suppliers too.
Attraction of clientele
The other major strategic issues could be the change in demand and expectations and
also the buying behaviours, which enables the company to implement changes and this can
become a challenging task for the company to do so, furthermore adopt to the local
conditions and deliver products and services accordingly (Dälken 2014). The demands for
healthy food options have increased to a large extent, which also influences the buying
behaviours of consumers. To deal with kind of issue, the businesses within the foo retail
industry must focus on introducing new products and services that are healthy and safe for

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consumption and this can definitely influence the buying behaviours of consumers (Tanwar
2013). This could not only help in attracting more customers, but would also help in gaining
higher level of profit and competitive advantage in business too.
Theoretical concepts
With the management of strategies, it would become easy for the company to stay
ahead in the competition, furthermore remain competitive by overcoming the threats posed
by the multinational companies within the food retail industry. The strategic management is
closely linked with the set of decisions made and actions undertaken for the implementation
of strategies and to accomplish the goals and objectives to remain competitive within the
concerned industry (Liu and Zhang 2013).
The Porter’s five forces theory or model can be used for managing the business
functions through assessment of various forces including the emergence of new entrants in
the market, substitute products and services in the industry, buying power of consumers,
bargaining power of suppliers and competitive rivalry. The use of this theory or framework
can be beneficial for determining the external factors as well as the various forces associated
with the business functioning within the concerned industry (Davcik and Sharma 2015). It
could also allow the company to focus on a strategic direction and ensure dealing with the
competitive forces effectively for remaining competitive within the food retail industry of El
Salvador. Lu et al. (2014) also suggested that the saturation of market needs to be considered
by Super Selectos for assess the level or degree of competition in the industry, furthermore
utilise the strengths of the company properly to maintain good position as well as gain a good
amount of market share for gaining competitive advantage in business. The generic strategies
and intensive growth strategies should be formulated with the use of this theory and thus
ensure growth of business along with remaining competitive within the business environment
(Lu et al. 2014).

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The force of competitive rivalry for Super Selectos is quite high, because of the
presence of large food retail companies like Walmart and others, which have competed
within the industry. The variety of companies and the products offered by these companies
also pose significant challenge to gain competitive advantage, furthermore make the company
aggressive to attain competitiveness (Nagle and Müller 2017). The buying power of
customers is moderate, because being a major food retail company in El Salvador, the
company has managed to keep the customers satisfied with the good quality food items
delivered, which has influenced and encouraged them to make purchases consistently.
According to D. Banker, Mashruwala and Tripathy (2014), The emergence of similar kinds of
products and services though has sometimes made the customers to switch on to some other
food retail company, though the potential customers have still managed to gain the trust on
the brand, due to which, the sales are high and revenue generation capability too (D. Banker,
Mashruwala and Tripathy 2014).
The bargaining power of the suppliers is low, because there are multiple suppliers
available within the industry from whom, the raw materials and resources can be acquired,
which has also helped in strengthening the relationship between the business and its
suppliers. Due to the availability of many supplier within the industry, there has been
difficulty for the suppliers to pose any significant threat to the strategic growth and
development of the company, i.e., Super Selectos in El Salvador. The threat of substitute
products is high, because with the presence of multiple multinational food companies within
the food retail chain, numerous goods similar to what Super Selectos deliver have emerged
(Madsen and Walker 2015). Due to this, there has been commonality of products as well as
the market segments that are targeted by the companies within the concerned sector. This
could often pose a significant challenge for the company to remain competitive within the
industry while the emergence of new entrants in the market that are similar to the products

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delivered by the company or even new products that possess some different features and
attributes could also affect the ability of the company to sustain competitive advantage
(Block et al. 2015).
Approaches to resolve issues
To resolve the strategic issues faced by the company, i.e., Super Selectos needs to
implement some new strategies such as cost leadership and cost differentiation strategies for
ensuring that the status of competitors are assessed and then the right prices are set to attract
the customers and influence their buying behaviours too (Huo et al. 2014). The cost
leadership strategy should allow Super Selectos to assess the prices set for the similar kinds
of products by other companies and then lower down the prices of the products to ensure that
customers could switch on to Super Selectos rather than making purchase from the other
companies within the competitive marketplace. The differentiation strategy should also
enable Super Selectos to manage differentiation by adding some distinguishable features to
the products and services, furthermore ensure creating some positive mind sets among the
customers regarding the brand and its products (Hernández-Perlines et al. 2016). This would
also resolve the issues associated with product and market commonality, furthermore enable
the customers to differentiate between the products of Super Selectos with the other company
products, which could further influence the buying behaviours and purchasing decisions
made by them too. Most importantly, Super Selectos also needs to assess the target markets
properly to analyse the behaviours and needs of consumers. This could allow for
understanding what benefits could be provided to them and how they should be kept satisfied
as a whole (Bereznoi 2015). With the assessment of their needs, greater demands would be
created in the market, which is considered as a major driver to the growth and economy of the
nation as well as for improving the financial condition of the business too within the
competitive business environment (McGrath 2013).

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Conclusion
The report was prepared to discuss about the competitive business environment and
also the major strategic issues that resulted from the high competition in the marketplace of
El Salvador. The major issues resulted due to the similar kinds of products and services
available and also the competitors targeting the same market again and again, which resulted
in major issues associated with poor revenue generation and unable to attain competitive
advantage in business as well. This often resulted in lack of market potential and failing to
draw in enough clients, which also affected the revenue generation capability and staying
behind the rivalries with the concerned food retail chain industry. Super Selectos in El
Salvador made sure to assess the market conditions and determine the prices of products set
by the competitors, which further helped in meeting their needs and influenced them to
remain inclined to the brand and gain trust, which should also prevent them to switch on to
some other brand within the food retail industry.

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