Ahold

1. Ahold International Retailer By: Heather Steinmetz

2. Table of Contents

3. International Company Profile International “Big Box” retailer with stores in the United States and Europe Established in 1973 Ranked 184th on the Fortune Global 500 in 2010

4. Store Formats

5. Key Brands

6. Company Snapshot

7. Political Environment • Licensing and Franchising laws- O/T • (O) Joint ventures and franchising in foreign markets can be used to increase growth • (T) Countries such as the U.S. and China have very specific regulation laws

8. The Global Economic Recession-T Global Unemployment Rate – T Rise in unemployment means less consumer spending Economic Environment 2010 Unemployment Rate

9. Economic Environment Price Increase on commodities-T • Inflation for producers increased faster than it did for consumers leaving the industry with little to no pricing power

10. Socio-Culture • Improving environmental footprints and making operations more efficient-O/T • Rise of health conscious consumers- O

11. Socio-Culture-Rising Health Care Costs • Rising health care costs- O • Increase sales and gain market share since consumers are spending more in health products

12. Technological Environment • Online retailing increasing in the U.S.- O • Information obtained by the internet can be powerful sale drivers • The internet will target larger audiences of new and existing customers

14. Porter’s 5 Forces

15. Threat of New EntryLow

16. Bargaining Power of SuppliersLow Large retailers have a higher level of power because theymake large purchases of product sold to them at a lower price Suppliers spread product in many retail outlets so that it is easily available to consumers A contract with a large retailer could “make or break” a small size supplier

17. Bargaining Power of Buyers High • High number of buyers demanding high-quality products at bargain prices help keep retailers honest • Low switching costs: consumers can shop for many products at similar prices at competitor locations • Buyers are well informed about products being offered by retailers and their prices

18. Threat of Substitutes High • Retailers tend not specialize in one good or service • They sell many products and services to accompany all the needs of the consumer • Retailers offering products that are unique can have a distinct or absolute advantage over their competitors • Low switching cost • Retailers who build strong consumer brands can increase market share • Focus on maintaining high quality and private brand images

19. Intensity of RivalryHigh • The industry is mature: slower market growth and high competition for market share and growth opportunities • Focus on new growth opportunities through innovations in online retailing • Increasing trend in customer loyalty programs, promotions and advertising: battle to provide the highest value/lowest cost • Leading competitors are more equal in size and therefore able to achieve similar results

20. Blue & Red Ocean Strategy Blue Ocean Red Ocean Entry into online grocery have allowed expansions in innovation Internally Ahold is one of few to switch to the cloud-based business suite from Google Creation of smart phone and tablet apps create easier and more convenient shopping for customers Cloud-based business helps connect offices in the U.S. and Europe online collaboration of documents ,video conferencing , email, calendars and more

21. Competitive Industry

22. Highly Competitive Market

23. Key Competitors

24. Number of Stores by Region Carrefour Metro Ag Most dominant country: Germany: 958 Stores Market Rank: 3rd Most dominant county: France: 5,440 Stores Market Rank: 2nd

25. Carrefour Performance over the last 5 years

26. Metro AG Performanceover the last 5 years

27. Competitor Analysis

28. Strategy

29. Objectives

30. Assumptions/Resources

31. Online Retail booming in the U.S.

32. Competitor Conclusion The global retail industry has a large variety of competitors Carrefour focuses on expanding their market share in foreign markets and gaining ground on being the “preferred” retailer world wide Metro AG focuses on their three new private labels and recovering from the recession and continue their strong dominance in Western Europe

33. Market Analysis • Global retailing market is is very fragmented • Many segments included • Difficult to determine full scope and size • Markets are mature • Slow growth, compete on market share • U.S. retail sales: $244,887 Billion • Western Europe retail sales: €68 Billion and expect to rise to €114 Billion in 2014

34. Characteristics ofTarget Market

35. Customer Needs

36. Customer Purchases

37. Market Conclusion Market is very fragmented and divided into multiple segments making it difficult to define scope and size. Focus on low pricing and quality Meet the convenience and shopping needs of consumers Trend is moving towards online retail rather than in-store

38. Business Model

39. The Past 5 Years

40. SWOT Analysis

41. SWOT

42. Strategic Capabilities

43. Competitive Advantage

44. Internal Analysis and SWOT Conclusion Ahold’s business model for a long time has been about providing consumers with quality products at a low cost and reasonable value. Ahold should focus on the online sales of Peapod during the online retail boom Continue R & D for entering new foreign markets

45. Distribution of Sales by Division

46. BCG Matrix High Market Growth Rate Low Relative Market Rate High Low

47. Competitive Advantage Broad Competitive Scope Narrow Competitive Advantage Low Cost Higher Cost

48. Strategy Clock Differentiation Focused Differentiation High 4 3 5 Hybrid Perceived product/service benefits Low Price Risky High Margins 2 6 Monopoly Pricing No Frills Loss of Market Share 1 7 8 Price Low High

49. Strategy Clock • Hybrid • Good quality and value at a reasonable price • Low price due to • Economies of scale • Buying in bulk from suppliers • Differentiation • Private label brands • Customer Loyalty Programs

50. Grand Strategy