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H-E-B Own Brands Case Solution & Answer

H-E-B Own Brands Case Study Solution

Introduction/Background

H-E-B, is one of the dominant and leading independent food retailer as well as the largest private employer in Texas, which was established in 1905 with $60 investment. Nevertheless, in an effort of staying ahead of the digital and traditional retailers and keepingthe customers satisfied with the demands that have been evolving with the passage of time;H-E-B has been strengthening its competitive edge through creating shared value on continuous basis.The company has more than 200 stores in South Texas, a sizable footprint compared with its presence in other states, and a network of local supplier. The pillars of business success, include: providing exceptional and value-added customer experience, financial strength, great employees & a community impact.(Springer, 2020).

Statement of the Problem

A leader in its market:H-E-B, is concerned about the robust and fierce market competition, particularly from Walmart, which has aggressively entered into the markets of Texas, with a series of Supercentres. Specifically, the water category of H-E-B’s Own Brand’s water percentage is -5%, coupled with the problem that the company hasn’t marketed the product accurately as imported spring water from Canada, which would have improved its market share from Evian – a French imported water. The problems with positioning andmarketing of Glacia includes; the customers were unaware of the origin, the product competes with Evian but pricing gap is wider, leading to perception concerns and beingshelved next to the local pricing water – Ozarka. Additionally, the company is concerned about increasing the sales in context of the overall Own Brand strategy due to the emergence of Walmart into the grocery industry.

Analysis

SWOT

One of the company’s greatest strength is that it owns more than 350 stores in Mexico and Texas. The Own Brands could be considered as the key to success for the company, as they account for 19 percent of the H-E-B sales, and one that earns 50% gross margin higher than the national brands. The excellence & sustainedfocus over assortment on private brand and relevance,guarantee the company with long-term growth & success. Similar to every supermarket; H-E-B strives for friendly people, low prices and convenient locations. By & large, it has been reasonably successful with these objectives. In contradiction to strengths; the company has a strong presence in Mexico and Texas, but limited presence in other states, resulting in the loss of beneficialinvestmentopportunities. With an increasing market competition; the process of competitive pricinghas become complex.

The company could exploit the opportunity of expanding the business operations outside the US, in orderto drive the sales growth and achieve the competitive advantage. As the time is passing by, the customers are getting promiscuousin their shopping &exhibiting the higher possibilities of easily switching from one channel or brand to another. The company could make investment in technology & automation, in order to have an efficient leverage growth. The threats of the company include: digital disruption, evolving expectations and needs of the customers, inspiring and retaining the employees, modern marketing, maintain product quality, compete with forward-thinking, fast-moving and aggressive rivals. In addition, the consumers’ embrace of digital media would make retail competition more rigorous. The effect of digitalization includes sky-high expectation of customers, hence making it more challenging for the company to retain the position ofbeing the market leader (Jess Huang, 2019 ). The model can be seen in Appendix A………………………………….

 

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