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Veritas: The First “Real Food” Supermarket Case Solution & Answer

Veritas: The First “Real Food” Supermarket Case Study Solution

Section 01: Strategic Direction

About Veritas

Veritas  is one of the leading and valuable supermarket chains of organic products of Catalonia, which was established in 2002 by  Silvio Elias,with an aim of bringing the best possible food to everybody and to offer the highest variety of organic products at the best prices. This is how the company is committed to the tastiest and healthiest food. The founders of the company intended to generate power and volume, thus driving down the product’ prices that previously constituted a significant barrier to the organic product’s consumption.(Urriolagoitia, 2020).

The extensive product offerings of the company has helped in penetrating different customer segments. The company has a strong market leadership position, which has helped it in rapidly scaling the new product’ success. The success of the company was fueled by the reduction in price differentials, dropped from 50-100% to 20%, driving more interest of customers towards the organic products. Another factor was creating awareness among customers to standardize the products’ demands, changing the store’s image and turning the stores’ staff into educators.

Furthermore, the continued customer engagement, expansion in terms of number of stores, continued feedback from customers, an in-depth knowledge and understanding of market dynamics and changing trends and guiding conscious customers towards living a healthy lifestyle are the Veristas’ key considerations, which allows it to generate high revenue in the long term.

Veritas secured its certification as one of the first B-Corporations of Spain,and started generating healthy profit returns with the growth rate of 15 and 25 percent, picking up the pace of expanding the business operations by opening new stores and catering to a wider customer base.

Corporate Governance

The strong leadership at Veritas underlies its continued growth, success and governance. Maintaining the quality of the products is the company’s core consideration, keeping in mind the increased awareness of issues underlying the food safety and health, making the customers more willing to pay extra penny for the high quality and healthy products. Thus, the company accelerated its efforts on optimizing the products’ formulation in order to provide improved nutritional properties and better quality to its customers.

The products offered by Veritas are strictly adhered to the environmental regulations,and its products are proved to be healthy as a consequence of organic production. Through consistently implementing the quality governance; Veritas ensures better business, increased cash flows, high loyalty of customers, healthy workplace, satisfied employees and so forth, which allowsit to provide high quality & value-added products to its customer,meeting their quality requirements.

Stakeholders

The company’s stakeholders include:society, customers, employees, investors, accreditation bodies, government and public authorities and partners, including: sales intermediaries, suppliers and subcontractors. The company has responsibilities towards each of its stakeholder, which are as follows:

Society:

Towards society, the company has a goals of improving the quality, reducing the risks, protecting the environment, ethical conduct & human rights and consumer protection.

Customers:

The company is committed to delight the customers by providing  high quality organic foods,full of nutritional properties. By doing so, the company aims to fulfil the goals of service quality, operational excellence and ethical conduct.

Employees:

The company ensures the provision of training and development of employees with core consideration over enabling them to learn precise skills & knowledge to improve their productivity and performance. Whereas, the development programs of employees involve the more expensive growth plan of employees for the future productivity and performance rather than an immediate career role improvement. The organizational values towards employee’s growth and productivity include: culture of inclusion and diversity that fosters an innovative and a creative workforce.  The company is also engaged in occupational health and safety practices, in order to improve the health and safety performance, to improve its business efficiency and for employees’ satisfaction.

Government and public authorities

The company makes huge contribution in the growth and development of the economy as a whole, as a result of creating the employment opportunities and respect for the environment and security.

Governance Mechanisms: Board of Directors

The governance system of the company ensures the clear distinction between oversight functions, decision making and strategic functions of BODs, whose members act as a collective & the executive and operational functions, which are the responsibilities of the CEO.

The board reviews the composition on the regular basis, to make sure of having a balanced profile within the scope of procedures governing reappointment, co-operation and appointment of directors& as a part of its exercise of self-assessment.

Aspirations

The most aggressive and longest-term goal of the business is to provide organic food to the customers at the best prices, and to become one of the leading and valuable Spanish organic food retailer. Eco-organic is recognized as one of the ecological supermarket chains, established more than 10 years ago with an ultimate goal of boosting the market of healthy food.

Mission

The company’s mission is to make the organic food more affordable and accessible to the people. Additionally, the company aims to serve the wider base of customers through differentiating its product offerings and quality, developing a strong competitive and leading position in the market. The primary focus of the company is over offering the food is proved to be more healthy and affordable.

Strategic Vision

Being a purpose-driven organization; Veritas’s vision is to become the organic food leader in Spain,through being responsive to the diverse needs and preferences of the customers and satisfying and delighting them on continuous basis. Additionally, the co-founder of the company has a vision to lead the highly competitive market by expanding the business operations in the international markets and generating higher returns and seizing the market share.

Values

The new philosophy and expansion policy of the company hinged on the real food concept with its underlying values, such as: local sourcing, taste, health, environmental care and responsible consumption. The underlying values of the company include the provision of all-natural, high quality and organic food, customer satisfaction, operational excellence and promotion of the community welfare, health and nutrition.

The company has concerted its efforts over offering high quality and nutritious food items that tend to enrich the lives of customers to a great er-extent. By Focusing on the quality and organic food offerings; the brand has become the most preferred choice of the customers that tend to leverage the customers’ insights and market leadership successfully through its commitment to deliver the high quality products on broader scale.

Corporate Social Responsibility

In sustainable development, Veritas ensure to serve the society by improving its quality, reinforcing the safety and protecting the environment. In 2015, the company received its B-Corp certification that tends to measure the entire environmental and social performance of the company. Additionally, the company meets the highest standards of environmental and social performance, legal accountability and public transparency, which balance its purpose and profit. Furthermore, the company has been accelerating an international culture shift in order to build a more sustainable as well as an inclusive economy.

In an agreement with ENI; Vertias has signed the memorandum of understanding, the agreement foresees the realization in the reclaimed and decommissioned area of Porto Margrethe, of the plant, which tends to apply the waste in order to fuel the technology to convert the organic solid waste into bio-methane or bio-oil.Vertias is recognized as a multi-utility company,operating in the treatment, enhancement and collection of the waste in the Venetian territory. By harnessing the power of the business;Veritas uses the growth and profit as means to the greater profit: positive-impact for the communities, employees and environment as a whole.(Officials, 2018).

Section 02: External environment

The analysis of the External Environment of the European organic food market is primarily based on the determination of the factors that impact the business operations. Such factors mainly include the following:

Economic Technological

Political-Legal

Socio-cultural Natural Environment
7 percent growth rate

Around a 2.1 percent decline in per-capita spending

56.6 percent increase in the sales of organic food

Less expensive conventional products

Less expensive logistics in Madrid

Online stores

Independent online grocers specialized in of fresh organic products

The building of a mobile application

Management of  fresh products

A series of practice, cost, and bureaucracy

Control and certification of organic agricultural products

Consumption of organic food as a growing trend by trade publications

Packaged products were required to feature the logo and control code of the European organization

Bio (biological), eco (ecological), organic, and sustainable products were sustainable

The double consumption rate of organic food per capita

Substantial increase in interest in organic products

High spending on better quality food

Change in consumer preference i.e. towards organic products

Highest population, construction, and per-capita growth rate in Madrid

Environmental and animal welfare issues

Use of unpainted, natural materials, and energy-saving lights

Local producers for cost-saving, environmental, and ecological reasons

Provision of values like environmental care, biodiversity, local sourcing, taste, health, conscientious

Economic

The growth rate of the European organic food market was around 7 percent from the years 2010 and 2014 i.e. exceeding 26 billion by 2014. From the year 2011-2015, the average per-capita spending of the people on conventional foods and beverages had significantly declined in Spain, i.e. by around 2.1 percent, with an increase in the sales of organic food and beverages by around 56.6 percent. The difference between the conventional and organic prices remained uneven, but the comparison of the prices represented conventional products as less expensive except for fresh food, which required heavy investment in bulk formats, seasonal sales and local suppliers. From the logistics perspective; the expansion or opening a store in Madrid was considered to be less expensive in comparison to opening a shop in Puigcerda – a city in the Catalonia Pyrenees………………..

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