The simulation exercise placed me as a student at Corporate Strategy division of SmartMart, a retail grocery chain that combines the mission of environmental stewardship with entrepreneurial spirit with a goal to add value to all of its stakeholders.
SmartMart is experiencing a watershed moment where mass market adoption of organic products has set them up against price-leader competitors, eroding its margin and exclusivity of their organic products.
With the goal of utilizing its core competence to maintain market leadership, SmartMart has tossed their business model up to question and challenge, and, in the simulation, it was needed to settle on three key strategic choices around the topics of change in store-format, adoption…show more content… SmartMart not only believes that it has the responsibility to make immediate lives of their stakeholders better by supplying them with organic food grown without genetic modification or chemical pesticides and fertilizers in a sustainable way, but also realizes that it has to take the responsibility to make a long lasting positive impact on the environment by reducing its operational…show more content… Effective implementation of this strategy would certainly enhance the profit margin, but the existing suppliers operating in local and regional level may suffer as they do not have the capacity to level up to meet the requirements of a highly efficient supply chain.
From consumers standpoint, scaling up would certainly require some trade-offs in the quality of SmartMart’s products and compromises may have to be made for practical reasons as it may not be always possible to maintain strict conformity with organic standards for a large producer.
If the fuel price crosses $140 per barrel, turning in to a niche player may prove to be economical and it may serve the communities around the stores better. However, considering the best case scenario, where the fuel price may just break the point for a shorter period, this choice is by all accounts more expensive and may possibly erode shareholder benefit considerably, , while not adding any considerable advantage to other stakeholders. Furthermore, having local producers supply to individual stores instead of buying in large quantities from regional producers may really drive up GHG missions because of increased frequent