Reference no: EM132169510

Fred’s Grocery was a small grocery business located in an affluent suburb. It suffered sales declines when a large supermarket chain opened in the near neighbourhood.

Fred initially considered lowering prices and adding new items to compete. This would have meant greater expense and lower margins. However, as a result of a family discussion about the vision, intentions and image of Fred’s Grocery, Fred chose to respond in a less direct, less costly, less risky manner.

Fred and his family determined that what they wanted to do was to serve the convenience needs of local shoppers for specialty and last minute grocery items. This meant identifying the specific needs of a niche market and catering for the needs of that market. Fred was able, as a result of market research, coupled with analysis of his own business structure and strategies, to identify a range of products and pricing structures that would meet the special needs of local customers and would enable him to continue operating a successful business. They predicted that the majority of Fred’s shoppers would spend an average of $12 to $25 per visit, considerably less than at the larger supermarket, but that the store’s operating hours would exceed those of the supermarket.

Comment on how clearly identifying and crystallising Fred’s intentions that enabled Fred to develop strategic plans would help him to stay in business. (75–100 words)