Strategic analysis of Shoprite Holdings Ltd in South Africa

The report is based on Shoprite Holdings Ltd. an investment holding company. The company is a South Africa-based business firm, which is engaged in retailing as well as whole selling of food products. The company is operating through 4 segments, which are Supermarket RSA, Supermarket Non-RSA along Furniture plus other operating segments. The report aims to evaluate the business environment of the particular organization along with its strategies. The report also shed adequate focus on a different level of management in the organization along with the responsibilities and skills that correspond to each level of management. Besides this, it also focuses on different types of planning undertaken at the various management levels of the organization along with the role of the organization to and in the community (Griffin and Pustay, 2020).

Vision, mission, and objectives of Shoprite Holdings Ltd 

Vision: The Company’s vision is to build a better future where there are ample scopes for the people to improve. Besides this, the vision of Shoprite Holdings Ltd. is to be regarded as the most preferred shopping destination for consumers for both food and non-food products for its affordability and accessibility.  

Mission: The mission of Shoprite Holdings Ltd. is to make sure that the company sells its products to the customers of the firm at the lowest possible price and within reach of the target customers and hence, the company’s stores are located in the places, where the customer can reach easily.    

Objectives: The key objectives of Shoprite Holdings Ltd. us to avail foods as well as household items to the entire African communities at the lowest possible price and in an international level shopping environment to provide them a world-class shopping experience. Moreover, the company is also enthusiastic to locate its stores within the reach of the customers so that they can reach the stores easily (Shopriteholdings, 2021).

Internal business environment of Shoprite Holdings Ltd 

The internal business environment of Shoprite Holdings Ltd. includes the factors related to the structure of the organization and based on these factors the Board of Director (BOD) of the company make vital decisions. The management decisions or the decisions of BOD support the company to run in the right direction and these are also important for keeping effective control over the organization. The internal business environment of the concerned company is comprised of the resources of the organization. Moreover, these resources are vital for determining the strengths and weaknesses of the company. The competencies, as well as capabilities of the business firm, can be recognized by gauging the strengths and weaknesses associated with the resources of the company. The resource-based view regarding the respective organization is founded on the base of 3 classification criteria, which are subsequently infrastructure, human resources, and technologies. The management of Shoprite Holdings Ltd. makes important decisions for the organization based on the following elements:

Objectives: The objective of the company is to provide its customers world-class shopping experience at an affordable cost and the management’s decisions are formed based on this objective.         

Structure: The organizational structure is also an important factor to make management decisions. The organizational structure of Shoprite Holdings Ltd. indicates the ways by which the managers communicate with the people of the organization through the specific system and procedures within the company. 

Technology: Technology plays a vital role in the organization as it massively influences the supply chain of the company.

People: People are the most important resources within the company as the skill and capabilities of the people provide a significant contribution to the strengths and weaknesses of the organization. The internal environment is mostly based on the people of the concerned company Shoprite Holdings Ltd.

The internal environment of the company is greatly influenced by domestic small suppliers of the company which is in distress in the turbulent situation where the South African Currency is weakening. Besides this, rigid labor laws in South Africa also obstruct the company to remain competitive in the international market (Shopriteholdings, 2020).  

External business environment of Shoprite Holdings Ltd 

The external business environment of the concerned company Shoprite Holdings Ltd. is very critical at this moment as the fluctuation of exchange price and downsizing of the South African economy due to the outburst of the Covid-19 pandemic impose critical negative impacts on the business. The company is influenced by these external environmental factors but these cannot be controlled by the organization.

The external environment of Shoprite Holdings Ltd. is influenced by the strong competition in the food market of South Africa. The weak performance of the South African economy is also a critical factor along with the energy issues in the country. A hike in the tariff of electricity and fuel price in South Africa would have critical impacts on the performance of the company. The emergences of the Covid-19 pandemic and subsequent lockdown and social distancing norms affect the retail business as people are now more interested in buying foods online instead of the supermarket (Shopriteholdings, 2020).  

Identification and discussion on the various levels of management in Shoprite Holdings Ltd 

The company has several directors to oversee different divisions of the organization. The Chief Executive Officer (CEO) is at the top of the company and under him, there are many directors, division managers, general managers, vice-chairmen, etc. Just under the CEO of the company, there is the position of Deputy Managing Director. Under the Deputy Managing Director, the Divisional Manager and General Managers are working in this company. Further, there is Chief Operating Officer (CFO), Vice Chairman, Non-Executive Director, and Alternative Directors (Shopriteholdings, 2021).  

Discussion on the responsibilities and skills that correspond with each level

Chief Executive Officer (CEO): The CEO of the company is in charge of the overall business of the organization. The CEO of Shoprite Holdings Ltd. is thus in charge of the entire Shoprite stores across the country. The CEO has to ensure the smooth running of the business and he has power over the entire employees. The final decisions within the organization are made by the CEO.

Deputy Managing Director: The Deputy Managing Director of Shoprite Holdings Ltd. is positioned under the CEO of the company and in the absence of the CEO; the Deputy Managing Director takes charge of the company. The Deputy Managing Director does not possess the same power as the CEO but he has to ensure that everything in the organization is under control and the entire petty issues are dealt with.

Division Manager: The Division Managers of the company are responsible for managing the entire distinguish section within the organization. The Division Managers have to make sure that the entire different sections in the organization are under control.

General Manager (Marketing and Product Development): The person is responsible for controlling the entire marketing and product development-related functions in the organization.

General Manager (Furniture Division): The person is responsible for controlling the entire furniture section of this organization including the marketing, product development, and distribution of the furniture in different locations of the company.        

General Manager (Retail Investment): The person is in charge of the entire retail investment throughout the nation and responsible for controlling the entire retail investment projects.

General Manager (Group Finance): The person is responsible for managing the entire finances of the business and ensuring balanced finance for the organization to make a profit. 

General Manager (Hungry Lion): The person is responsible for controlling the entire functions of Hungry Lion a small business venture of Shoprite.

Chief Operating Officer (CFO): The person is responsible for controlling the entire operational activities within the organization.

Non-Executive Directors: The Non-Executive Directors of the company are responsible for auditing the risks associated with the company and suggesting required solutions to address those risks and ensuring that the company is operating with the same efficiency. 

Alternative Directors: The Alternative Directors are in charge of different areas in the company as well as they are responsible for ensuring that each different arena in the organization has directors (Shopriteholdings, 2020).  

Research and discussion on the different types of planning that are undertaken at the various management levels in Shoprite Holdings Ltd 

Different types of planning are undertaken at different management levels in Shoprite Holdings Ltd. Firstly, continuous improvement in the process of replenishment and prioritization of stocks, secondly, ensuring that management of different demands and supplies are conducted effectively, thirdly, improving the stock holding levels and customer satisfaction processes. Along with these, the centralized supply chain environment is established with the integration of budgeting and financial planning processes. The expansion of digital offerings and payment options are made to provide benefits to consumers. The AI-technology-driven stock process implemented help in maintaining the stocks for the organization. The monitoring of resource allocation and appropriate improvement of financial and workplace planning processes is being done to strengthen the plan types. The implementation of an industry-specific retail system strengthens innovation, diversification, and digitalization. These initiatives are undertaken by different levels of management groups present in Shoprite Holdings Ltd (Shopriteholdings, 2021).    

Role of Shoprite Holdings Ltd to and in the community

Shoprite Holdings Ltd aims to provide all communities in Africa with household items and foods at the lowest price. The long-term viable business environment is created with a solid foundation that is based on the principles of commercial business. The company is also involved itself to provide sustainable jobs for the employees and suppliers. The primary focus is made on the needs and expectations of the customers. The company is also involved to retain enthusiastic and passionate employees who are enabled to hold the community cultures together. The sustainable supply is also ensured by the working suppliers reflected food safety and cost-effectiveness. As per the recent advertisements are made by the company Shoprite Holdings Ltd, it reflects that the products and services are provided at the lowest prices to the different communities present in South Africa. Apart from this, conscious efforts are made by the company to hold the consumers. The standard metrics related to assurance of quality food provision are maintained by the company with strengthening the operational efficiencies and cost-saving processes (Shopriteholdings, 2020).  

SWOT analysis of Shoprite Holdings Ltd 

SWOT analysis reflects the analysis of strengths, weaknesses, opportunities, and threats for Shoprite. The strengths and weaknesses are analyzed as internal factors whereas the opportunities and threats are analyzed as external factors. The analyses of factors are provided below:

Strengths

Shoprite is consisting of large variations in product availability at each of the stores present in the South African market. It provides great importance to organic products in comparison to other discount stores. It consists of 300 stores that cover the South African market and the North-Eastern US market. It gains strong backing from the parent company which is known as Wakefern. The online and home delivery services are provided and also it facilitates organic purchases through the mobile application.

Weaknesses

The weakness shows that Shoprite’s presence is restricted to the eastern coast of the US which is raised due to the limitation of market shares. The revenues and profits are also limited for the company in comparison to other retail giants present in the South African market.

Opportunities

Shoprite can increase the geographical presence in the neighboring states and also it can rate the essential food products with the Calorie rating process. The calorie rating process will provide the company to create awareness related to the health-conscious feature of the product. The expansion opportunity is also present in large stores in the cities (Lee, Lee, and Jung, 2020). 

Threats

Shoprite receives a competitive threat from a large number of mom-and-pop stores present in smaller towns in South African. Besides this, the increased number of online retail players in the South African market is creating a tough competitive environment for Shoprite.   

Recommendation

The three short-term goals that can be suggested to the business are first, to attract customers to increase consumer base, secondly, to make an increase in operational efficiencies, and lastly, to increase the profit margin of the company.

The three medium-term goals that can be suggested to the business are first, to make expansion of outlets in neighboring countries, secondly, to make expansion in large stores present in cities, and lastly, to strengthen the relationship with suppliers and employees. 

The three long-term goals that can be suggested to the business are first, to increase the values of investors, secondly, to strengthen the brand name of the business, and lastly, to make an increase in the company’s shares in foreign markets other than South African market (Fedotov, 2020).  

Conclusion

The report has mined into various aspects of South African Supermarket Shoprite Holdings Ltd. and it can be ended with the concluding notes that the company’s business environment is currently not favorable for the business. However, the company has significant strengths and upcoming opportunities to build a sustainable business and grow further. Regarding this matter, the company has to adopt effective strategies and business policies.