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Oliver's Market Case Essay

Decent Essays

Case 3: Oliver’s Market

1) One key element of Oliver’s Market strategy is to be the finest local gourmet and natural food store in the marketplace, which takes the respective customer base into consideration. That is why the store in Santa Rosa has been set up differently so as to match the more upscale clientele. Another important element of their strategy is the emphasis on delivering value to their customers amongst the perception of quality. In order to stay competitive, Oliver’s Market adopted a plan to beat local competitor Safeway’s prices by 8 to 10% on everyday goods. A similar strategy was used to compete with the prices on ‘natural foods’ found at Whole Foods Market. Although to stay in line with their overall strategy, …show more content…

Another competitive advantage is the excellent customer service as well as the willingness to provide customers with any products they request. Besides, the engagement to support the communities which are served by the store, helped to gain a loyal customer base.

4)

| 2000 | 2001 | 2002 | 2003 | 2004 | Gross profit margin(for both stores) | 34,04 % | 35,48 % | 36,90 % | 36,37 % | 36,23 % | Net profit margin(net return on sales) | 3,71 % | 6,24 % | 6,49 % | 3,81 % | 2,58 % | Return on assets | - | - | - | 24,45 % | 16,89 % | Return on equity | - | - | - | 50,25 % | 31,66 % | Return on sales(operating profit margin) | 3,19 % | 5,77 % | 10,34 % | 3,57 % | 2,38 % |

Current ratio | - | - | - | 2,65 | 2,80 |

The Gross profit margin stays relatively constant at around 36 %. However, there is a slight rise from 2000 to 2004.
The Net profit margin increased in 2001 and 2002 but declined sharply in 2003 and even further in 2004.
The ROE is actually very good in comparison to other market participants especially in 2003, but dropped significantly in 2004. Likewise the ROA dropped. Due to the fact that there was no decline in sales, the constantly rising operating expenses can be seen as a reason.
The ROS had its peak in 2002, but is decreasing very sharply since. This shrinkage may be due to the pricing strategy, which is not very stringent.
With a current ratio

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