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,
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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
The market revolution in the United States brought a sudden change in the manual labor system originating in south and digressed to the north and later spread to the entire world. The integral part of the economic growth in the United States in the nineteenth century was a good thing that brought change in the market. In respect to the change, America took its first major step in creating the world’s most stable and strongest economy, which gave room for growth among the citizens.
During the late 1700’s, the United States was no longer a possession of Britain, instead it was a market for industrial goods and the world’s major source for tobacco, cotton, and other agricultural products. A labor revolution started to occur in the United States throughout the early 1800’s. There was a shift from an agricultural economy to an industrial market system. After the War of 1812, the domestic marketplace changed due to the strong pressure of social and economic forces. Major innovations in transportation allowed the movement of information, people, and merchandise. Textile mills and factories became an important base for jobs, especially for women. There was also widespread economic growth during this time period
ROA’s situation is defined largely by recent financials. They have demonstrated year over year decline in revenue, profit, and net income since 2003 as demonstrated in Figure 1 (below). (MSN Money, 2008)
a few percent, in 2012 the gross profit margin is the highest it has ever been
The high sales growth can be attributed to increasing SSS (same store sales) and also opening of new stores. The company is enjoying financial growth and high profitability as seen from ROS, ROA and ROE. All the ratios are showing an average upward trend and that too, over a period of several years. As far as liquidity is concerned, the company is extremely liquid and is enjoying a quick ratio of more than 2. So, it is able to easily meet its short term debt obligations and currently faces no financial difficulties. As far as inventory is concerned it is a very small part of the liquidity and thus does have any significant effect on liquidity.
6. How well is Whole Food Market performing from a strategic perspective? Does Whole Food enjoy a competitive advantage over its 3 chief rivals – Wild Oats, Fresh Market and Trader Joe’s? Does the company have a winning strategy? (points 15)
The higher the ROA the better as the company is earning more off less investment
Riordan had a gross profit margin of 17% in 2005 and 19% in 2004 meaning that the company has a net income of 17 cents for every dollar compared to 19 cents in 2004. Looking at the earnings of a company does not tell the whole story and the decrease from 19% to 17% should grab the attention
While costs have increased from $76,750,000 in 2003 to $97,870,000 in 2005, the gross margin have decreased from 33.2% in 2003 to 23.8% in 2005. The company is unfortunately in debt, but they have enough assets to cover it and will allow for the development of new products and information systems.
In terms of industry profitability, it appears that profit margins have a tendency to fall. This is because competition is high and customers tend to buy low-priced high-value items. The average gross margin and net profit margin is 37.1% and 14.3%, respectively (MSN Money, 2010).
is nearly half of that of industry average in the table 5, which suggests that it is worse at using its assets to earn profits than the average of industry. Besides, it is a little above that of Tencent, which implies that it is also worse than its major rival. Therefore, the poor assets use efficiency is one of the reasons of its low
On Sunday, October 11, 2015, I took a trip to the Ralph 's market in La Canada Flintridge.
As we evaluate Novartis financial performance over the past few years, you are able to see in Figure 1 that there has been a growth in ROA, ROS and ROE which can be attributed to greater margins. The reason for the growth in the ROA and ROS is due to increasing margins because through utilizing the DuPont Equation we are quick to notice the steady decline in ATO. Therefore, Novartis has been more focused on making more money per product, rather than selling high volume at low margins. Throughout the time that Novartis has been increasing its profitability per product, there has also been a fluctuation in the EM. While the EM has been fluctuating over the past 5 years, you are able to determine that it is declining. The decline can be attributed to the fact that with the
The gross profit margin will take into consideration first. Because after gross profit, there are a lot of expenses need to be deducted. Which means the low gross profit margin might be a drawback for a business and that should be avoided. 71.2% gross profit margin was presented during 2014. It means that for every £100 of revenue made, the gross profit is £71.2,so it is a good sign for Burberry company and its shareholders. Comparing to 2013, the figure was decreasing by 1.7%.
From 2008 to 2010, Sara Lee’s net profit margin has trended positively from loss to profit. In 2010, every $1.00 in sales provided $0.05 in net profit. This shows