In 1979 Shoprite Holdings Ltd (hereafter referred to as Shoprite) started from small beginnings by purchasing a
Question:
In 1979 Shoprite Holdings Ltd (hereafter referred to as Shoprite) started from small beginnings by purchasing a chain of eight Cape-based supermarkets for R1 million. Shoprite is deemed Africa's largest fast-moving consumer goods retailer, with more than 35 million shoppers per annum. According to Shoprite's 2017 integrated report, they operate a total of 2 689 stores situated both in and outside South Africa.
Shoprite's advanced distribution system and its highly sophisticated supply chain enables them to stay in control of its operations and ultimately provide customers with lower-priced products. In addition, their ongoing investment and recognition of their supply chain's strategic importance enable them to overcome economic challenges and still provide their customers with affordable retail goods.
Shoprite's distribution network consists of strategically placed distribution centres that link the flow of products from suppliers to all stores across the African continent. Shoprite is the first South African retailer to obtain the ISO 9001 accreditation for import and export handling.
Shoprite owns a large fleet of trucks and trailers that operate 24 hours a day, seven days a week. A highly sophisticated transport route planning and scheduling system optimises store deliveries and integrates the operations of the distribution centre and the transport division. Shoprite optimises transportation by reducing the number of trucks on the road.
Shoprite's supply chain partners' relationship directly influences Shoprite's optimisation initiative. Thus, Shoprite places great emphasis on promoting supply chain coordination and integration between the different supply chain partners. Working closely with the different supply chain partners to create mutually beneficial relationships is critical to Shoprite. For example, Shoprite assists small to medium-sized suppliers by allowing them to deliver products directly to their distribution centres. Subsequently, small to medium-sized suppliers do not have to invest heavily in warehousing or transportation and focus on their core competencies.
Shoprite focuses on improving levels of product availability to increase its market share. Controlling the whole supply chain has made it possible for Shoprite to
SCH4801 ASSIGNMENT 1 2022
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introduce cost-savings; thus, providing the mechanism to drive prices down daily. By controlling their supply chain, merchandise can be buffered to counter supplier out-of-stocks and volatile trading patterns while offering an opportunity to buy extra items to provide for price increases. In addition, Shoprite's supply chain presents the opportunity to re-engineer its retail stores and improve the use of space by dedicating the minimum area to storage and the maximum area to trading space.
Adapted
Compile a supply chain for Shoprite. Be sure to include the three key supply chain flows, at least one second and first-tier supplier, and one example of a first-tier customer. [No marks for Googled images of a supply chain].
There are different approaches that can be used to categorise inventory. Consider the categorisation according to the reason for holding inventory. Discuss any four categories relevant to Shoprite. In your discussion, you need to identify the trade-off decisions that Shoprite needs to make regarding responsiveness and efficiency.
2.1 Answer the following sub-question regarding competitive strategies.
a) According to the prescribed book, competitive strategies can be divided into two main strategies. Identify and briefly discuss the competitive strategy, as explained in the prescribed book, that Shoprite follows. Please motivate your answers by providing two examples from the case study.
b) Discuss the remaining competitive strategy with a relevant example from the retail industry.
Accounting for Governmental and Nonprofit Entities
ISBN: 978-1259917059
18th edition
Authors: Jacqueline L. Reck, James E. Rooks, Suzanne Lowensohn, Daniel Neely