Lolas Market: Capturing a New Generation

This is a high-interest case because of students familiarity with supermarkets. Students will also have an opportunity to consider and debate about the size and power of Hispanic and Millennial consumer segments. The Lolas Market case is thus one that will certainly trigger lively classroom discussions over staying the course with a successful strategy that is based on maintaining tradition, versus evolving Lolas strategy to serve a new customer-market segment.

Students should develop an appreciation of the need for companies to tailor a strategy and shore up their dynamic capabilities to contend with changes in customer power.

Before beginning this exercise, you will need to read the Lolas Market case.

What are the strategically relevant components of the U.S. supermarket industry macro-environment?

Select yes for those statements below that are accurate and choose no for those that are not.

a. Consumers' attitudes about food is trending toward purchasing more organic food products and local produce. (Click to select) Yes No

b. Because this industry is unduly impacted by unpredictable agricultural conditions, food prices are volatile, and growth in the produce category may be negatively impacted in times of shortage. (Click to select) Yes No

c. The supermarket industry is negatively impacted by its slow adoption of technology as a channel to purchase groceries. (Click to select) Yes No

d. Legal and regulatory forces will limit the growth in this industry due to too many trade agreements. (Click to select) Yes No

e. The wealth of the Hispanic entrepreneur market is heavily contingent on zoning laws, permitting the creation of Hispanic-owned businesses that contribute to a thriving local economy. (Click to select) Yes No

f. Sociocultural and economic forces are major determinants of the rate and pace of growth in the U.S. grocery industry as a whole. (Click to select) Yes No

What factors are acting to intensify/weaken rivalry in the supermarket industry?

Select yes for those statements below that are accurate and choose no for those that are not.

a. Rivalry among supermarkets is strong and shows no sign of abating. (Click to select) Yes No

b. Discounts offered through online shopping and/or at brick-and-mortar stores tend to increase competition. (Click to select) Yes No

c. Because consumer switching costs are high, there is low threat of consumers going to a different competitor. (Click to select) Yes No

d. Rivalry among supermarket chains is moderate to strong. (Click to select) Yes No

e. The rise of nontraditional competitors such as Wal-Mart and its newly acquired Internet retail subsidiaries and the connection between Amazon and Whole Food Markets further intensify competition for the national and regional supermarket chains. (Click to select) Yes No

What factors are acting to intensify/weaken the bargaining power and leverage of suppliers in the supermarket industry?

Select yes for those statements below that are accurate and choose no for those that are not.

a. Many commodities in the supermarket industry are always in short supply, forcing supermarkets to heavily rely on a small number of suppliers. (Click to select) Yes No

b. Suppliers have moderate to high bargaining power in this industry. (Click to select) Yes No

c. Supermarkets will have a difficult time and incur high costs by switching to new suppliers. (Click to select) Yes No

d. Nearly all supermarkets are reliant on external manufacturers and food distributors for products to sell, and this strengthens the power of suppliers. (Click to select) Yes No

e. Producer power does not represent a significant threat to the profitability of supermarket chains, except perhaps in specialty foods such as olive oil, spices, and health items. (Click to select) Yes No