The Ede Family Business

Mrs. Cynthia Ede recently left her job and is planning on setting up a supermarket in her neighborhood, Ajah area of Lagos. She and her husband have a total savings of ten million naira (N10,000,000.00) reserved for her new business. Her husband, Mr. Ede is an engineer with a mid-sized construction company based in Lagos. Being blessed with four children, they could hardly survive on Mr. Ede's income alone. Hence, there is need for Mrs. Ede's supermarket business to quickly become profitable and supplement the husband's income.

Background

Mr. & Mrs. Ede live in the low-mid income area of Lagos (Ajah). They plan to set up their supermarket in this neighborhood. Due to cashflow constraints, most low-mid income families are generally known to be price sensitive. Mrs. Ede is aware of the existence of one mid-sized supermarket and many other small-sized provision stores in their neighborhood. In addition to these, there are some other big supermarkets such as Prince Ebeano and Blenco located on the major road to their community.

Most of the supermarket suppliers are situated in Lagos Island market, Ore-Arin Market. Few of the suppliers deliver to the retail outlets, especially the mid/big supermarkets. However, for majority of their supplies, they need to figure out how to obtain goods from the Lagos market. A major challenge of the supply chain is the issue of fake products. Dubious suppliers allow the introduction of fake products into the supply chain. This could lead to a lot of customer dissatisfaction. The infrastructure in Lagos is poor - poor road networks, with lots of traffic jams; and poor power supply, forcing businesses to install individual power generators. Security is also a very serious concern. Most of Mrs. Ede's potential customers are very sensitive to quality of goods and expiry date of products with limited shelf life. The business is further complicated by the perishable nature of some of the goods such as snacks, ice creams, etc. The Ede's have two family cars - a Mazda 625 and a Toyota Siena.

The Challenge

The Ede's want to hit the ground running. Hence, on learning that you are a graduate of Lagos Business School (LBS), they approached you to design an operations strategy for their new business.

Design an operation strategy for the supermarket business.

Hint: Make reasonable assumption where necessary. Such assumptions must be clearly stated.