R. foster: Kroger Synopsis
Product expansion is an issue that is identified in both the scenario of Global Communication and Kroger. A product expansion option for the retailing industry occurs when a retailer develops a new retail format (Moon, 2005). For manufacturers, a new product development option means that it introduces a new product, though a new product could be new to the company, the market, or the industry (Moon, 2005). Global Communications needed to expand their line of products that could make them the leading resource in the telecommunications industry. A similar process happens to the retail industry. For instance, in beginning, the concept of a hyper store, which carries both traditional discount store merchandise and supermarket merchandise, was totally new to the retail industry (Moon, 2005). Many retailers doubted its success and its impact on the retail industry (Moon, 2005). On the same token, though the concept of a hyper store is not new to the industry, it can be totally new to a traditional discount store or a traditional supermarket (Moon, 2005).
Kroger responded to the issue of product expansion by developing a new retail format option.
Kroger Co. decided to develop a new retail format option. However, it is involved in basically all types of retail formats, supermarkets, multi-department stores, convenience stores, fine jewelry stores, manufacturing plants and supermarket fuel centers (Moon, 2005). It also developed many retailer names. As of 2003, it uses two dozen store names in addition to its original name, Kroger (Kroger 2003 Annual Report) (Moon, 2005). In terms of a standardization and customization strategy, Kroger leans toward a customization strategy in the U.S. market (Moon, 2005).
The outcome of the company’s response to the issue is that Kroger has become one of the leading supermarkets in the United States. Though in 2003 it was the third largest retailer in the U.S., with sales of $53.8 billion, it has no...