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Strama 1
Strama 1
Presented by:
Presented to:
MS. ARLENE SAN PABLO
April 2019
A STRATEGIC MANAGEMENT PAPER ON SAVEMORE
Table of Contents
nationwide. It has also established a very close working relationship with their customer that
they are able to provide quality products and excellent service to their customer.
Savemore target market are the general public that are in a small community or in
barangay. According to Sanford Marketing Corp., SM Retail’s subsidiary that handles the 174
Savemore stores across the country, posted revenue amounting to Php 41.1 billion in 2016.
Savemore’s major competitor is mainly Puregold Jr. or Puregold Extra which also the same
In both internal and external environmental situational analysis was made for Savemore.
It was found out that their major strengths are being part of the Country’s biggest Food Retail
Chain, one-stop shop, convenient location and having an excellent customer service that makes
consumers satisfied. On the other hand, Savemore’s major weaknesses are because of some
items’ prices are a little bit higher compared to other supermarkets and some customers
Philippines and health conscious consumers while credit card frauds as their major threats.
By using matrices to conclude suitable strategy to attain Savemore’s vision “To be the
lifestyle brand of choice leading in every community we serve.” Financial and strategic
objectives, business and organizational strategies, action plan and programs and balances
scorecard are further recommended. A proposal for change is herein established to hopefully
“We deliver world class, relevant products and services which are accessible, affordable,
aspirational and fashionable. We do this by partnering with our suppliers in a fair
manner, establishing best practices in developing and growing our talents, improving the
quality of life in the community that SM partners with.”
Using Fred David’s evaluation matrix of mission statements, a table below is used to evaluate
Savemore Market mission statement:
Components Yes No
1 Customers
2 Products/Services
3 Markets
4 Technology
5 Concern for Survival, Growth, and Profitability
6 Philosophy
7 Self-concept
8 Concern for Public Image
9 Concern for Employees
Using Fred David’s evaluation matrix of mission statements, a table below is used to evaluate the
recommended Savemore’s mission statement:
Components Comment/s
1 Customers the community. Also, it is mentioned that it is in their mission to
build a good relationship with their business partners
2 Products/Services “offer products and services that focus on quality, affordability
and convenience”. They do not only sell products, but they also
provide quality service to customers, stockholders of the
company, and their business partners.
3 Markets Savemore operates more than 195 stores nationwide. Its
target market is the general public.
4 Technology aims to provide services and products with the aid of
technological advancement and growth and innovation.
5 Concern for Survival, with the successful profitability and progress of their
Growth, and Profitability stockholders and the good bond they establish with their
business partners, it will lead to their own advancement
6 Philosophy “Here to serve!”
7 Self-concept Improving the quality of life
8 Concern for Public Image To establish a relationship with its customers by improving
the quality of life in the community and that is the general
public
9 Concern for Employees establishing best practices in developing and growing our
talents
Economic Developments
As of now the latest data on family expenses of Philippine Statistics Authority (PSA) is
the 2015 Family Income and Expenditure. It showed that the average annual income of Filipino
families ₱267,000 with an estimation of ₱22,000 average monthly income.
PSA also has data regarding the 2018 Household Final Consumption Expenditure at
current prices. The Filipino mainly spends on 12 areas and they mostly spend for food and non-
alcoholic beverages which takes 42.60% of the total expenditure. Next to the food and non-
alcoholic beverages is the miscellaneous and goods services (12.79%), then the utilities
(11.96%), furnishing, household equipment and routine household maintenance (11.14%),
education (4.26%), restaurants and hotels (4.12%), transport (3.54%), health (2.82%),
communication (2.63%), recreation and culture (1.71%), alcoholic beverages and tobacco
(1.40%), and last on the list is the clothing and footwear (1.04%).
In this case, since Savemore is a supermarket that offers variety of retail products, it
mostly offers products that the consumers spend their expenditure at.
World Population Review stated that the largest cities in the Philippines such ah Quezon
City, Metro Manila, Caloocan and Davao city also has large population.
With this information, Savemore can build or add more branches in the large cities where
they can help for the convenience of the buyers. They can take advantage of the population and
bring the supermarket near the consumers.
Technological Developments
Continued increases in mobile adaption and mobile penetration have also helped boost
online grocery sales, particularly in the developing regions according to The Nielsen (2015).
These developing countries are namely in Asia-Pacific, Middle East or Africa, Latin America,
North America and Europe. Among these developing countries, Asia-Pacific continuously
exceeds the global average for adoption of all online retailing options. These online retailing
options or e-commerce options are: order online for delivery to home; use online automatic
subscription; use a virtual market; and order online and pick up inside the store.
Due to this increasing demand of online retailing options in Asia-Pacific, Savemore can
increase their sales participating in this trend which is more convenient for the consumers. The
convenience of without going through a queue just to pay for the shopped items is mostly
preferred. Plus, consumers tend to avoid crowded places and supermarkets tend to be crowded.
Ecological Aspects
The Philippines has mostly a hot climate season, especially when it is summer. A very
hot climate can make discomfort to the consumers. They ought to look for much cooler place to
do their shopping. It is something that Savemore should mind of. Good ventilation is a factor to
have a loyal customer. It might loss customers if they experienced discomfort while doing their
shopping.
Industry Analysis
It is also forecasted that the top retailers of 2017, which is SM and Puregold, will
continue to drive strong growth and will retain their market leading positions. 7-Eleven
(Philippine Seven Corp) will have the fastest growth of all the retailers; it is expected to overtake
Robinsons and will become the third largest retailer by 2022 (IGD Asia, 2018).
Competitors Analysis
For this strategic marketing management paper, two competitors were considered for the
competitive profile matrix: Puregold and Shopwise
Puregold Price Club, Inc. or simply Puregold is a chain of supermarkets in the Philippines
that offers variety of retailing products in the Philippines with over 300 number of
locations/branches (Puregold Price Club Inc, 2017). The researchers will focus mainly on
Puregold Jr. or Puregold Extra that can be compared with Savemore. Being the said two can be
are in the same category as the Savemore, the neighborhood grocery store.
Shopwise is a another neighborhood grocery store that is known for its affordable quality,
everyday freshness, budget-friendly variety, and fast, friendly and fun service. It is said to be the
most comfortable, practical, and efficient place to shop for a wide selection of fresh goods,
groceries, clothes, toys, and home accessories, all under one roof (SHOPWISE, 2015).
Based from the competitive profile matrix above, advertising and benefits offered are
some factors to be considered for Savemore as rooms for improvement, having 3 as the rating of
each factor while 2 rating for e-commerce where focus is needed.
SM Market has really good advertising strategies. Unfortunately, there are only few that
focus on Savemore. But it can be said that, even though these advertising strategies are not
directly for Savemore, it affects the said neighborhood grocery store indirectly. Being under the
SM trademark makes it indirectly affected by those advertising strategies. It needs improvement
in this area for the reason that it should have more advertisements that focuses on it to make
people around it more aware of the establishment.
As for benefits offered, Savemore has its own benefits offered to its customers but
Puregold is being good in the benefits it’s offering to its customers like Aling Puring that focuses
on those who has a sari-sari store. Thinking for benefits that will be better than the Puregold will
be good for Savemore for it will attract more customers thus will bring more sales.
In other words, Savemore is not really active in E-commerce. That is the reason why it is treated
as minor weakness. Minor for a reason that it doesn’t affect a big part for the Savemore but it is
still needed for the growing technology and ease of buying products online.
In the external factor evaluation matrix, the total average score is above average, which is
3.02. Savemore took advantage of these opportunities: health conscious consumers and
increasing population in the Philippines, on which given a response that is superior. It is also
given a response that is above average those opportunities: self-care is becoming a trend,
increasing average annual income of Filipino families and credit card frauds. This is in response
to their company’s mission which states:
“We deliver world class, relevant products and services which are
accessible, affordable, aspirational and fashionable.”
Online shopping being a big trend in the Philippines can be an opportunity to Savemore.
Some consumers prefer online shopping where they don’t need to go to the establishment and
some prefer the online shopping and just pick it up in a certain branch. Focusing in this trend
may increase the number of customers and sales of Savemore.
Credit card fraud a can be a problem for Savemore but they are responding well in it by
having some policies about card payments in their establishments. Regarding the problem of
having unemployment rates being relatively rising, the company has a good employment system
hence the effects of it doesn’t concern Savemore.
There are three conditions that provide high intensity to Savemore. Being in the same
industry it is given that competitors of Savemore can have the same capability as what Savemore
can. They also can offer similar products and services of Savemore like points, rewards, and
good service.
Barriers to leaving the market are high because a huge investment was used to come up
with the current assets, competitive advantages, and customers of both Savemore and its
competitors.
Revenue/Sales
300
250
200
150
100
50
0
2015 2016 2017
SOURCE: ANNUAL FINANCIAL STATEMENT, SM INVESTMENT CORPORATION
SM Retail, which is comprised of market leading brands like THE SM STORE, specialty
retailing and food retailing led by SM Markets, reported growth in total revenues of 7.3% to
PHP297.4 billion, while net income stood at PHP10.4 billion in 2017. The Non-Food and Food
Group comprised 49% and 51%, respectively, of merchandise sales in 2017 and 2016,
respectively.
WalterMart and 348 Alfamart stores. A total of 341 outlets were added in 2017 across the retail
business portfolio.
The food group, which includes SM Markets (SM Supermarket, SM Hypermarket and
Savemore), WalterMart and Alfamart maintained its focus on enhancing product assortment
based on market trends as well as expanding to new territories across the country. This enabled
the food group led by SM Markets to keep its targets and maintain its lead despite the
increasingly competitive food retail environment. The food group added 180 new stores (with
Alfamart and WalterMart) in 2017, spanning full coverage of the Philippines from its Aparri
store up North to its General Santos down South. Aside from Aparri, the group’s expansion
included Boracay, Cotabato, Puerto Princesa and mostly stand-alone Savemore stores in
provincial areas. SM Markets alone expands its stores at a rate of 30 stores per year, bringing its
world-class food shopping to citites and municipalities across the Philippines. During the past
year, SM Markets continued to finetune its operations and facilities to ensure a consistent SM
Markets shopping experience of comfort, completeness, and convenience in all its stores. Its SM
Eats counter which serves best-selling ready-to eat favorites and category expansion of fresh
food, home essentials, and apparel were major factors in the group’s growth.
Sanford Marketing Corp., SM Retail’s subsidiary that handles the 174 Savemore stores
across the country, posted revenue amounting to Php41.1 billion in 2016. The three SM Retail
units’ revenues in 2016 add up to Php124.2 billion, which is 42% more than Puregold’s sales. It
maintained its strong position by opening new stores which were more accessible to consumers,
particularly through its Save More Supermarket and Alfamart.
One-Stop Shop
Savemore is a mid-format supermarket that stands alone as a neighborhood store built to
service impulse markets and smaller communities across the country. Savemore is SM's fast
expanding vehicle for introducing organized retail in areas where there is either a limited offer of
products or none at all. Most SM stores also offer additional services like ATM banking, bills
payment, remittances, money exchange, pharmacy, and even laundry services in select outlets,
ensuring the one-stop shopping convenience that the SM brand is known for.
SM Bonus
SM Supermarket carry their store brand name, SM Bonus, on their shelves. The range of
products under this store brand has gotten to be very extensive and includes personal care
products, canned goods, packaged snacks, laundry aids, pet-care products, fresh meat, and
poultry. Key purchase motivator of a consumer is low price and SM Bonus brand retails at 15 to
30 percent cheaper than leading national brands.
Convenient Location
Demographics play a vital role in the selection of sites to open. They’re bringing in the
convenience and reliability of an SM supermarket closer to their customers. They can offer them
a wide range of quality products, competitively priced, in a clean, air-conditioned environment,
with their trademark customer service.
Weakness
Items’ Prices
Customers’ Complaints
Consumers have the right to complain if it can be shown they have been deceived. When
a customer complains, it is usually for a good reason or genuine concern. They usually have
made a purchase that did not meet their expectation.
Conclusion
VI - STRATEGIC FORMULATION
2 Convenient Location
3 Promotions and SM 2 Some items’ prices are a
Advantage Card Discounts little bit higher compared
to other supermarkets
4 Excellent Customer Service
5 One-stop Shop 3 Lack of Advertisement
6 SM Bonus
7 Use of Green bag
OPPORTUNITIES SO STRATEGIES WO STRATEGIES
1 Online Shopping is a Big Establish a new store Continuous improvement
Trend in the Philippines format to their distributors for quality service (W1,
(S1, O1, O4, O5) S1, S2, S3)
2 Health Conscious Integrate free check-ups Research for the standard
Consumers promotion (S2, S4, S5, O2, price applicable to what
03) is trend. (W2, O4, O5)
The above table shows that Savemore’s rate in financial position is +6.00. This is because
of the positive revenue of the company has. Also, its stability position is at -1.67, which is a good
remark. There are barriers for the potential competitors to entry the market since the Savemore
has an image that is a number one neighborhood grocery. For its competitive position, a -1.50
remarks a good standing as compared to its competitors. Lastly, a +4.50 rate is given to
Savemore, an above average rate, since most factors presented are controllable in nature.
Aggresive
Plotting these points on a graph, the y-coordinate is the sum of financial position and
stability position which is +4.33, and the x-coordinate is the sum of industry position and
competitive position which is +3.00, this means that the financial strength of Savemore is above
compare to other companies in the industry. In this case, Savemore may plan much strategies to
have a greater share in the market since its finances are enough for its strategies. This also means
that Savemore is in a great position to take advantage of the external opportunities, overcome
internal weaknesses, and avoid or minimize external threats.
Because it falls in the first quadrant (+,+), Savemore may have aggressive strategies such
as backward, forward, horizontal integration, market penetration, market development, product
development, and diversification (either related or unrelated).
High
3.00 to 4.00 I II III
Medium
2.00 to 2.99 IV V VI
Low
1.00 to 1.99 VII VIII IX
The total weighted score of Savemore in the EFE Matrix earlier is 3.02 which means the
Savemore highly response to its key external factors. On the other hand, 3.14 is the total
weighted score of Savemore in the IFE Matrix earlier, in other words Savemore has a strong
internal position. Due to this, Savemore falls on the first quadrant of the IE Matrix as shown
above.
The first quadrant is referred to as the “grow and build” quadrant. This implies that
Savemore may consider any of the following strategies: backward, forward, or horizontal
integration, market penetration, market development, and/or product development.
STRENGTH
Part of the Country’s Biggest Food Retail 0.12 4 0.48 3 0.36
Chain
Convenient Location 0.13 - - 4 0.52
Promotions and SM Advantage Card 0.09 4 0.36 - -
Discounts
Excellent Customer Service 0.10 3 0.30 4 0.40
One-stop Shop 0.13 4 0.52 3 0.39
SM Bonus 0.08 4 0.32 - -
Use of Green bag 0.09 2 0.18 - -
WEAKNESS
Some customers’ complaints 0.07 4 0.28 3 0.21
Some items’ prices are a little bit higher 0.11 4 0.44 - -
compared to other supermarkets
Lack of Advertisement 0.08 3 0.24 2 0.16
TOTAL 1.00 5.80 3.95
Note: Attractiveness scores (AS) are determined by examining each key external or internal factor, one at a time and
evaluating if the factor can be affected by the strategy being made. If it will be affected, it is being compared to
other strategies and rated either 1 = not attractive, 2 = somewhat attractive, 3 = reasonably attractive, or 4 = highly
attractive. If the factor has no effect upon the specific strategy, a dash is placed instead of a rate. Assigned AS to one
strategy, the rate is not being repeated.
In the QSPM, attractiveness scores (AS) are determined by examining each key external
or internal factor, one at a time, and evaluating if the factor can be affected by the strategy being
made. If it will be affected, it is being compared to other strategies and rated either 1 = not
attractive, 2 = somewhat attractive, 3 = reasonably attractive, or 4 = highly attractive. If the
factor has no effect upon the specific strategy, a dash is placed instead of a rate. Assigned AS to
one strategy, the rate is not being repeated.
From the QSPM earlier, the first strategy, establishing a new store format to their
distributors, got the highest attractive score, 5.80, as compared to other strategic alternative.
By assessment, this strategy is in consistent with the mission of PayMaya:
“We deliver world class, relevant products and services which are accessible,
affordable, aspirational and fashionable.”
To deliver more accessible, Savemore needs to be more accessible by its consumers. It
should not be just accessed by walk-in costumers only, potential online customers should have
also accessed to buy in the store which is convenient for them.
Lastly, in response to their vision:
“To be the lifestyle brand of choice leading in every community we serve.”
This strategy will help to serve the online community which finds the convenient of
online shopping helpful. By this, the online community can have their grocery just by staying at
their home.
Other than the previous assessments, this strategy will help Savemore increase its market
share by having the online community as its target market. Notwithstanding the fact Savemore
has established a brand and image that consumer’s trust and have a quality service, will be
assumed to increase its growth in the following years.
Strategic Objectives
To have the online shopping be known nationwide and increase Savemore’s market share
by 15% per year in 2020 to 2022
Financial Objectives
To increase Savemore’s sales by 10% in 2020, 12% in 2021 and 15% in 2022.
Cascade the strategy to ensure that everyone is aware of the goal which is establishing a
new store format for their customers.
Perform a consumer behavior research to know the needs and wants of the consumers.
Take note of the consumer’s preference on grocery shopping.
Develop a market research on how many people prefer to shop through online shopping.
With the continued increases in mobile adaption and mobile penetration, people found
their way on how they can make their tasks easily.
Evaluate the products’ prices. Choosing the best supplier with the best offer. Set a
reasonable price for the products.
Creating advertisement through web page and social media. Creation of online accounts
on social media platforms such as Facebook, Twitter, Instagram, etc.
Aside from social media, creating an advertisement through discounts and bundles to
attract consumers. Consumers look for deals, convenience and advice on items that
complement each other that bundles have.
Develop new products under the store brand name, SM Bonus. Innovate SM Bonus to
provide
Continue to perform researches so that Savemore can respond to possible changes.
REFERENCES
https://www.philstar.com/business/business-as-usual/2008/04/28/58727/savemore-
neighborhood-sm#dqApSpF4LtMFQFE0.99
https://business.inquirer.net/90718/how-should-we-respond-to-the-growth-of-private-label-
brands#ixzz5iuhJd6Ab
https://www.sminvestments.com/company-releases/savemore-seizing-unique-opportunities-
accelerated-growth
https://www.sminvestments.com/company-releases/savemore-market-expands-southern-
philippines-opens-7-stores%C2%A0-february
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https://psa.gov.ph/content/average-family-income-2015-estimated-22-thousand-pesos-monthly-results-
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http://worldpopulationreview.com/countries/philippines-population/
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http://www.puregold.com.ph/index.php/our-business/
https://www.shopwise.com.ph/about-us