Strategic Direction

Teacher: Eysel Adolfo Chong

Final project

Presented by:

Name Identification card

Benavides, Ana Patricia 8-915-1994
Garcia, Giovana 8-885-2018
Morales, Gissell 8-871-16
Ortega, Pamela 8-885-448
Seville, Karla F053344

Monday, December 14, 2020

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 Final project – Super 99
Benavides, García, Morales, Ortega, Seville

Content

INTRODUCTION...................................................................................................................3
COMPANY BACKGROUND.................................................................................................4
SURROUNDING ANALYSIS................................................................................................5
General environment variables..........................................................................................5
Specific environment variables..........................................................................................6
SWOT Analysis.................................................................................................................7
SWOT Analysis and Key Success Factors in the supermarket industry.......................7
Strategic SWOT analysis...................................................................................................8
Value chain........................................................................................................................9
Business model...............................................................................................................10
STRATEGIC CHALLENGE.................................................................................................11
STRATEGY DEVELOPMENT.............................................................................................11
STRATEGIC OPERATIONAL PLAN...................................................................................14
CONCLUSIONS..................................................................................................................15
BIBLIOGRAPHY.................................................................................................................16
APPENDIX 1.......................................................................................................................17
APPENDIX 2.......................................................................................................................19

Board1 - General environment variables..............................................................................6

Board2 - Specific environment variables..............................................................................6
Board3 - SWOT analysis and success factors......................................................................7
Board4 - Super 99 strategic SWOT analysis........................................................................8
Board5 Value chain...............................................................................................................9
Board6 - Super 99 business model.....................................................................................10
Board7 Strategic Operational Plan.....................................................................................14

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 Final project – Super 99
Benavides, García, Morales, Ortega, Seville

INTRODUCTION

Super 99 is a supermarket chain with a long history nationwide, it is one of the most
important and recognized. It currently has 49 branches throughout the national territory
and more than 7,000 employees.

Like any company, it is necessary to define strategies that are aligned with its vision and
mission and that can execute an action plan and measure the results.

This document contains a strategy development to assume one of the most relevant
strategic challenges for Super 99. For this we will start with a general analysis of the
general external and internal environment of Super 99.

Next, an analysis of strengths and weaknesses is presented; as well as an analysis of the

business model, using the canva model as a tool.

Finally, a strategic challenge is proposed along with its critical route of action to improve
and optimize the chain's sales. For this, the strategies by objective will be analyzed, the
goal that is desired to be achieved in a certain period of time and the way in which
progress will be measured.

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 Final project – Super 99
Benavides, García, Morales, Ortega, Seville

COMPANY BACKGROUND

In 1961, in the city of Colón, the Wong Chang family founded a company identified
as Almacén 99, which was dedicated to the hardware and silk trade.

They progressively moved their activities to Panama City, where they established
their general management, gradually opening new stores with the same name.

Later the company was acquired by Empresas Martinelli, SA in 1986 and it was at
this time that SUPER 99 was born, changing the structure and service that was
previously provided, for a service that projected to the consumer a classification
according to the characteristic of a supermarket with the best products and at the
best prices.

Today they come to occupy a preferential place in the business class and are
equally recognized both in our Republic and abroad, such as chain No. 1 of
Supermarkets.

They have 49 branches throughout the country, 29 in the Metropolitan Area, 4 in

Colón and representations in the interior of the country distributed as follows: 4 in
Chiriquí, 5 in Central Provinces and 7 in Panama Oeste.

Super 99 is made up of more than 7 thousand employees, and they impact the
labor market indirectly with more than 15 thousand positions through local and
international suppliers, becoming one of the largest private employers in Panama.

STRATEGIC NORTH / MISSION AND VISION

As stated in its Quality system, for its continuous improvement, in 2018, Súper 99
undertook an aggressive marketing and positioning strategy that reinforced its
leadership since it is based on four important axes: customers, strategic allies,
collaborators and maintenance.

In a sector as competitive as retail, Súper 99 complements its leadership with

strategies to offer a variety of products. Quality, service, infrastructure, locations
and promotions are other key factors to complement the value offer to the market.

For this reason, they constantly analyze all the company's processes, locating
points of improvement to give their consumers the best products, with the best
price so that they live longer and spend less.

Mission

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 Final project – Super 99
Benavides, García, Morales, Ortega, Seville

“To maintain ourselves as the country's leading supermarket chain, at the forefront
of technology, efficiency, service and profitability. Provide variety of products and
services with added value; of the best quality, at reasonable costs, satisfying
consumer needs and contributing to the economy of all sectors.”

Vision
“To be an exemplary company in Human Resources and in the environments of
our establishments, where the client covers as many of their needs as possible
under one roof.”

SURROUNDING ANALYSIS

The following tables identify the variables of the general and specific environment of the
company.

General environment variables

Variables Factors

Policies  Government changes

 Owner of SM99 was President of the country

Economic  GDP growth per capita

 Purchasing capacity

 Unemployment

 Economic crisis due to Covid-19

Social  Demographic traits

 Customer preferences

Technological  Online sales

 Operating systems

Ecological  Trend for environmental care

 Healthy product consumption trends

Legal  Tax payment

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 Final project – Super 99
Benavides, García, Morales, Ortega, Seville

Board1 - General environment variables

Specific environment variables

Variables Factors

Competence  Large number of direct competitors

 Strong competition since the client has the power of

choice.

 They have advantages over their other competitors,

such as number of branches.

Customers  The client has the power of choice.

 Large number of clients with different purchasing

powers.

 65% of clients are of low-medium purchasing power.

Suppliers  Large number of suppliers

 It has suppliers of all types, from very small to very

large.

 Suppliers incentivize through attractive promotions.

Dealers  This figure applies only to wholesale sales.

 They work for public and private tenders.

 It only represents 15% of the total sale.

Contractors  Large number of contractors to cover branch services

nationwide.

 Little standardization in the processes of the different

contractors.

 Contractors with many years of service to the company.

 Around 70% of the services are through a contractor.

Board2 - Specific environment variables

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 Final project – Super 99
Benavides, García, Morales, Ortega, Seville

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 Final project – Super 99
Benavides, García, Morales, Ortega, Seville

SWOT Analysis
SWOT Analysis and Key Success Factors in the supermarket industry
Key Success Factors in the Supermarket Industry
Survival Other
SWOT Variety of
Quality Coverage Variables Variables
Assortment
F1. Great national
F2. good prices
coverage
F3. They have a
Strengths
cafeteria
F4. Variety of
departments
D1. Bad image of D3. Inventory
some branches Deficiencies
Weaknesses D4. Poor
D2. Deficiencies in
organization of
customer service
categories
O3. Attract
O1. Improve branch O2. Differentiated different
infrastructure/image assortments customer
profiles
O4. Online
sales
O5.
Opportunities
Technological
surveillance to
detect how
advances in
technology
affect the
business
A1. Expansion of
other supermarket A3. Changes in
chains, such as El consumer
Xtra and Justo y preferences.
Bueno.
Threats
A2. The growth of
grocery stores,
supermarkets,
convenience
stores.

Board3 - SWOT analysis and success factors

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 Final project – Super 99
Benavides, García, Morales, Ortega, Seville

Strategic SWOT analysis

Board4 - Super 99 strategic SWOT analysis

STRATEGIC SWOT ANALYSIS

Strengths Weaknesses

F1. Great national coverage D1. Bad image of some branches

F2. good prices D2. Deficiencies in customer
F3. They have a cafeteria service
F4. Variety of departments D3. Inventory Deficiencies
D4. Poor organization of
categories

Opportunities FO Strategies OD Strategies

O1. Improve branch infrastructure/image 1. Improve the 1. Train human resources in

O2. Differentiated assortments image/infrastructure of the customer service and
O3. Attract different customer profiles stores with the highest attention (O1, D2)
O4. Online sales sales. (O1,F1) 2. Implement technological
O5. Detect how advances in technology 2. Approve suppliers that systems that allow better
affect the business offer differentiated quality inventory control (D3, O5,
products at good prices D4)
(O2, F2)
3. Import new product
brands (O2,F4, F2)
Threats FA Strategies DA Strategies

A1. Expansion of other supermarket 1. Create a concept of 1. Implement a loyalty

chains, such as El Xtra and Justo y smaller supermarket program through points
Bueno. stores with essential and for purchases. (A1, A3,
A2. The growth of grocery stores, quality products (A1, A2, D1)
minisupers, convenience stores. F1). 2. Advertise in mass media
A3. Changes in consumer preferences. 2. Add new sales during prime time and on
departments (F4, A3). social networks (A1, A3,
D1)

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Value chain

Company infrastructure :
46 points of sale throughout the country, +7 thousand employees, retail sales of mass consumption goods

Human resources management :

Recruitment, retention, training, compensation of staff

Technology Development:
Software implementation, information systems, sales support

Shopping :
Negotiation with suppliers

Inbound Logistics Operations Outbound Logistics Marketing and sales Service

1. Purchase and negotiation 1. Inventory 1. Distribution of 1. Advertising on 1. Cashiers
of products with suppliers. management products to sales points. television, radio, social 2. Supervisors
networks. 3. Lines of
2. Promotions and Customer Support
discounts
3. Pricing

Board5 Value chain

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 Business model

Problem: Solution: Unique value proposition: Special Customer

1. Quality Supermarket A supermarket where you can advantage: Segment:
products and chain with great find the best quality products, at Supermarket People over 16
services nationwide the best prices and always close chain with the years of age
2. Affordable coverage, with to you. largest number who make
prices a variety of of branches in purchases of
3. Closeness to products at the the country. groceries and
customers best prices. household
Key Metrics: Channels: products and
Sale, influx of Points of sale who have a
customers, (branches), lower average
inventories. online sales, income.
delivery
platforms.
Cost structure: Revenue Model:
Cost of purchasing products, infrastructure, Sale of mass consumption products and perishable
salaries, financing, marketing, permits, technology. goods.

Board6 - Super 99 business model

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 Final project – Super 99
Benavides, García, Morales, Ortega, Seville

STRATEGIC CHALLENGE

STRATEGY DEVELOPMENT

1. What strategies are proposed?

R/. To develop our strategic challenge, we propose the following objectives and
strategies.

 Objective 1. Improve the image of Super 99 stores

o Strategy 1.1. Remodel stores with higher sales and poorer
infrastructure.
o Strategy 1.2. Implement the use of planograms for categories.
o Strategy 1.3. Standardize the category organization layout of all stores.
 Objective 2. Increase our customer satisfaction through better customer service
o Strategy 2.1. Standardize customer service processes/protocols.
o Strategy 2.2. Enrich the soft skills of our collaborators through training.

2. Challenges and key success factors associated with the strategic challenge posed

R/. It is considered that the key success factor to which the strategic challenge is being
associated is: “Quality”, since the focus is on increasing the value we deliver to our
clients and collaborators.

3. It identifies the company's capabilities and main strengths that can give the company a
sustainable competitive advantage.

R/. Super 99 has multiple strengths within the market in which it competes and these
allow it to maintain a sustainable competitive advantage. Among these we can mention
the great national coverage, the offering of products at competitive prices and the wide
variety of departments that its different branches have. Added to this is that they have
expanded the services they offer by having a cafeteria, pharmacy, toy store, a
complete hardware store and a money transfer service.

4. Establishes the scenarios that favor or can make the selected strategies fail. It is
important to consider the critical drivers in the industry that determine success today
and in the future.

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 Final project – Super 99
Benavides, García, Morales, Ortega, Seville

R/. By presenting the necessary strategies that will allow us to meet the objectives of
the identified strategic challenge, we can recognize some positions that can cause the
plan shown to fail. Among these we can mention lack of investment by the company,
failures in the implementation monitoring process, coordination problems between the
different departments involved, failures in the measurement of indicators, among
others.

In order for the strategic plan presented for Super 99 to be correctly developed, we can
mention adequate coordination between the different parties involved in the project as
determining factors. Likewise, senior managers and the finance manager need to
approve the investment for the different strategies that need to be developed.

5. What are the market positions held by industry rivals? Who are these rivals?

R/. We can see the main rivals for Super 99 in the following graph, where we can see that
even the king supermarket has fewer establishments, unlike Super 99, it occupies the first
position in the market and in third place we have the Super Xtra and In fourth place we
have Riba Smith.

These would be the main rivals for the Super 99 within the Panamanian market.
We can say that all of them have a solid position since their markets are certainly identified
and each one is located in strategic locations.

6. Who has a strong position and who doesn't?

R/. According to the studies carried out, we can highlight that in Panama all the supers
have a fairly solid position, some stronger than others such as Riba Smith, Grupo Rey,
Super 99 and Machetazo, we do not rule out the others because they continue and will
continue to be a very strong competition. , but in the case of super 99, the
aforementioned are the ones that until now mark a fairly extensive rivalry.

7. What strategic moves are rivals likely to make?

R/. Among some of the strategic moves that some rivals are likely to make, we have

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 Final project – Super 99
Benavides, García, Morales, Ortega, Seville

 Super Extra: Expansion strategy through more stores and including smaller stores
called Xtra Market.
 El Machetazo: Opening of smaller stores, called Tienda Express.
 Fair and Good: Continue growing in the number of branches, managing to be close to
the people, competing with low prices.
 The King: Diversification of assortment, attracting more and different customer profiles.
 Riba Smith largest number of branches.

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STRATEGIC OPERATIONAL PLAN
STRATEGIC CHALLENGE: HOW CAN WE GENERATE GREATER VALUE FOR OUR CUSTOMERS AND EMPLOYEES?
Goals Strategy Achievement Level (goal) Indicator (KPI) Periodicity Responsible
5 stores within a period of 3 Increase in sales 20% Sales/Commercial
1. Remodel stores with higher years within 3 years Annual Department
sales and poorer infrastructure
2. Implement the use of 7 main categories of the Reduction in Logistics
1. Improve the image planograms for store categories. basic basket per year, over a inventory costs by department
Annual
of Super 99 stores period of 3 years (21 10%
categories in total)
23 branches per year for a Increased profitability Department of
3. Standardize the category period of 2 years. by 2% annually per Annual Finance
organization layout of all stores store
1. Standardize customer service All processes/protocols in 1
2. Satisfy our processes/protocols month
Marketing
customers through NPS above 90% Monthly
46 branches within 6 Department
better service 2. Enrich the soft skills of our months
collaborators through training
Board7 Strategic Operational Plan

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Final project – Super 99
Benavides, García, Morales, Ortega, Seville

CONCLUSIONS

An organization's strategy must be appropriate to its resources, objectives, and

environmental circumstances. An objective of corporate strategy is to put the
organization in a position to carry out its mission effectively and efficiently. A good
corporate strategy must integrate an organization's goals, policies, and tactics into
a cohesive whole, and must be based on business realities. The strategy must
connect the vision, the mission and probable future trends.

Super 99 faces a highly competitive and growing market. This is why the company
must focus on increasing the competitive advantages they have and work on
offering quality customer service. It is also important to mention that problems were
identified with the current infrastructure of some branches, which is essential within
the supermarket industry, since customers expect a clean and fresh environment
when it comes to the food they are going to consume.

It is important for Super 99 to have strategic thinking that can visualize what trends
are coming for society and how they can be prepared to withstand changes in both
the social and economic environment.

For Super 99, this study is very clear with its initial purposes and with the idea they
had to carry out a better operation to meet the objectives. Formulating business
strategy, and then implementing it, is a dynamic, complex, continuous and
integrated process, which requires much evaluation and adjustment.

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 Final project – Super 99
Benavides, García, Morales, Ortega, Seville

BIBLIOGRAPHY

ING Spain. (2014). Value chain. Retrieved on December 5, 2020 from:

https://www.youtube.com/watch?v=G7ifbFmidl0

COUSIN. (sf). Lean Canvas explained Step by Step and with Examples. Retrieved on
December 10, 2020 from: https://innokabi.com/lienzo-lean-canvas-el-lienzo-de-los-
emprendedores/

SEGURA, S. (2018). Strategic diagnosis: how to do it with rigor and success.

Retrieved December 10, 2020 from https://www.youtube.com/watch?
reload=9&v=UA8t9wS3mtc

UNIVERSITY FOR INTERNATIONAL COOPERATION. (sf). Summary of the book

Strategic Management by Thompson & Strickland. Suitable strategies for various
industrial competitive positions that a company may have.Retrieved on December 10,
2020 from: https://moodle.uip.edu.pa/pluginfile.php/2887415/mod_resource/content/1/12-
M7_ResumenThompson%20%20Strickland.pdf

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 Final project – Super 99
Benavides, García, Morales, Ortega, Seville

APPENDIX 1

1. What are the attractive aspects of the company's situation?

R/. Among the attractive aspects that the company presents, we can mention the
extensive coverage it has nationwide, with 46 branches throughout the territory of the
Republic. To this we can add the competitive prices, which are attractive for the sector
they serve within the market. Super 99 is characterized by having a wide range of
departments among which we can mention bakery, toy store, hardware store and cash
transfer service. All of this allows it to have a large market share, occupying an
advantageous position compared to direct and indirect competition.

2. What aspects generate the most concern?

R/. Among the aspects that generate the most concern within Super 99 we can
mention the poor image of some branches, emphasizing the infrastructure that can be
improved and updated. There are deficiencies in customer service, which is of average
quality. At the same time, deficiencies in inventory management and poor organization
of categories have been identified.

3. Are the internal strengths and competitive assets strong enough to compete
successfully?

R/. It is considered that over the years Super 99 has been expanding its coverage and
maintaining competitive prices, as well as adding different services to its clients. They
have a fairly solid position in the market, which is why we consider that their strengths
are strong enough for them to maintain the position they currently occupy. It is
important to mention that the importance of developing new strategies is not left aside,
since when we run out of innovations the situation can change for the company.

4. Are competitive weaknesses and deficiencies mostly inconsequential and easily

corrected, or would it be disastrous not to remedy them soon?

R/. The weaknesses that have been identified have a significant degree of urgency,
since when we talk about the organization's infrastructure we talk about the safety of
clients and collaborators. For this reason it is considered urgent and important. When
we refer to customer service, we can say that this is important, but not urgent. The first
cannot be corrected easily, but it must be done as soon as possible. The second can
be corrected more easily. Both should be priorities for Super 99, since they are directly
related to the experience that the customer will have when going to the branches.

Inventory management is also identified. This generates expenses for the company, so
we categorize it as important but not urgent. By improving this, not only will you have
savings, but you will also always have the different branches supplied with products. It
should be remedied soon, but not doing so will not result in something disastrous for
the company either.

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 Final project – Super 99
Benavides, García, Morales, Ortega, Seville

5. Do competitive strengths and assets offset competitive weaknesses and liabilities by

an attractive margin?

R/. We can say that this is true. Although infrastructure is a factor that is considered
very urgent and important, the company continues to have a strong position in the
market and with a clientele that continues to purchase products from the supermarket.
This means that the great coverage they have and the good prices they offer keep
them in a favorable position within the industry in which they compete.

6. Does the company have attractive business opportunities that fit well with its internal
strengths?

R/. The company has an opportunity to improve its current weaknesses and add new
options for its customers that help increase its value to them. Among these we can
mention offering more varied and differentiated products to attract different market
niches, developing an online sales system in order to use new technological advances
and the use of innovations to make processes in a more standardized, fast and
economical way. .

7. Do you lack the resources and capabilities to take advantage of the most attractive
opportunities?

R/. The company's economic position is stable enough to invest in the improvements
that are mentioned as business opportunities. It is important to mention that all this will
allow sales to increase and better use of the money available for the activity carried out
by the supermarket.

8. Overall, on a scale of 1 to 10 (1 being alarmingly weak and 10 being exceptionally

strong), where do the company's situation and prospects stand?

R/. In an objective way we can say that in a 7. The company has a good position in the
market and has great opportunities to improve it. It also has the resources necessary
to make those improvements. Likewise, if the strategic challenges are not addressed in
the best way, the current position of the company may decrease, since there are
supermarkets, which are direct competitors of Super 99, that have strategies similar to
those they present and can overcome them at some point.

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 Final project – Super 99
Benavides, García, Morales, Ortega, Seville

APPENDIX 2

a) Indicate what the company's strategic problems or challenges are.

R/.
 Diversity of branches in poor conditions.
 Training and training in customer service.
 Opposition to changes by staff.
 The poor condition of some products.

b) What are the factors of strategic relevance in the macroenvironment?

R/. There are several factors that are affected within this industry, we can mention
among them:

 Economic factor: despite having very good prices, there are Supers like the
Xtra, the Machetazo and Justo Bueno that have greater accessibility.
 Technological factor: some of its competitors such as Riba Smith and Super
Xtra already allow us to shop online and arrive at our home.
 Political factor: although this chain is no longer owned by Mr. Martinelli, the
number of conflicts in which it has been involved has allowed it to be
affected.

c) How decisive are the competitive forces in the industry?

R/. Super 99 is characterized by its ability to negotiate, not only with clients but also
with the portfolio of suppliers they maintain, and although the competition has
strong points in terms of their strategies, some of the advantages that Super has
99 is its number of branches.

d) What types of competitive forces do industry members face and how intense is
each?

R/. Competitive forces are undoubtedly not easy to overcome because each of the
supers that are shown as competition have very strong factors.
 Riba Smith to date is a leader in terms of customer service and the quality
of its products.
 Grupo Rey offers its products extremely strong and at affordable prices.
 Machetazo, for its part, not only offers edible products, but also for the
home and every area we need.

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 Final project – Super 99
Benavides, García, Morales, Ortega, Seville

e) What are the market positions held by industry rivals? Who are these rivals? Who
has a strong position and who doesn't?

R/. The main direct rivals that Super 99 faces are other supermarket chains such
as Riba Smith, Supermercados Rey, El Machetazo, Super Xtra, Justo and Bueno,
among others. Indirect rivals such as grocery stores and convenience stores are
also identified. Among the rivals that have a solid position we can mention Justo y
Bueno, Riba Smith and Supermercados Rey, which have coverage strategies and
low prices, quality of products and services, and variety and freshness,
respectively. Super Xtra and Machetazo, although they have an important position
in the market, do not have such a marked differentiation that positions them within
the industry as the previous ones.

f) What strategic moves are rivals likely to make?

R/. If we focus on the three supermarkets that have the strongest position, we can
predict that Justo y Bueno will continue with its expansion strategy, becoming the
store with the greatest coverage. Riba Smith will probably develop some strategy
using technology so that the service they provide to customers is more
personalized and the purchase time is shorter. We hope that Supermarkets Rey
partners with some other company to expand its market and offer some type of
extra service.

g) What are the key factors for success in the industry?

R/. The key factors for success in the industry are:

 Gain “unfaithful” consumers, that is, those who alternate between chains
and distribute the shopping basket as it suits them.
 Know the consumer and give them what they want at all times.
 Maintain prices throughout the year, at levels that the consumer is willing to
pay.
 Have an assortment in which quality brands and products appear.
 Innovation.
 Clean, organized and properly signposted points of sale, always ready for
inspection so that customers enjoy an adequate shopping experience.
 Work in a very detailed way on the stock level in the store, in order to
achieve a high turnover of the capital that the store invests in products.

h) Does the industry offer good prospects for attractive profits?

R/. Yes, because the food sector has been growing continuously for years, based
on the fact that it covers a basic need. That is to say, a large part of the budget of
Panamanian families is dedicated to the purchase of food and this is a fact that is

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Benavides, García, Morales, Ortega, Seville

repeated month after month, so supermarkets are not affected by fashions that can
mark the performance of other types. of business.

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