【251】北大光华案例分析大赛-飞翔的黑鱼-Valuation_of_The_Fresh_Market

北京大学光华管理学院案例大赛

Valuation of the Fresh Market

——企业管理组参赛作品

飞翔的黑鱼——冯翼翔, 王远韬，俞晓婧

Valuation of the Fresh Market 2013/4/14 Part 1: Competitive analysis

TABLE OF CONTENTS

Chapter 1: Preliminary Assessment (1)

A. Industry Overview (1)

B. Target Company (2)

C. Comparable Companies (2)

D. Company Comparison (3)

Chapter 2: Financial Ratios (11)

Chapter 3: Competitive Advantage (21)

A. “Smal ler-box Format” strategy (21)

B. Concentration and Pricing (22)

C. Shopping environment (24)

D. Infrastructure (26)

Chapter 1: Preliminary Assessment

A.Industry Overview

After skimming through a variety of industries, we decided to pick up the U.S. food retailer industry as our target. However, there’s no crystal clear definition of this industry, since it encompasses store formats ranging from small grocery shops and convenience stores to large supermarkets. Some of them mainly retail food, while others retail different kinds of commodities including food. These retailers may operate in different business models according to their sizes and product categories, but they do compete with each other when it comes to selling food directly to consumers.

Key trends that will continue to shape the food retailer industry include:

(i)Increasing focus on the customer shopping experience: Supermarkets are

enhancing or attempting to enhance the consumer’s shopping experience in stores even as price competition is increasing. Many conventional supermarkets have reduced new store expansion to direct capital expenditure budgets toward remodeling existing stores. In addition, supermarkets are striving to be more innovative and responsive to consumer preferences with their consumer interactions and product offerings.

(ii)Emphasis on healthy, fresh and quality offerings: Supermarkets are increasingly providing and marketing fresh food items consistent with ongoing health trends and greater consumer awareness of the negative aspects of processed foods. Many conventional supermarkets are attempting to complement center aisle grocery formats with fresh formats that emphasize high-quality perishables and prepared foods. The increased popularity of farmers’ markets over the past few years is also indicative of a consumer preference for fresh food items. Additionally, the growing consumer demand for fresh, quality offerings has improved the infrastructure for, and increased the supply of, these items, resulting in improved sourcing, distribution and pricing.

(iii)Localization: An increasing number of consumers believe that locally-grown products are fresher and taste better. Consumers often purchase locally-grown food because they prefer to support local growers. In addition, these consumers may believe that locally-grown food results in a reduced environmental impact.

(iv)Rise of private label: Supermarkets are increasingly developing and promoting private-label brands to distinguish themselves from their competitors and promote consumer loyalty. These private-label brands can also offer benefits to retailers through increased margins and, in certain instances, to customers through lower prices compared to branded products. Another key contributor to private label growth has been the improved product quality image and exclusivity of certain brands, which can further help to differentiate