Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
mmgomez1992@gmail.com
mmgomez1992@gmail.com
successful, leading the company to leadership position and building up a sustainable competitive
advantage essential to generate value creation.
MERCADONA s COMPETITIVE ADVANTAGE
Mercadonas value preposition is to provide the highest-quality products at the markets most
economical prices. Operation efficiency is crucial to reduce lead time and transportation costs but at
the same time the company thinks that its best asset to provide value to the customers is its
employees and thats the reason why they invest significant amount of money in them relative to its
competitors, paying them high waves and seeking to boost the staff to work harder for promotions
and self realization.
In order to provide the best shopping cart menu to its customers, Mercadona bases its strategic and
operational decisions on the Total Quality Model (TQM) developed in 1993 by its president Juan
Roig. TQM starts from a universal premise: to be satisfied, first you have to satisfy everyone else.
Hence, Mercadona orients its business model towards customer satisfaction firstly, so important that
internally it calls them bosses. At the same time, the manager is convinced that the workers,
suppliers, society and capital are equally important and all its policies must be aligned with providing
satisfaction to all them. In this manner, any initiative proposed must first be evaluated in order to
ensure that is meeting the model requirements. Eventually, the firm adopts proposals only when
their consequences are satisfactory to all five components, otherwise it rejects them. Exhibit 6
shows Mercadonas core capabilities and alignment with the TQM to provide value creation,
highlighting the significant investment in internal operational processes and employees. On the
other hand, the strategic actions carried out by the company to ensure shareholders satisfaction at
each level, from customer to capital, can be better understood by following the exhibit 7.
Even though the TQM may look simple apparently, its application is neither simple nor easy. It is a
multi-objective optimization problem in which five agents must be satisfied at the same time. This
model has been brought up to date since 1993, adjusting it to new stakeholders needs and has
enabled the company to experience a tremendous growth since its implantation. Besides, when the
company started to shake as a result of the recession around 2008, Juan Roig decided to rely on it
more than ever, resulting in improved performance as can be observed in Exhibit 8.
In this manner, the complentary , diverse and complex practices developed by the company to
create value ensure a sustainable long-term competitive advantage highly difficult to imitate.
CONCLUSION, FUTURE INSIGHTS AND CHALLENGES.
Mercadonas strength relies on its business management model, the TQM, which can also be seen
as a philosophy or mindset. It relies on very strong and solid pillars: motivated employees and
operational efficiency to provide the best long term value at the lowest price to the customers,
without forgetting the remaining stakeholders. In a period of great difficulty, the company has been
able to grow substantially and to establish a sustainable competitive advantage in a very
competitive market.
Growth opportunities and threats are analyzed in the exhibit 9.The company should try to follow the
same line, consolidating its position by market penetration strategy, strengthen its relation with
suppliers with long term contracts and invest in employees and internal processes to provide the
best long-term relation with the customer. Keep customers loyalty will be crucial in a mature market
so all the decision must be aligned with this purpose.
mmgomez1992@gmail.com
From the dynamic-competitive point of view, Mercadona must take care of the competitors
movements or potential acquisitions within the industry. New players are not likely to appear but
international chains could emerge on the market by acquisitions. Hence, it is crucial for the
company to keep levering its cost advantage, establishing low prices to generate barriers and
prevent new players from entering. The major threat is a technological disruption which may affect
the business management, so in terms of product development, the company may try to establish a
strategic partnership with an IT company focused on innovative distribution systems.
The main challenge of the company is the internationalization, which may try to accomplish by
acquiring a company which operates in neighbouring and similar countries such as France, Italy or
Portugal. Attractive regions such as Asia may be too risky because of cultural differences, specially
taking into account the customer-based policy defined. The good news is that the business model is
robust and well defined so could be spread into new markets by following the same receipt and
customer satisfaction.
mmgomez1992@gmail.com
DEMOGRAPHIC
Population is shrinking.
Birth-rate goes down.
ECONOMY
Crisis has a dramatic impact in the
Spanish GDP
Income affordable has been reduced.
Very high unemployment ratio.
SOCIO-CULTURAL
Increased demand for healthy food from
younger generation.
Sustainable food supply awareness
TECHNOLOGICAL DEVELOPMENT
Supply chain management monitoring
IoT tracking the customer.
EXHIBIT 2. FIVE FORCES ANALYSIS FOR THE SPANISH FOOD RETAILING INDUSTRY.
ENTRY THREATHS
Easy to enter as a small player(-)
High economies of scale(+)
Brand loyalty(+)
Difficult to reach suppliers,
distribution channels(+)
BUYERS
Many Suppliers(+)
small chains, low bargaining
power(+)
RIVALRY
Fragmented market, many
players, low margins(-)
Low industry growth, mature
industry(-)
Difficult to differiantate(-)
SUBSTITUTES
Local farmers, no serious
threat(+)
BUYERS
Many options to choose, very low
switching cost (-)
High price sensitivity(-)
mmgomez1992@gmail.com
Small/local
retailers
42%
Mercadona
20%
Grupo Eroski
5%
Carrefour
7%
Dia
Other
5%
supermarkets
21%
60
50
Grupo Eroski
40
Carrefour
% MS 30
Dia
Small/local
retailers
20
10
0
2009
2010
2011
2012
2013
Year
MERCADONA
COMPETITORS
mmgomez1992@gmail.com
EXHIBIT 5. MARKET SHARE BY COMPANY IN TERMS OF PRICE POLICY AND PRODUCT VARIETY
High Product
Variety
Low Product
Variety
Discount Policy
Price Stability
VALUE PREPOSITION
Highest-quality products at
the markets most
economical prices
EXCELLENT
OPERATIONAL
EFFICIENCY
EMPLOYEES
TRAINING
STAKEHOLDERS
SATISFACTION
mmgomez1992@gmail.com
EXHIBIT 7. TOTAL QUALITY MODEL (TCQ): SATISFYING ACTIONS.
THE BOSS
Best quality/cost offer.
Personalized customer service.
Stable low Price.
Very functional design.
Innovative practical packaging.
Complaints as feedback.
Promote communication.
THE EMPLOYEE
Best training programs investment.
Higher average waves.
Permanent contract with bonus.
Work-family compatibility.
Never work on Sunday.
Boost the staff to work harder for promotions,
self realization.
THE SUPPLIERS
Cooperation with suppliers.
Long term contracts and indefinite
loyal relationship.
Guarantee stability and mutual
benefits.
SOCIETY
High CSR. Transparency.
Research programs in natural environment.
Waste recycling programs
Linking Universities with business activity.
CAPITAL
Stock ownership highly concentrated.
Ensuring profitability, stability with
minimum risk.
Reinvest of profits to keep growing.
mmgomez1992@gmail.com
EXHIBIT 9. THREATS AND OPPORTUNITIES FOR MERCADONA
THREATS
OPPORTUNITIES
Consolidation/Penetration:
Maintain suppliers loyal relationship.
Keep low prices to avoid new players.
Innovate in packaging.
Offer experience Retailing
Maintain leadership position in customer
preferences.
Product development:
Complementary new portfolio according
to customer preferences,
Boost online channel and customer
tracking.
Innovative distribution system.
Market development:
Internationalization to neighbouring
similar country(France, Italy, Portugal)
mmgomez1992@gmail.com
REFERENCES
Mercadona: Adapting the business model in years of recession, Oriol Amat & Josep Frances
Valls.
www.hoovers.com
Deloitte: Global Powers of Retailing 2015: Embracing Innovation
How Mercadona Fixes Retails Last 10 Yards Problem, Julia Hanna, Harvard Business
School
Using Total Quality Management Model to Face the Economic Crisis: The case of Mercado,
Miguel Blanco Callejo, Universidad Rey Juan Carlos.