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NE-165 Case Study: The Fresh Company

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  • McLaughlin, Edward W.

Abstract

"Koninklijke Ahold nv" (Royal Dutch Ahold) was the leading food retailer in The Netherlands in 1990 with an approximately 36% share of the food and grocery market. Moreover, its four U. S. companies (Giant Food Stores, PA.; Bi-Lo, NC.; Finast, OR.; and Tops Friendly Markets, NY) ranked it number ten among the largest U. S. food retailers . Despite this dominance and obvious knowledge of food wholesale and retail distribution, Ahold had historically been unable to capture a satisfactory share of the fresh food business in The Netherlands. Yet this business represented approximately $7 billion in current business and, perhaps more importantly, was thought by many to hold the key to future success in the food industry. The case study documents the set of circumstances that led Ahold to experiment with a new food store format that, its management hoped, would allow a more effective penetration of the fresh food business. A project director is appointed with the assignment to build a new fresh foods business. The case describes his initial actions and presents the rather disappointing results after the store had been opened nine months. Part '~A" of the case ends with an outline of the areas that the project director feels merit strategic redirection in order to achieve more acceptable performance. Part "B" of the case summarizes the actions incorporated into a new strategic marketing plan in hopes to salvage the project. New financial results, nine months after the repositioning, are presented.

Suggested Citation

  • McLaughlin, Edward W., 1991. "NE-165 Case Study: The Fresh Company," Working Papers 116098, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
  • Handle: RePEc:ags:rpspwp:116098
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    File URL: http://purl.umn.edu/116098
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    References listed on IDEAS

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    1. Moore, Michael J. & Viscusi, W. Kip, 1990. "Discounting environmental health risks: New evidence and policy implications," Journal of Environmental Economics and Management, Elsevier, vol. 18(2), pages 51-62, March.
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    Cited by:

    1. Steahr, Thomas E. & Roberts, Tanya, 1993. "Microbial Foodborne Disease: Hospitalizations, Medical Costs and Potential Demand for Safer Food," Working Papers 116110, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
    2. Ding, John Y. & Caswell, Julie A. & Zhou, Furen, 1997. "Relatedness And Performance: A Reexamination Of The Diversification-Performance Link," Journal of Food Distribution Research, Food Distribution Research Society, vol. 28(1), February.
    3. Langan, Glenn E. & Cotterill, Ronald W., 1994. "Estimating Brand Level Demand Elasticities and Measuring Market Power for Regular Carbonated Soft Drinks," Working Papers 116168, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
    4. Caswell, Julie A. & Kleinschmit, Jaana K., 1993. "Economic Criteria for Settling Federalism Disputes with an Application to Food Safety Regulation," Working Papers 116114, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
    5. Wen, Hong & Haller, Lawrence E., 1994. "Price Determination in the Bottled Water Industry: A Case Study of Poland Spring," Working Papers 116165, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
    6. Bhuyan, Sanjib & Cotterill, Ronald W., 1994. "Countervailing Power and Seller Performance in U.S. Food and Tobacco Manufacturing Industries," Working Papers 116163, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
    7. Cotterill, Ronald W. & Pinkerton, Don C., 1993. "Motives for Mergers in Food Manufacturing," Working Papers 116111, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
    8. Ding, John Y. & Caswell, Julie A. & Rogers, Richard T., 1993. "Restructuring's Effect on Related and Unrelated Diversification Among Top Food Manufacturing Firms in the 1980s," Working Papers 116118, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
    9. Cotterill, Ronald W. & Salih, Hachim M., 1992. "Testing For Risk Premiums In The Wheat-Flour Subsector," Working Papers 116109, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.

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    Keywords

    Agribusiness;

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