Evaluating a Corporate-Societal Relationship – Kroger Co

Evaluating a Corporate-Societal Relationship – Kroger Co.

Introduction

Barney Kroger established the company in 1883. Kroger Co. has been in operation for more than thirteen decades. It has at least 2800 stores in more than 35 states. It is ranked as one of the largest global retailers. Its headquarters are in Cincinnati, Ohio ( The Kroger Co., 2017). This write-up highlights the company’s successes and failures as well as threats and lost opportunities.

Primary products and or services   

Kroger offers multiple services and products to clients in the market. The company’s products and services are offered in supermarkets, department stores, pharmacies, gas stations, jewelry shops, warehouse stores, and supercenters. The products include jewelry, groceries, pastries, spreads, flowers, medication, gas, dairy products, and financial services. Kroger has utilized innovation to ensure it offers its clients the most accessible, convenient, and reliable services. The company uses technology-based programs such as QueVision, which facilitates faster checkout of products. In 2010, the checkout time was reduced from 4 minutes to less than 30 seconds, which is the current standard. Besides buying clients, Kroger also upholds sustainability efforts that are intended to improve the present by protecting the future. Since the mid-2000s, Kroger has been rescuing fresh, safe, and edible food items and donating them to local food banks (The Kroger Co., 2020). These activities have been adopted by other players as a strategy for minimizing and managing waste as well as ensuring the protection of the environment. The initial principles, such as value, service, and selection, continue to guide Kroger in its current operations.

The primary stakeholders can influence the organization’s financial performance.

Stakeholders play a critical role in an organization’s financial performance (Weiss, 2014). The case is no different for Kroger. The key stakeholders, such as clients, provide the monetary resources in exchange for various goods and services. Therefore, they enable or facilitate profit generation whenever they purchase services or goods. If they fail to purchase from Kroger, the profits will be reduced significantly, affecting their financial performance. Therefore, clients’ decisions to purchase hold significant meaning for Kroger’s financial performance. For this reason, the company must ensure that customers receive value for their money, easily access the goods and services, and obtain the expected benefits which are associated with the products and services (Lawrence, 2020). This approach creates repeat clients who buy frequently, creating a solid customer base for the company.

The clients’ reviews could also influence potential customers’ decisions. The reviews that current customers provide to their friends and relatives affect future sales significantly. In the age of technology advancements, clients can review a company for good or bad services/products. These posts can go viral through sharing and liking numerous times. Therefore, technology gives clients greater power to spread positive or negative news that influences the decisions of new customers (Lawrence, 2020).

Internal stakeholders and employees also play a critical role in increasing or reducing revenue. The workforce is critical to the success of a business (Lawrence, 2020). If a company does not train its workforce to deliver goods and services in the best way possible, it is set to lose some clients who are unhappy. Similarly, if employees are well trained, a loyal customer base is created as clients keep coming back. It is also possible to charge higher for the same services or products due to the skills and expertise of staff. Most importantly, the workforce should be satisfied with their jobs and happy to gain their commitment.

Finally, investors and suppliers are important external stakeholders who influence the financial performance of an organization. Investors provide the necessary capital for further investment or growth and expansion (Lawrence, 2020). This leads to greater revenue as Kroger can reach more clients. Suppliers provide goods or services that meet certain acceptable standards. Failure to provide these goods and services reliably may lead to inconsistencies in delivery and cause clients to seek out alternatives. The price factor at which the goods and services are provided also matters. If the prices are too high, the company has lower margins which affects their profits negatively.

Critical factors in the organization’s external environment that can affect its success.

The threat of new entrants that conduct their business primarily on online platforms has the potential to affect the company’s success. Kroger has been in business for at least 13 decades ( The Kroger Co., 2017). This means that it is popular, especially among the older generations. However, most businesses today are seeking to appeal to the younger generations who prefer to shop online. Companies such as Amazon, Alibaba, AliExpress, and Walmart are gaining significant command because they can reach a global market through online platforms (Lawson, 2021). These entrants pose a real threat to Kroger’s significance, especially to the younger generations.

The threat of global pandemics that affect normal business operations is imminent. Covid-19, the most recent pandemic, has affected numerous businesses, including Kroger. It has been difficult to conduct usual operations as clients retreat to their homes and rely on online retailers more. Such pandemics highlight the need for flexibility especially when physical operations are threatened by external factors. However, Kroger continued with operations without many safety precautions, placing its employees at risk of infection (Repko, 2020). Despite the high profits it recorded, the lack of empathy for its workers may threaten its success more than a pandemic.

Kroger’s biggest success or missed opportunity to respond to a recent or current social issue.

Early in the year, Kroger shut down five stores in Los Angeles. The closure was motivated by reducing profits due to the pandemic. However, it portrayed he company as selfish for considering profits only and failing to think about the employees and the accessibility of groceries for the community (Lawson, 2021). This was a missed opportunity because Kroger would have supported the community and workers by allowing stores to operate at a time when all other entities and individuals were recovering from the pandemic.

How did it impact company performance?

The closure reduced the physical presence of the company in Los Angeles. This provides the community with a valid reason to seek out alternative retailers. In addition, the company lost the thin margins obtained from the stores. Thus, its profits were reduced significantly. Most importantly, Kroger lost the goodwill of LA’s community, especially those who were affected directly. The closure led to layoffs at a tough time while other retailers continued to buffer their staff members from the pandemic’s effects. At least 250 employees lost their livelihoods through the stores’ closure. Groceries are scarce in South Los Angeles (Lawson, 2021). This creates a need for current players to commit to bridging the food gap that may be present. Thus, groceries should not only consider profits and place but also people.

Sources

The Kroger Co. (2017). The History of Kroger. Retrieved from Kroger: https://www.thekrogerco.com/about-kroger/history/

Lawrence, A. (2020). Business and Society: Stakeholders, Ethics, Public Policy. McGraw-Hill Irwin.

Lawson, M. (2021, April). Shame on Kroger for Closing LA Area Stores. Los Angeles Urban League.

Repko, M. (2020, November). ‘We haven’t learned’: Grocery workers face new challenges as Covid worsens, pandemic fatigue sets in. CNBC.

The Kroger Co. (2020). Our Business and Operations. Retrieved from Kroger: https://www.thekrogerco.com/about-kroger/our-business/

Weiss, J. W. (2014). Business Ethics: A Stakeholder and Issues Management Approach. Berrett-Koehler Publishers, Inc.

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Preparation
According to the textbook, the current world economy is increasingly becoming integrated and interdependent; as a result, the relationship between business and society is becoming more complex. In this assignment, you will be researching a Fortune 500 company from an approved company list provided by your professor.

Evaluating a Corporate-Societal Relationship – Kroger Co

Instructions
Write a 4–5 page evaluation of your chosen company’s performance with respect to its stated values. Do the following:

Summarize the company’s primary products and or services.
Suggest three ways in which the primary stakeholders can influence the organization’s financial performance. Provide support for your response.
Describe two critical factors in the organization’s external environment that can affect its success. Support your assertions.
Assess the company’s biggest success or missed opportunity to respond to a recent or current social issue. How did it impact company performance?
Integrate at least two supporting resources from the Strayer University Library or other reputable sources.

This course requires the use of Strayer Writing Standards. For assistance and information, please refer to the Strayer Writing Standards link in the left-hand menu of your course. Check with your professor for any additional instructions.

The specific course learning outcome associated with this assignment is:
• Evaluate the relationship between a business and society based on external environmental factors, stakeholders, and corporate social responsibility issues.