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Performance Assessment Report Wegmans Grocery Stores

WEGMANS GROCERY STORES 2

Performance Assessment Report:Wegmans Grocery Stores

Performance Assessment Report:Wegmans Grocery Stores

Wegmans Grocery Stores began in1916 and have grown to be one of the America’s largest privatecompanies in 2014. Wegmans’ mission, as reported on their website,Wegmans.com, is:

“What we believe – atWegmans, we believe that good people, working toward a common goal,can accomplish anything they set out to do. In this spirit, we setour goal to be the very best at serving the needs of our customers. Every action we take should be made with this in mind. We alsobelieve that we can achieve our goal only if we fulfill the needs ofour own people. To our customers and our people we pledgecontinuously improvement, and we make the commitment ‘every day youget our best.’” (Wegmans – Official Site, 2014).

Major Customers

Wegmans’ major customers covera broad demographic and are based mainly on the demographics of thelocation of the store. The store sells groceries and other items,driving the customer base as those who seek to stock their shelves,refrigerators, and freezers (Wegmans Food Markets, 2014).

Major product/serviceofferings

Wegmans’ largest productofferings are their grocery items. The store has its own privatelabel brand of grocery items that comprises a large portion of itsannual sales. Wegmans offers a wide variety of services to itscustomers, including fresh in-season produce from local farmers(Wegmans Food Markets, 2014). The store also has freshly bakedgoods, deli services, as well as made to order foods. Wegmans alsoprovides catering services and a café style restaurant. Some storesbring in local live music talent while others host car shows eachweek in the summer. According to Hoover’s website, Wegmans holds80 stores that carry about 700,000 different products. The companyhas a very family-oriented mentality, such that one in every fiveemployees are related. Wegmans has approximately 36,000 employeesand grosses about $6,671.684 annually.

Why does Wegmans need anassessment?

Wegmans would benefit from thisassessment in many ways. First, the company has previously reachedthe number one position in the list of top 100 places to work and hassince fallen each year since that achievement. In 2012, the companyranked as the number four place to work in the United States, and in2013 it had fallen by one ranking. For 2014, however, the companyhas fallen to position 12 in the 2014 listing of top 100 companies tobe employed in (Wegmans Food Markets, 2014).

Understanding the causes of thedrop in status on the list will help the company to understand ifthere are any employee related issues that are affecting the droppingposition. The company has very low turnover at 3.6% and it isbelieved that the company’s family atmosphere has aided theiremployee longevity. Because the dropping rank on the listing is anindicator of employee happiness, understanding why the ranking isfalling will help the company to understand its position with itsemployees. This supports the company’s mission, that the employeesand customers are the most important aspects of the company’sfunction.

Reasons to assess Wegmans:

  • Been on top 100 list since 1989

  • Secured #1 slot in 2005

  • Fallen further down the list since then

  • Useful to understand decline on the list

  • Supports mission of company – which is to support the people/employees – they may find something to improve their position on the list

Research Needs

The research process was mainlythrough questionnaires. The research also used observation andexperience to evaluate the effectiveness of Wegmans. Thequestionnaires were distributed amongst employees, the management,heads of departments, customers, and suppliers. The questionnaireswere distributed through random sampling and they were distributed asboth hard and soft copies. The questionnaires were standardized withquestions that focused on ‘how’ and ‘how well.’ The purposewas to find out the effectiveness of the organization in relation toits different stakeholders.

The criteria for determining thequestions in the questionnaires were based on the category ofrespondents. The questions were based on the relationship between thecompany and different people who interact with the company. Thepurpose was to get wholesome responses that covered all aspects ofthe company. This shaped the ‘how’ and ‘how well’ questionsbecause the categories informed the questions. The purpose was alsoto find out the company’s impact in the society in both positiveand negative terms. The total number of employees who participatedwere ten people per store and all heads of departments. The number ofcustomers who participated was based on how busy the outlet is aseach outlet has a different size and different number of customers.The standard procedures were followed with regard to the number ofrespondents as the research is a reflection of the operations of theoutlet.

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The research conducted analyzedWegmans’ performance using Baldrige criteria for performanceexcellence. The analysis focused on leadership, customer focus,strategic planning, operations focus, workforce focus, andmeasurement, analysis and knowledge management (Baldridge performanceexcellence programs, 2013). These categories indicate how well theorganization is performing in the market and inform particular areasthat need improvement in order for an organization to grow. Thebasis of the analysis was on how the company performs in relation tothe categories and how well the company meets the requirements.

  1. Leadership

The leadership was analyses basedon governance, leadership and social responsibility. The governanceof Wegmans is based on internal and external frameworks by which theorganization must adhere to. The external governance structuresinclude clear tax regulatory requirements and this is often conductedby external auditors (Baldridge performance excellence programs,2013). Internal governance involves proper structures that ensurethere are accountability at all levels of management. Wegmans doesthis by ensuring that each departmental head hands in a monthlyreport of performance. Wegmans’ governance is well structured andthis has ensured that there is accountability at all levels ofoperations. The company also has independent external auditors whoensure that Wegmans’ financial records are in line with taxrequirements.

The leadership at Wegmans isresponsible for ensuring that employees are well motivated andcustomers are satisfied. Each outlet has a manager who supervises thedaily operations of the branch and ensures that the company is runbased on internal and external requirements of the company. Theleadership takes care of the needs of the customers and theemployees. This is done by ensuring that store managers take accountof daily events in the stores and handle any cases that may arise.Wegmans meets the leadership requirement well by having branchmanagers, which shows that each store has a proper leadershipstructure.

Societal responsibility is also akey element of modern organizations. Wegmans ensures that it remainsresponsible to the society by offering high quality products thatmeet health and legal standards. The products are also culturallyacceptable and they are sourced from local markets. The employeesworking in the stores are also from the local communities and thisserves to lift the economic standards of the local community(Baldridge performance excellence programs, 2013). The societalresponsibility standards of Wegmans are high with high qualityproducts and a good relationship between the organization, itsemployees and its customers. Based on the above analysis, theleadership score stands at 90% as the company’s leadershipstructure is effective and responsive to market needs.

  1. Customer focus

Customer focus is an importantaspect of the organization as this is the main area of the company.The customer satisfaction is measured by having regular customerbriefings in which customers are required to give their opinionsregarding the company’s performance. Wegmans has platform on whichtheir customers can report their complaints and compliments in orderto help the company improve on its services. Additionally, the branchheads are accessible to customers so that they can handle anycustomer needs as they arise.

The customer satisfactionrequirement is well met as customers have many platforms on whichthey can engage with the management. The customer satisfaction isalso based on the fact that the store stocks most of the groceryproducts that customers require. The customer focus requirement is at80% as the customers are satisfied and there are systematicapproaches on how to meet customer needs (Baldridge performanceexcellence programs, 2013). Wegmans is customer oriented and thestrategies for meeting customer needs and innovation keeps thecustomers satisfied based on their needs.

  1. Strategic planning

This involves setting goals thatare to be achieved within a given period. The strategic planningfunction of the organization informs the organization of its currentposition and the position it plans to be in, within a certain timeframe. Strategic planning at Wegmans is not well articulated as theplanning is majorly based on performances that are set by themanagement. The management often evaluates the company’s resourcesand sets targets based on profit expectations. The strategic planningought to be systemized so that the plans take into account thecompany’s ability to achieve realistic targets. The score onstrategic planning at Wegmans is 50% because there are plans in placebut still needs improvement in order to be effective. The strategicgoals ought to be aligned to the other aspects apart from profits.

  1. Operations focus

Wegmans has branded products aswell as those that are not branded. The products stocked by the chainof stores are informed by market requirements so as to meet customerdemands. The groceries are of high quality and are relevant tocustomer demands and Wegmans often improves the quality throughpackaging. The products are also stocked according to their lifespanso as to sell products that are fresh at all times. The operationfocus is thus relevant to customer needs and requirements (Baldridgeperformance excellence programs, 2013). The operation focus is 95% asthe company effectively meets the market needs and the productsstocked are relevant to market needs. The process of purchasing andselling the products is highly specialized which makes the operationefficient.

  1. Workforce focus

Wegmans has enough employees toserve its clientele and the employees are well trained on how tohandle customers and products. The employee benefits are alsoattractive and the terms of employment keep turnover very low. Thecompany improves its employees through regular training programs soas to improve their skills and knowledge. The employees are welltaken care of, based on labor laws and requirements. The low employeeturnover indicates that the company is a good employer and this iswhat keeps employees from leaving the company. The score of workforceis 95%. Wegmans has a highly effective employee management system andthe organization’s employees operate as a family (Baldridgeperformance excellence programs, 2013).

  1. Measurement, analysis and knowledge management

The management does not have aclear means of analyzing performance as the current system is onlybased on profitability. The management needs to focus on other non-profit related ways of analyzing the performance of the company.However, all the employees of the company are well versed with itsproducts and operations and this creates cohesiveness of purpose andoperation. The knowledge is also based on market needs and theproducts that are available in the market. The analysis is, however,low and needs to incorporate employee and customer satisfaction inthe analysis index. The measurement and analysis index is 50% as thecompany mostly focuses on profitability. The knowledge score,however, is 75% as the employees are knowledgeable about the generaloperations of the company.

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Strengths

Location

Most Wegmans outlet stores arelocated in high traffic areas. These are areas that are frequented bypassers- by and they go about their daily businesses. The location ofthe company is significant as it is part of the company’s strategicplan. The strategic location of Wegmans outlets, is important for abusiness is based on convenience for customers. The customers find iteasy to go to stores that are near their areas of operation due totheir busy schedules. The location of the Wegmans’ stores outletsis medium based on the areas of operation.

Customer satisfaction

According to the research, mostcustomers are happy with the services offered at Wegmans. Customersatisfaction is a significant part of any company as this is whatbrings customers back. The customer satisfaction is based on theservices offered. The store is always fully stocked with whatcustomers require and this brings satisfaction. The customer servicesare also satisfactory in terms of how customers are served andhandled by the members of staff. The customers also cite the generalhygiene of the stores as being an attractive factor. The customersatisfaction at Wegmans is high.

Employee satisfaction

Workers are a significant partof any business as they are in charge of the daily operations of thecompany. The company has a low turnover of employees because it hasgood terms of employment for the employees. The employee-satisfaction is visible in how employees handle their customers. Therespect and punctuality are part of what brings customer satisfactionwith the store. The employees are also an asset as the low turnoverbrings stability to the business and depth of knowledge, which isimportant for any business. The employees are also resourceful inbringing in new ideas which go a long way in improving the business.Employee satisfaction is a high strength as this is the source ofstability in the company.

Brand strength

Wegmans is one of the mostprominent brands in the grocery line of products. The company has along standing history in offering quality groceries and unparalleledproducts to its clients. This is a medium strength and people shopbased on the quality of products and not the brand’s strength. Thebrand strength is also based on a strong market presence and a goodrelationship with its clients. The store has also received severalawards over the years including the most prestigious such as Fortune100 recognition (Hoovers.com, 2014). This places the brandprominently in the market and makes it the most preferred grocerystore in the country. The brand is well recognized in the country asa grocery store and this goes a long way in making it visible.Additionally, the company has branded products, which adds to thestrength of the brand as a grocery store.

Specialization

Wegmans specializes in offeringgrocery products to its customers. The brand is thus well- known forfresh groceries and serves as a one stop shop for groceries.Specialization makes it possible for the company to store the bestgroceries and thus, earn customer loyalty for a variety of groceryproducts. Specialization has enabled the company to get the bestproducts in the market and thus give value to their customers.Specialization also means that customers have faith in the companyand its ability to provide the best products in the market.Specialization is also the key to research and development, which ispart of adding value to the goods that the company sells. The companypartners with suppliers to research on how best to improve productsso as to offer value to its customers. Specialization in the companyis high and this is one of its biggest advantages.

Opportunities for improvement

Cost of operation for preparedfoods

The prepared foods offered bythe company are of high quality and they cost a lot to produce. Thismeans that the cost is passed on to customers and this repelscustomers due to the high prices. The high prices lead to losses whencustomers do not buy the company’s prepared foods and insteadprefer to buy groceries which are cheaper. This weakness is mediumalthough it is costly in terms of storage and losses when theprepared food goes bad.

Limited number of stores

Despite having store instrategic areas, the company does not have many stores, a weaknesswhich keeps it from tapping into markets that are highly populated.The stores are limited and they are located in specific areas, whichmean that the company has not tapped into some areas, which wouldincrease its profitability. The company has stores in high trafficareas, but this leaves out a whole market segment in areas with highdensity of people but low traffic. This is a medium weakness that canbe improved so as to reach a higher number of clients.

Internet marketing

Wegmans has an opportunity toutilize internet marketing so as to reach a wide market segment.Internet marketing is rising channel of communication betweencompanies and their clients and Wegmans ought to utilize the platformto interact with its customers and use it for sales. The company’scurrent use of internet marketing is low and it could improve itsperformance by having a well- developed platform for marketing andinteraction with customers (Hoovers.com, 2014).

Expansion of outlets

Wegmans currently has fewoutlets and this means that it serves a narrow bracket of customers.The company has room for growth by opening more stores so as to reachmore customers. The modern way of life is based on convenience andthus, the company would be best placed to reach more customers byopening stores in convenient areas for customers. This is a highopportunity for the company as it does not face any major competitionand opening up more stores would place the company at an advantageover its competitors. This would increase the company’s revenues byup to twenty percent as it would be ahead of its competitors.

Stocking organic products

The market for organic foods isexpanding rapidly in the United States and thus, stocking organicfoods would increase the market share held by Wegmans. The market forWegmans products is already high and stocking organic foods wouldincrease its customer base and thus improve its profits (Hoovers.com,2014). The current stocking of organic foods is medium and it thusdoes not cover the market sufficiently. Organic products have gainedprominence due to people’s desire to live healthy lives and thishas become a big market for food producers and manufacturers.

Incorporating health clinics instores

Wegmans is a trusted outlet forfood products around America. The company can incorporate healthclinics in its outlets, where experts advise people on healthy foodchoices. This would make the store attractive as health advice can beused as an after- sales benefit. The health clinics will focus onadvising customers based on the foods that the company stocks andthus, improve market share of its products. This can also be amarketing strategy for the company. The use of health clinics iscurrently low for the company and it has the potential of expandingWegmans’ market share.

Based on the above analysis, themanagement at Wegmans is likely to accept my proposal as it focuseson how to improve operations and thus, improve the financialperformance. The management will especially recognize thatprofitability is not the only and most effective measure of thecompany’s performance. There is also need to open health clinics,which would also be an effective marketing strategy. The clinics willfocus on nutritional advice based on the products sold at Wegmans.The management is also likely to agree that there is a need to openmore outlets so as to meet many more customers.

References

BaldrigePerformance Excellence Programs (2013).Criteria for Performance Excellence.New York: United States Department of Commerce.

Hoovers.com. (2014). CompanyInformation:&nbspWegmansFood Markets, Inc.Retrieved From:

http://www.hoovers.com/company-information/cs/company-profile.Wegmans_Food_Markets_Inc.b9c57fce1a26e491.html

Wegmans Food Markets. (2014).Wegmans – OfficialSite. Retrieved From: http://www.wegmans.com/webapp/wcs/stores/servlet/HomepageView?storeId=10052&ampcatalogId=10002&amplangId=-1&ampclear=true