Disco case
Disco is not sure what corporate and marketing strategy to implement giving the opportunity and circumstances of their current situation. After being approached by Royal Ahold, Disco is reconsidering its current strategy of “market penetration of its stores” (1), and want to seek opportunities to generate more success either with a global company or acquire a current company that has had success in neighboring Latino countries.
Situation:
After Banco Velox purchased Disco, the supermarket subsidiary became a very successful operation in Argentina. Its net sales increased by 220.4% from 1991 to 1997. Although Disco suffered a loss of $29.3 M before the restructuring, it is now earning profits of $24.0 M. Disco is not only profitable but it is also managing its risks well enough to walk away from the Argentinian “tequila crisis” relatively unscathed suffering only 0.2% less gross profit margin than the year before. The company also has a solid operating strategy with focuses on location of its supermarkets, assortment of its products, great customer services, and competitive pricing. Disco also stands out in its product concentration in the food category having “over 85%” (1) of the product mix being food. What differentiates Disco from its competitor is its 4th pillar: customer services. In addition to membership cards, and store credit cards, Disco offers free same-day home delivery from its stores, Discoflash (checkout counter where customers could leave their full carts to be checked out by employees and delivered to their homes for a small fee), purchasing using telephone, and the internet, in addition to other customer convenience perks like childcare centers, photo shops, environmentally friendly cleaning service. The company has a very organized model where the company’s procedures “with respect to billing, purchase orders, storage” (4) and even architectural guidelines are standardized. The standardization of the organization extends to its supply chain
Situation:
After Banco Velox purchased Disco, the supermarket subsidiary became a very successful operation in Argentina. Its net sales increased by 220.4% from 1991 to 1997. Although Disco suffered a loss of $29.3 M before the restructuring, it is now earning profits of $24.0 M. Disco is not only profitable but it is also managing its risks well enough to walk away from the Argentinian “tequila crisis” relatively unscathed suffering only 0.2% less gross profit margin than the year before. The company also has a solid operating strategy with focuses on location of its supermarkets, assortment of its products, great customer services, and competitive pricing. Disco also stands out in its product concentration in the food category having “over 85%” (1) of the product mix being food. What differentiates Disco from its competitor is its 4th pillar: customer services. In addition to membership cards, and store credit cards, Disco offers free same-day home delivery from its stores, Discoflash (checkout counter where customers could leave their full carts to be checked out by employees and delivered to their homes for a small fee), purchasing using telephone, and the internet, in addition to other customer convenience perks like childcare centers, photo shops, environmentally friendly cleaning service. The company has a very organized model where the company’s procedures “with respect to billing, purchase orders, storage” (4) and even architectural guidelines are standardized. The standardization of the organization extends to its supply chain