Sample SWOT Analysis for Business: The Kroger Company

business planning
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An important part of starting a small business is understanding what your business does well, where it could use improvement, ways you can grow or boost your business, and things that may hurt your business in the future. The best way to analyze all of these elements is by doing a SWOT analysis.

A SWOT analysis is a useful process for businesses to gain an understanding of their marketplace. By reviewing the strengths, weaknesses, opportunities, and threats of your company, you can respond to changing market conditions.

When conducted thoroughly, a SWOT analysis can uncover a wealth of information, and can be useful in a number of situations, from business strategy to marketing.

As an example of how it works, we have completed a SWOT analysis of The Kroger Company. The Kroger Company is one of the world's largest grocery retailers, founded by Bernard Kroger in 1883 in Cincinnati, Ohio, and now employing 343,000 people.

In 2015, The Kroger Company had fiscal sales of $109.8 billion through its operation of more than 3,000 supermarkets and multi-department stores. The Kroger brand operates under various grocery, convenience store, and jewelry banners, including Kroger, Ralphs, Dillons, Tom Thumb Food Stores, Turkey Hill Minit Markets, QuikStop, Fred Meyer Jewelers, and Littman Jewelers. The Kroger Company is also in the personal finance space with a joint venture with U.S. Bank.

Strengths

The Kroger Company has a significant market share in 49 markets covering 34 states.

This geographical diversity helps the business sustain its competitive strengths. With a valuable private label business, innovative formats, and customer service focus, the company can compete against the likes of WalMart and Target super centers.

Weaknesses

The company operates 37 manufacturing plants; various Kroger manufacturing plants include dairies, bakeries, beverage plants, and meat plants.

Food manufacturing represents a risk of food contamination. A serious contamination can damage the company's brand and hurt corporate profits.

Opportunities

The expansion of the company into the financial market with the launch of Kroger Personal Finance (KPF) together with U.S. Bank provided a strong ongoing opportunity or The Kroger Company. KPF provides personal finance products and services including credit, prepaid debit, gift, and reloadable debit cards; pet insurance for dogs and cats; ID theft and fraud protection, and credit monitoring services; and in-store money services, such as check cashing, coin counting, and money transfer services.

Threats

A recovering economy with higher levels of inflation affecting the price of food and greater fuel costs impacting transportation cost, The Kroger Company may experience lower profit margins. Cost conscious consumers may shift their buying habits to less high-end foods and gourmet items (with greater margins) to lower margin food items.

This demonstrates how a SWOT analysis works. Typically presented in a matrix format, a full scale SWOT analysis would uncover five to 10 points in each category to fully explore the business in-depth.

Edited by Alyssa Gregory