Research Proposal on "Migros Company Visit"

Research Proposal 4 pages (1455 words) Sources: 2

[EXCERPT] . . . .

Migros Company Visit

Introduction number of corporations of all types have discovered that adopting so-called "green" or environmentally friendly and socially responsible business practices can pay large dividends in terms of more efficient operations and engendering consumer good will, but grocery retailers have largely been absent from this movement with a notable exception. The Swiss grocery retailer, Migros, has been in the vanguard of corporations that have focused on improving the quality of life for its partners and the customers it serves through such practices, which is a truly remarkable approach to doing business for grocery stores which traditionally have been compelled to compete using razor-thin profit margins in a highly competitive environment. While these business tactics have not always worked out the way the company envisioned or desired, to its credit, Migros continues to adhere to these socially responsible business practices today and expects them to help fuel its continued growth into new markets in the future. To determine what factors have played a role in the company's growth to date, this paper provides an overview of the company's history, some key facts and figures about Migros, its corporate strategy/philosophy and current and past issues that have affected the company. A summary of the research and lessons learned are provided in the conclusion.

Review and Discussion

History of the company.

Established in 1925 by Gottlieb Duttweiler, Migros has grown from its humble origins operating from a few Model T. trucks and 16 employees in Zurich to emerge as a major grocery retailer and employer in Switzerland today (About Migros, 2009). According to Migros' corporate Web site, "With a starting capital of 100,000 francs, Gottlieb Duttweiler bought five Model T. Ford trucks and stocked them with six basic products (coffee, rice, sugar, pasta, coconut oil and soap) which he offered at up to 40% cheaper than his competitors" (About Migros, 2009, p. 1). Opening its first self-service store in 1948 (About Migros), Migros has diversified from these six basic products over the years and now offers its customers a one-stop shopping experience that rivals American-based Wal-Mart. According to Migros' corporate Web site, "Whatever you think Migros is, you are right because Migros is as versatile as hardly another company in Switzerland: it's shopping centers, publishing, travel, banking, industrial management, sponsor, culture and photographic processing, airline services, bakery good and even a lot more" (About Migros, 2009, p. 2).

Key figures and facts.

Today, Migros is the largest retailer in Switzerland as well as being one of the 500 largest companies in the entire world (About Migros, 2009). According to Reinhardt and his associates, "Primarily a retailer for foods and near-foods products, the cooperative Migros, with close to 600 retail outlets in Switzerland (but only four outside its domestic market), is facing stiffer competition, both from existing competitors (such as Coop) and new arrivals (such as hard discounters Lidi and Aldi)" (p. 37). The company employs almost 80,000 people and has annual revenues in excess of 20 billion francs (About Migros). Further, in 2007, Migros purchased a 70% share one of Switzerland's other leading retailers, Denner, which specializes in the sale of alcohol and cigarettes (Swiss retail market consolidates, 2007). According to this report, "Both companies said the deal would secure the long-term future of the discount chain at a time of increased competitiveness since the arrival of foreign retailers in the Swiss market, such as Germany's Aldi, and France's Carrefour" (Swiss retail market consolidates, p. 3).

Strategy/philosophy.

One of the key strategic approaches being used by Migros is expanding its operations into European countries that until recently were either closed to such expansion or were deemed unsuitable for the company's corporate philosophy. Things have changed today, though, and according to Sternquist and Kacker (1999), "Backed by long experience in international retailing, mature European retailers such as Migros would want to get more involved in the historic task of privatizing and rebuilding retailing activity in these countries. To many of them, it is a challenging opportunity and a great learning experience experimenting with hitherto successful concepts in an unfamiliar and often unpredictable environmental setting" (pp. 163-164). Likewise, Reinhardt et al. (2005) report, "In October 2005, Urs Riedener, head of marketing at Swiss retailer Migros, is contemplating the company's competitive position. Riedener and Migros management have so far always had faith in Migros' position in the marketplace, built around… READ MORE

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