Why and how has the competitive market place for SAB changed in the last five to seven years?

CASE 1.1

Central Transport, Inc.

Jean Beierlein, president and CEO of Central Transport, has just met with Susan Weber, the current president and CEO of SAB Distribution. Jean was promoted from COO at Central Transport to CEO. Her predecessor had worked closely with the former CEO of SAB Distribution when SAB transformed its operations about 10 years earlier

to respond to changes in its competitive marketplace. Now, Ms. Weber is faced with new challenges and wants the collaboration of Jean and Central Transport to transform again.

 

Susan has met extensively with the old and new members of her executive team (several old timers  left the organization when Susan had announced her planned changes) and has developed a

tentative plan for modifying the strategic direction of SAB. Susan is convinced that SAB can attract some larger retailers in the mid-

Atlantic states if it changes its business model to add services similar

to third-party logistics companies, namely, warehousing, transportation delivery, and inventory management. However, Susan feels that she needs a major collaborator with experience in these areas. She also feels that it would be better if the collaborator is a company SAB has worked with previously on a successful basis and that is willing to take on some new challenges.

 

Susan has decided to approach  Wegman’s Food Markets, Inc. as a customer for these new services. Wegman’s is a very successful

company in the Northeast that is privately owned and has expanded carefully into new market areas over the last 15 years. It offers more value services to its customers, including an in- store bakery, a restaurant and deli, more take – out options, and in – store cooking demonstrations. Wegman’s primary distribution point for its stores is located in a distribution park in Rochester, New York, near its corporate headquarters. With its store expansion into the Washington, D.C., area and points further south into Virginia, Wegman’s is developing a new distribution park in Northwestern  Pennsylvania to lower its cost and improve its service. With the state of the economy, Wegman’s is  feeling the pressure to be more competitive on a price basis. Susan is also convinced that Wegman’s has to be price competitive to continue to grow in- store  sales and expand its market opportunities. She feels that Wegman’s will listen to her proposal to

offer expanded services to help it be more competitive. Now, she wants Central to join with SAB in making Wegman’s a proposal. Jean wants your help in developing a positive response to Susan.

 

CASE QUESTIONS

1. Why and how has the competitive market place for SAB changed in the last five to seven years?

2. What advantages might Central experience in the proposed new venture?

3. What issues would SAB and Central face in the proposed new approach?