759 Store Case Study

Supermarkets, a place that provided a convenient form of shopping for consumers to consume a wide variety range of food, beverages, and household necessities. In Hong Kong, there is always a supermarket nearby the corner or inside the shopping mall.

In Hong Kong’s grocery retailing industry, the A.S. Watson Group and Dairy Farm International Holdings Limited have turned the industry into a monopoly situation over the last thirty years. A.S. Watson Group operates a number of supermarkets under different brand names that target different sectors of the income groups. The ParknShop is the one of successful brand that under A.S. Watson Group, with over 200 stores in Hong Kong. The Dairy Farm International Holdings Limited has associated and

759 Store has a very clear vision and mission since joining the competition. They have the vision of serving consumers with quality goods, bringing more choices to Hong Kong locals. (759store.com, n.d.) The first mission for 759 Store to overcome when joining the grocery retailing industry, that was crystal clear that to compete against the giants. 759 Store practiced the low price strategy, a price that lowers than any of the recommendation price suggested by suppliers. This led to the incident of Swire Group, 759 Store apparently lost the largest supplier in Hong Kong. However, 759 Store won the support of public, which is out of anyone’s expectations. With support of the public, voices coming from different channels built a more competency 759

As when comparing with the giants, 759 Store has a relatively low bargaining power on suppliers. 759 Store’s suppliers are mainly from foreign countries, thus the risk on currency exchange should always be alert. For example, if Japanese Yen depreciated, company should import more products from Japan, so as to gain more profit margins. Unfortunately if it was Hong Kong Dollars depreciated, consumers might not be willing to spend as much as before. As a result, revenue might be reduced. If serious cut in revenue, might lead to the closure of a branch.

Furthermore, 759 Store should also consider problem might be occurred on the demographic problems and rental arrangements. With rapid development of 759 Stores, it has over 180 branches (759store.com, n.d.). However, none of the rental place is owned by 759 Store, which brings up with the concern of renewing the rental arrangements. The percentage that 759 Store can bear in raising the rental cost should be well-calculated. The worst case, might lead to the closure of a branch if the rental is too costly. Always prepare for a backup plan, in case the renewal rental fee is too costly, any places that is suitable for reopening the