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Rachel Russell MGMT-630 Dr. Noumair July 17, 2011

The Case of C & C Grocery Stores- An Analysis In 1947, brothers Bob and Doug Cummins began C& C Grocery, which prospered under the leadership of Doug Cummins informal style and serve the customer attitude (129). By 2001, the successful grocery store had greater competition stemming from major retail giants such as Costco Wholesale, Wal-Mart, and Target. An analysis was applied to determine ways in which the grocery store could distinguish itself from the competition, and the analysis conducted by independent consultants concluded that there were four main areas which needed improvement (129). The identified areas for improvement addressed that the store was slow to change when necessary, the leadership structure, specifically the roles of district store supervisor and the store manager, prevented the stores from functioning at their best and caused dissatisfaction amongst the managers, cooperation within stores and overall morale were low, and long-term growth and development of the store chain would probably require reevaluation of the stores current long-term strategy (129). The consulting firm recommended specific changes to address these concerns as brought forth. This paper seeks to analyze the recommendations given by the consultants to determine if the proposals given will be effective in addressing the problem areas identified in the case study.

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Problem Area #1- Stores are slow to adapt and/or change The first area identified as needing improvement was that the stores were slow to adapt to change. The independent consultants noted that each store did things the same way (129) despite the differences in location and clientele, and that the layout and structures were virtually unchanged since the stores inception (129). The analysis also noted that while a new computerized supply chain management system had been created for the stores, it had only partially been used by the stores, and other proposed developments had not even begun to be created, much less implemented (129). This analysis highlights that the stores had not changed layout or standard operating procedures since 1997. This lack of adaptability greatly hurt C&Cs ability to compete with newer stores which catered more to the customers needs. The consultants decided to recommend a reorganization of the management structure which would provide store managers with greater responsibility over the new department managers located within the stores, instead of at a district level (131). The reasoning concluded that this would encourage the stores to adapt to local conditions. While this is a sound recommendation, as each store manager would have a greater understanding of the needs of their local store, it does not entirely meet the needs to thoroughly cover the necessary changes to C&C stores. For this reason, the consultants also concluded that at a district level, new positions could be created to include managers for pharmacy, specialty, and other major departments, and an information technology coordinator (131). This proposed solution will work well to address the necessary changes in management and in technology advances that can be made in order to better serve customer needs; however, in the case it also states that the stores had used the same layout in the buildings since 1997. This

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is the one area which is left unaddressed by the consulting firm. Since C&C is looking at improving the stores already in existence, there should be an analysis of which ways that these stores must be physically reorganized to make the changes intended at the district level. Stores which do not currently have space for pharmacy, specialty items, et cetera, must be physically reorganized to allow for these departments to come in. This reorganization of space should be completed by professionals who will be able to best make use of the space provided, working with the district meat, produce, and merchandise specialists to ensure that the reorganization of the stores allows for an easy flow for shoppers, improving the shopping experience, and not haphazardly by managers looking to squeeze in space for new departments. Essentially, the recommendations of the consultants will work; however, the proposed solution will work better if the actual physical reorganization is also addressed. Problem Area #2- Ineffective leadership structure Under the original model, C&C grocery stores had a leadership structure which had the district manager overseeing the store managers, and the district meat, produce and grocery managers overseeing the store meat, produce and grocery managers (130). This effectively rendered store managers incapable of running the stores, as they had no authority over the store meat, produce and grocery departments. This also provided store managers with little experience in general management skills, little exposure to merchandising, meat and produce operations, and no training for store managers, with district visits focusing solely on the cleanliness of the store and adherence to operating procedures (130). Store managers were unable to coordinate product promotions and had no authority over use of store space (130). All of these factors impeded store management, and affected the overall customer experience.

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The consultants assigned to C&C recommended that the management structure change, having a district director who can oversee an operation manager, grocery merchandiser, meat merchandiser and produce manger, and store managers. The operations manager, grocery and meat merchandisers, and produce managers would oversee specialists who would act as liaisons from store level department managers to the district level; however store level managers would retain authority over the store level department managers (131). The consultants reasoned that the change in structure would allow the store managers the ability to determine space requirements for product promotions and store space, give them experience in general management skills, exposure to merchandising, and free up district managers to focus on training and higher management skills (131). The consultants determined that this change in structure would alleviate the problems caused by the current leadership structure which they deemed ineffective. This would also allow for future growth as new departments such as information technology, pharmacy, specialty goods are added. The new structure proposed by the consultants effectively gives clarity to the job descriptions of each level of management, and provides opportunities for growth, both for the individual managers looking to advance, and for the stores themselves, as new areas are added. It resolves the dissatisfaction found at the management level, giving store managers more responsibilities and district management different and expanded responsibilities. The changes also allow for store managers to have the ability to impact their local stores with a more hands on approach, allowing the individual stores to cater more towards the clientele who frequent the stores. The recommendation for the restructure of the management chain of authority is a sound proposal which will serve to correct the current grievances of store management, providing both for the managers and allowing them to provide better services to the customer.

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Problem Area #3- Cooperation within stores and morale Under the previous system, many of the stores began experiencing low morale and developed cooperation issues within each of the stores. Each of the departments, produce, grocery and meat, concerned only with their own sales and reporting to their own respective district managers, did not work well together, and as cooperation within the stores deteriorated, the overall stores were impacted. An example was given in the case where a store manager wanted to use floor space in meat and produce sections to advertise a store promotion and was refused the space, with the meat and produce managers refusing the space because the store promotion did not help their sales, only the sales of the grocery department (130). This system encouraged separation of departments within each store, and was ineffective, creating low morale within the stores and impeding business. The consulting teams recommendation for an overhaul of the management structure is intended to also help combat C&C grocery stores problems with cooperation within the stores. By changing the management structure, the consulting team believes that the store managers will be able to coordinate efforts amongst each department to provide the best services for their local area, providing a stronger emphasis on the store team to improve coordination amongst the different departments which will help streamline operations, and by creating a store team as opposed to a meat team or a produce team, the consultants propose the reorganization will create a friendlier atmosphere within the stores, which will positively affect the overall morale within the stores. Reviewing the recommendations of the consultants, it is clear to see that there is confusion amongst all of the employees that derives from the previous management structure. By recommending that the stores provide the store managers with the authority over their stores

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to oversee all of the respective departments, store managers will be able to coordinate space, product promotion and services amongst all of the departments, allowing the departments to complement one another instead of competing with one another. The recommendation of the consultants will work to ensure that the departments increase cooperation within the stores. The other side of this recommendation is that the management structure change will serve to improve overall morale. This may or may not be true. It is logical to assume that the inability to do the jobs required has impacted employee morale; however, morale can be affected by more than just poor management. The case study alludes to, but does not thoroughly investigate the reasons why the morale at C&C grocery stores was poor, so it is impossible to determine if the simple act of a structure change will effectively repair the poor morale within the stores. If the sole cause of the poor morale at C&C grocery is a lack of defined, coordinated leadership and lack of training, then the proposed management restructure will go a long way in repairing the morale problem; unfortunately, in the case study of C&C grocery, there is not enough information given to make that leap. Problem Area #4- Long term growth strategy Due to the incoming retail giants entry into grocery, C&C grocery faced competition which effectively pulled a percent of the market away from their stores. C&C grocery is faced with a need to introduce changes and develop a long-term growth strategy in order to compete in the ever dwindling market (130). The areas which were shown to have potential as areas to focus the long-term grown strategy were adding non-food items for one-stop shopping, introducing specialty or gourmet sections within the stores, improving technology, marketing and promotion, providing superior services and convenience, and providing the best in product variety and availability (130).

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The consultants suggested that using the model implemented to address the previous three issues, that future growth could be incorporated to include new management chains which would be necessary to oversee any new growth operations. The case notes that new managers could be added to oversee new areas such as pharmacy, gourmet/specialty items, or other major departments, allowing for future growth in any direction that the company may choose to head in the future (131). The consultants also suggested that the district teams be expanded to include an information technology coordinator to act as a liaison between district and store management. This was recommended to bring the information technology in the stores up to date to correct the deficiencies in current information technology and to bring ideas currently on the back burners to the forefront. In analysis of the recommendations of the consultants in regards to long term growth it is clear to see that the options brought forth will meet the needs of C&C grocery stores. By providing a built in system for new departments to be added as necessary, the proposed plan allows the stores to cater to the needs of their local consumers, without forcing new departments which would not take in certain markets on the stores. This allows stores which would benefit to partake of expanded departments to have a fluid management dynamic in place which will support the growth necessary in the future to compete with larger chains such as Wal-Mart and Target. Additionally, by expanding information technology use in the stores, C&C will be able to do more with less, and reduce waste and trim down excesses, while still providing customers with the very things noted as being essential to C&C success, superior customer service, product variety which meets the needs of the customers, and greater product availability. The consultants plans for long term growth cover all of the bases necessary in order to ensure that

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C&C can not only meet their needs for growth from the stores of 1947 to 2011, but proceed into the future with an eye on adaptability and growth to meet the needs of the consumers. Conclusion C&C grocery began as a small store started by two brothers in 1947, and has since grown to be a chain of several hundred stores. Currently, these stores are faltering due to inabilities to adapt to change, dissatisfaction amongst the managerial chain, poor cooperation within stores and low morale, and a lack of a long term growth strategy. Unless certain changes are made, these stores will be pushed out of business by incoming supercenters and major retail chains. Upon review of the stores in each region that is covered by C&C grocery stores, a group of consultants made the recommendation to restructure the management chain, in order to positively meet the requirements necessary for C&Cs continued success. Upon analysis of the recommendations made and analysis of the problems presented by the current structure of C&C grocery stores, it is shown that the recommendations will be effective in addressing the needs of C&C grocery stores.

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References

Daft, R. L. (2010). Case for analysis: C&C Grocery Stores, Inc. In Organization theory and design (10th ed., pp. 129-131). Mason, OH: South-Western Cengage Learning.