SummaryValue Discount Stores is a ten-unit full-line discount store that suffers from poor customer service. The company hopes to improve its customer service level not only to better serve its existing client base, but also to thwart possible entrance by a regional discount store competitor.
Value has a problem with customer service as indicated by the number of customer complaints they receive and a perceived problem with lost sales due to stock out conditions. Customer service is a broad term, but in Value's case, includes the level of knowledge possessed by their employees, the amount of time that customers wait in checkout lines, the availability of merchandise and merchandise returns. If the company is able to adequately solve these problems, the possible entrance of a competitor into the market will not be a significant issue because the company will have developed a loyal customer base and may benefit from the increased activity that competition would bring.
Value's main strength is that it is currently one of the few discounters located in the area. Because of its position as the dominant player in the discount market, the company has the potential to build an extensive and loyal customer base that could withstand additional competition. The best way for the store to do this is to establish itself as a place where consumers find what they want, when they want it, at a price that they are willing to pay.
The company's greatest weakness at this point is its lack of commitment to customer service. Customers come to the store expecting to find sale merchandise, only to discover that the store is out of the item. While Value issues rainchecks, it is inconveniencing its customers and giving them reasons to shop at other establishments. Improving its customer service and providing knowledgeable personnel and a convenient environment will enhance the company's ability to compete.
Value has the opportunity to impr...