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At a Crossroads: Strategic Choices at Sustainable Supermarket GreenPrice

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At the height of the COVID-19 crisis, Terence Hon, cofounder of Hong Kong’s first sustainable supermarket, GreenPrice, had the option of selling pandemic necessities that were in high demand in addition to his core business of selling short-dated products. Having founded the venture several years ago with teammates Allison Chan, Ben So, and Cherissa Hung when they were still university students, Terence and his cofounders pondered whether they should accept an offer that was tempting for its high margins, even as they needed to determine whether it contributed to their business objectives and their social mission as the first supermarket chain in Hong Kong that sold short-dated products that otherwise ended up in landfills. In addition, while GreenPrice had faced the challenge of high rents in the expensive, real estate–driven city, the ongoing health crisis caused vacancies in shopping malls to go up, resulting in a significant decrease in shop rental fees. Terence and his cofounders needed to make strategic choices on whether to enter the market for pandemic products while determining the optimal locations for expanding their retail network and the customer segments that they should target.

Learning Objective:

This case was developed for undergraduate and postgraduate students taking courses on strategy, sustainability, innovation, and entrepreneurship. This case lends itself to the following teaching objectives. After discussing the case, students will be able to:

  1. Describe the external environment that GreenPrice faces by using the PESTEL framework, which covers political, economic, social, technological, environmental, and legal factors.
  2. Analyse the structure and competition in the supermarket industry in Hong Kong by using Michael Porter’s Five Forces, which cover threat of entry, power of suppliers, power of buyers, threat of substitutes, and rivalry among existing competitors.
  3. Examine the competitive strategy of GreenPrice by using Kim and Mauborgne’s concepts of “red oceans,” “blue oceans,” and “value innovation,” and determine the extent to which GreenPrice has adopted a “blue ocean strategy.”
  4. Articulate their ideas for further developing the competitive strategy of GreenPrice, by identifying the company’s target customers, opining on the merits and drawbacks of entering the market for pandemic products at the height of the COVID-19 crisis, and considering real estate trends for the expansion of the company’s network of retail stores in Hong Kong.
  5. Debate the potential options for strengthening GreenPrice’s competitive strategy in the future in light of consumer behaviour, which includes the increased popularity of online shopping and the higher emphasis on luxury and super premium products in Hong Kong as compared to other cities in the Asia Pacific region.  

Year of Publication: 2024
Ref. No.: 24/790C
Discipline: Organizational Behavior and Leadership
Industry: Retail & Wholesale
Country: Hong Kong SAR
Company: GreenPrice
Languages: English
Pages of Text: 10