Mercadona strategic and RRHH analysis

About the company:

Mercadona S.A. is a family-owned company chaired by the Spanish businessman Juan Roig. As a curiosity, the name of the company was inspired by the name of an Italian pasta brand, Mercadonna, whose name was slightly modified to give the name to the supermarket chain. is one of the leading physical and online supermarket companies in Spain.

The company was founded in 1977 by the Cárnicas Roig Group, it currently has more than 1,630 stores throughout Spain and a staff of 90,000 excellence-oriented people, 300 of them from Portugal on the occasion of the opening of its first stores in this country during 2019 according to the company's own annual report. We can also highlight that Mercadona is the leading company in food distribution in Spain according to the EAE Business School (2013). On the other hand, 5.3 million families decide to do their shopping in these establishments, and this represents 15.3% of the market share in relation to total surface area and distribution sales in the country.

Business model:

Its business model is based on offering the best products at the smallest possible price, hence the great importance of its private label brands, each of which focuses on a specific part of the home:

- Hacendado: food-related products.

- Bosque Verde: household cleaning products.

- Deliplus: hygiene and beauty products.

- Compy: products for pets.

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The main basis for decision-making at Mercadona is to achieve customer satisfaction. Based on this, there are a series of objectives and strategies that support the culture of participation among the five components established in the total quality model, which are responsible for generating innovative growth that sustains the company. The total quality model aims to achieve satisfaction in each of the stakeholders:

- The boss: our goal is to fully satisfy customers.

- The employee: he/she is in charge of satisfying the boss.

- The supplier: who is the backbone of Mercadona, as far as food is concerned.

- Society: which contributes to the economic development of the company by demanding and purchasing its products.

- Capital: as the main objective and remuneration for a job well done.

According to Mercadona, its success will derive from its five components being satisfied; if one of them is not, this could harm the others. (MERCADONA S.A., 2020).

Mission and vision:

Other relevant information about the company would be about the mission and vision of Mercadona. First of all the main mission is: "to fill the belly". An objective that they achieve in part through their low-price policy. Therefore, Mercadona seeks to satisfy the needs of all its stakeholders, including customers, employees, suppliers, society and capital, in addition to achieving maximum profitability through its differentiation in price and quality.

On the other hand, the company's vision is to achieve leadership in Spanish supermarkets through the distribution and marketing of own-brand products, as well as to gain the trust of its customers by being a competitive company with its own corporate image, differentiated from its competitors.

CSR actions:

In terms of CSR actions, Mercadona is also concerned about the environment and sustainability. The company has set itself the goal of trying to reduce the environmental impact of its activity on the planet, and to achieve this goal the company has invested 43.7 million euros in environmental protection by 2020.

Analysis SWOT:

Strengths:

Innovation in products and technology, it is true that Mercadona is always innovating with new products to meet customer needs both in offering new products and new supermarkets.

Great acceptance of the white brand, since it is of very good quality and they have achieved that the public accepts it, consumes it and prefers it to other brands.

It does not need advertising, it is the leader in the food sector in Spain, the only advertising is done by its own customers, talking about the quality of its products and their price. (WOM - word of mouth)

Efficient attention to customer suggestions and complaints, Mercadona is a chain that always attends to customer complaints even through social networks. Many times the company withdraws a product, customers complain through social networks and they put it back on sale improved or changing the packaging. In that sense, customers feel cared for by the company.

High market share, this has been achieved by its good work in its establishments. Financial stability, it is understood that having a very large turnover can lead to a very high and stable financial stability for the company.

Human resources management, it is well known that most of Mercadona's workers are very happy in their jobs and with their salaries. It is therefore understood that HR management is very good and efficient.

Threats:

Loss of consumer purchasing power, it must be taken into account that Mercadona itself does not have control over the purchasing power of consumers or customers, but it is a threat since they would have to lower costs, and if this were not possible they would have to lower profits. Otherwise what will happen is that they will have less sales.

The consumer seeks to pay less (economic crisis), the consumer will always look for the product that best meets their needs at the lowest cost. This happens because the economic crisis of 2008 hit our country in a very serious way and therefore the pockets of Spanish families. This section is related to the previous point explained.

During the last few years, a major problem that Mercadona has had, for which many customers have complained, has been the constant rise in prices due to global inflation.

This is a very competitive sector, but supermarket chains are one of them due to the large number of competitors in the sector such as DIA, Caprabo, Eroski, Lidl...

Weaknesses:

Little variety of brands, it is a weakness because by offering little variety of brands, if customers in some products prefer another brand they do not have the possibility of buying it in that establishment,

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