- 16 Mar, 2021
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- 2 Mins Read
: Response -Jackson
Instructions
Please provide 1 page substantive response to the discussions from a colleague in the discussion, critiquing the initial post. Please add one scholarly and one reliable nonscholarly source to both responses.
The Standard & Poor’s 500 company I have selected is the Kroger Company. The
company has come a long way since 1883, when Barney Kroger invested his lift savings
and opened a grocery store in downtown Cincinnati. Kroger is #17 on the Fortune 500,
with nearly $110 billion in sales. The company has enjoyed several years of steady
growth and won customers away from rivals like Whole Foods Market with its big push
into organic groceries and store remodels (Wahba, 2016). Several candidates of
Kroger’s value chain that would be candidates for relocation include customer service
and IT support for stores and distribution centers. Both Customer Service agents and
IT support have large cost per employee. Examples of these cost include hourly wages
or salary, along with health benefits, 401K match, education reimbursements and
retirement pensions plan sponsored by the company. By moving these job functions to
another country, Kroger could cut cost in not only wages, but also in the fringe
benefits offered to its US base employees. The challenges could be getting the new
staff of agents in remote locations trained and ready to support both the customers
and employees. Delays in IT services could create downtime, which can cost the
company large amounts of money in the terms of sales, production and loss of
customers due to dis-satisfaction. By moving customer service to remote locations
outside the US, guests could have issues with communication on getting their concern
or issue resolved. By not providing a sufficient answer or solution, customers could
become angry and shop their dollars at another retailer. If Kroger was to move these
services to a foreign country, they would need to ensure they are fully trained and
capable on the “go live”. Setbacks created from a failure to properly train and plan
could cost more in the long term than the savings gained from cutting the total
employee cost of the US based employees. An important reminder as we make the
decision on keeping the job in the US or outsourcing to a foreign country is to mitigate
risks – external in the industry and country and internal to the company – and uses
company strengths to leverage external opportunities (Industry Analysis, 2019).
REFERENCES
The University of Maryland University College. (2019). Industry Analysis. Retrieved
from https://leocontent.umuc.edu/content/umuc/tgs/mba/mba670/2198/delta/learni
ng-topic-list/industry-analysis.html?ou=424024
Wahba, P. (2016, June 22). 5 Surprising Things You Don’t Know About Kroger.
Retrieved from https://fortune.com/2016/06/22/kroger-fortune500/
company has come a long way since 1883, when Barney Kroger invested his lift savings
and opened a grocery store in downtown Cincinnati. Kroger is #17 on the Fortune 500,
with nearly $110 billion in sales. The company has enjoyed several years of steady
growth and won customers away from rivals like Whole Foods Market with its big push
into organic groceries and store remodels (Wahba, 2016). Several candidates of
Kroger’s value chain that would be candidates for relocation include customer service
and IT support for stores and distribution centers. Both Customer Service agents and
IT support have large cost per employee. Examples of these cost include hourly wages
or salary, along with health benefits, 401K match, education reimbursements and
retirement pensions plan sponsored by the company. By moving these job functions to
another country, Kroger could cut cost in not only wages, but also in the fringe
benefits offered to its US base employees. The challenges could be getting the new
staff of agents in remote locations trained and ready to support both the customers
and employees. Delays in IT services could create downtime, which can cost the
company large amounts of money in the terms of sales, production and loss of
customers due to dis-satisfaction. By moving customer service to remote locations
outside the US, guests could have issues with communication on getting their concern
or issue resolved. By not providing a sufficient answer or solution, customers could
become angry and shop their dollars at another retailer. If Kroger was to move these
services to a foreign country, they would need to ensure they are fully trained and
capable on the “go live”. Setbacks created from a failure to properly train and plan
could cost more in the long term than the savings gained from cutting the total
employee cost of the US based employees. An important reminder as we make the
decision on keeping the job in the US or outsourcing to a foreign country is to mitigate
risks – external in the industry and country and internal to the company – and uses
company strengths to leverage external opportunities (Industry Analysis, 2019).
REFERENCES
The University of Maryland University College. (2019). Industry Analysis. Retrieved
from https://leocontent.umuc.edu/content/umuc/tgs/mba/mba670/2198/delta/learni
ng-topic-list/industry-analysis.html?ou=424024
Wahba, P. (2016, June 22). 5 Surprising Things You Don’t Know About Kroger.
Retrieved from https://fortune.com/2016/06/22/kroger-fortune500/