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Poor supply chain management systems for ordering and stocking existed whereas new entrants into the industry e.g. Wal-Mart quickly adopted new technology and had a competitive advantage over its competitors Failure to effectively launch a new supply chain management system after two years and reluctance to implement other proposed IT initiatives
The vertical structure of the organization also contributed to the slow adaptation to change especially in the rapidly changing grocery industry during the 1990s. Store responsibility was at a district level and this did not enable the shop managers to make swift decisions pertaining to any local changes, they had to consult at district level first.
The original structure of the C & C Grocery stores caused a disconnection between the store managers, and the perishable managers (meat and produce managers). The meat and produce managers report directly to the district managers of their prospective departments.
However, the store managers were responsible for the daily operations of the entire store. This disconnect in itself is a major disruption in productivity. The District Director was the only person in the work breakdown structure that knew what was going on in his district within all sections of every store. It becomes difficult for that operation to function as a whole in the absence of that individual
Again this was caused by the disconnection between the store managers, and the perishable managers (meat and produce managers). Though working for the same company they seemed to have different goals for one store.
With the emergence of new grocery formats such as warehouse clubs, dollar stores increased competition forced firms to compete with each other for the same customers by lowering prices. The company began to face a decline in its business due to its traditional grocery formats as most had introduced a one stop shopping concept with non-food items such as pharmaceuticals in store, or a specialized deli section.