This case describes a hypothetical situation faced by a fictitious international conglomerate, ICL, that intends to enter the retail grocery market in Hong Kong. The conglomerate's interest in the Hong Kong supermarket industry was initially kindled by the plan of Hutchison Whampoa, Ltd. (HWL) to sell its leading supermarket chain PARKnSHOP in August 2013. However, in October 2013, HWL reversed course and decided not to sell PARKnSHOP, saying that the sale would not deliver maximum value to its shareholders. Before embarking into new territory, ICL wanted an in-depth understanding of the Hong Kong grocery market environment, competitors, and potential barriers to entry. The conglomerate was aware that the new Competition Law, which was expected to take effect in 2015, might have profound implications on the grocery market landscape in Hong Kong. Case Study Question. 1. What strategies did PARKnSHOP and Wellcome use to overcome the challenges posed by their competitors? Are there legal risks in pursuing such strategies with the Competition Ordinance in place? What is the impact on consumers when supermarkets try to defend their market share?
This case describes a hypothetical situation faced by a fictitious international conglomerate, ICL, that intends to enter the retail grocery market in Hong Kong. The conglomerate's interest in the Hong Kong supermarket industry was initially kindled by the plan of Hutchison Whampoa, Ltd. (HWL) to sell its leading supermarket chain PARKnSHOP in August 2013. However, in October 2013, HWL reversed course and decided not to sell PARKnSHOP, saying that the sale would not deliver maximum value to its shareholders. Before embarking into new territory, ICL wanted an in-depth understanding of the Hong Kong grocery
Case Study Question.
1. What strategies did PARKnSHOP and Wellcome use to overcome the challenges posed by their competitors? Are there legal risks in pursuing such strategies with the Competition Ordinance in place? What is the impact on consumers when supermarkets try to defend their market share?
1.In order to overcome the obstacles given by its rivals, PARKnSHOP and Welcome have employed a range of techniques, such as aggressive expansion, product innovation, intensive marketing and promotion, and the creation of effective supply chain management systems. According to Hong Kong's Competition Ordinance, which is anticipated to go into force in 2015, some of these tactics might be prohibited. An instance of anti-competitive pricing conduct would be aggressive price discounting. Such actions by supermarkets could eventually result in increased costs for customers.
2,One of PARKnSHOP's primary strategies for overcoming obstacles created by its rivals has been aggressive expansion. The company's store network has been quickly growing in recent years, and it now has over 200 locations around Hong Kong. This is hostile PARKnSHOP has been able to hold onto its market share despite fierce competition from Welcome because to expansion.
3.Product innovation has also been a crucial tactic employed by PARKnSHOP to set itself apart from its rivals. The business has started a number of new projects, including an internet shopping service and a reward programmed. These developments have assisted PARKnSHOP in maintaining its position as the market leader and luring new clients.
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