IFE Matrix

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Strategic Management Analysis of Metro Cash & Carry
Executive Summary:
This report is about the significance and objectives of a Strategic Management and
implementations in the real market. We have chosen a retail industry for this
implementation of strategic management tools for identifying the internal and external
condition of the firm. And for getting the best result we selected the METRO cash and
carry super store in Faisalabad.
This report is mainly concerned with the Strategic Management Tools for METRO
Cash & Carry, the departmental chain business. In this report we have discussed that
on what grounds the METRO has divided its market into different segments, how they
present the product in the mind of the customers. We have surveyed the market and
identified such strategic tools which are very useful for implementing those
strategies tools. And after this process we select the retailers as customers of
METRO store.
Moreover, this report shows the competitive advantage of METRO and we check it
out whether this advantage is actually working efficiently. Analysis of Internal ,
External factors evaluations and SWOT analysis of METRO cash and carry .In this
report we have implement different tools including TOWS, SPACE, IE matrices and
also worked of CPM Critical Success Factor Matrix. After that analysis we have
worked on QSPM decision stage.
After assessing all these things we identify that in which sector the problem arises and
after analyzing we suggests certain recommendations to the company to become more
efficient and profitable company and satisfy their retail customers.
Government College University Faisalabad

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Table of Content
Sr.No Description Page
1. Executive Summary of Metro cash and carry 01
2. Introduction of Metro cash and carry 03
3. Swot Analysis 4-5
4. Vision/Mission Statement 06
5. Stage-I (Input) 07
6. Internal Factor Evaluation 07
7. External Factor Evaluation 08
8. Competitive Profile Matrix 09

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9. Stage-II (Matching) 10
10. Tows Matrix 10
11. Space Matrix 11
12. Internal, External Matrix 12
13. Stage-III (Decision) 13
14. Quantitative Strategic Planning Matrix 13-15
15. Conclusion 16
16. Recommendation 17
17. References 18
Introduction
METRO Cash & Carry is a leading international company in self-service wholesale
and operates more than 600 outlets in 29 countries. It is 3rd largest trader in
world, 2nd largest in Europe and the Largest in Germany with a turnover of €59.9
billion in 2006. METRO is operating around 2,378 locations in 29 countries, with
employees numbering over 263,000
At the operational level, the group’s five sales divisions conduct business
independently in their respective markets. With over 100,000 employees
worldwide, the company achieved sales of € 31.7 billion in 2007. By generating
almost 50 percent of the total sales, METRO Cash & Carry is the top-selling sales
brand of the METRO Group. Assortment and service of METRO Cash & Carry’s

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unique business-to-business model are targeted only towards professional

customers such as hotels and restaurants as well as small and mid-sized retailers
or institutions. The company offers these special groups a high level of
assortment competency both in food and nonfood as well as attractive wholesale
prices. An efficient and internationally conferrable concept ensures success in
entering new markets.
Following is the structure of METRO Group:
History of METRO
The first METRO Cash & Carry store was opened in Germany in 1964, the first
store abroad in 1971. Since then, the concept has continuously proven to be
robust and apt for successful operations in all kinds of market environments.
Three different store formats, "Classic", "Junior" and "Eco" allow choosing the
best solution for a given environment. They differ in store and assortment size.
Lately, the expansion into new markets has been on Eastern Europe and Asia,
using mainly the middle sized "junior" store format.
Till now, METRO Cash & Carry has had stores in the following countries:
Metro all over the World
METRO in Pakistan
METRO Cash & Carry announced its operations in Pakistan in January 2006.
Since then, it has established itself as a potential market leader in wholesale.
Under the supervision of Managing Director Mr. Giovanni Soranzo, METRO Cash
& Carry Pakistan has opened its first store in the city of Lahore in October
2007.The Company’s country head office is also based in Lahore and currently
employs over 400 people in two offices. It has done total Investment of US$ 180
Million and plan to build & operate 10-15 Cash & Carry Stores in Pakistan. There
are about 250–300 employees per store and the head office is at Multan Road.
METRO cash and carry business lies in the Monopolistic Competition. There are
few sellers and each has its own specialization and it charge the prices according
to the product quality and characteristics. There is no entry or exit barrier in this
market. Even five more cash and carry businesses are allowed by government to
open their branches in Pakistan
SWOT Analysis

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Strengths
 METRO has the basic strength of low prices with high quality.
 Serving the customers with the wide variety of products.
 Covering all business solutions under one roof named METRO.
 Having the strong cash and carry business background.
 Best location for such kind of big store and also covering many areas.
 Efficiently using the place and excellent layout.
 Sufficient parking and safety and security measures ensure the quality in every
sector.
 Friendly and co-operative staff.
 Computerized data base system which helps both customer and METRO.
 Cafeteria in the building for the refreshment of customers.
Weaknesses
 Less awareness in Pakistan regarding cash and carry business.
 Although location for a big store is suitable but outside the city and not suit for all
customers.
 No proper transportation for customers to carry their products far away.
 Limit of 3 persons on a single membership card
 Membership or subscription fees for cards.
 Shopping from METRO is much time consuming because the traveling and in store
visiting time.
Opportunities
 Growing market of cash and carry

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 Expansion in major cities.

 Online shopping is much better option to save time
 Contracting with major hotels and restaurants.
 Proper METRO owned convene facilities.
Threats
 Up coming stores like chase up SB many others
 Poor law and order situation of Pakistan
 High inflation rate in Pakistan
 Instability of the country

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Mission Statement
“METRO is a Cash & Carry Wholesaler for businesses and professionals. METRO
provides quality products and business solutions at the lowest possible prices”.
Vision Statement
“METRO will dominate the Cash & Carry wholesale segment globally, through
our unique business formula which improves the competitiveness of our
customers all over the world.”

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Stage- I ( Input)
IFE Matrix:
Strengths Weight Rate Score
METRO has the basic strength of low prices 0.10 4 0.40
with high quality
Serving the customers with the wide variety of 0.15 3 0.45

products.
Having the strong cash and carry business 0.12 4 0.48

background.
Efficiently using the place and excellent layout. 0.15 4 0.60
Sufficient parking and safety and security 0.20 4 0.80

measures ensure the quality in every sector.
Weaknesses
Less awareness in Pakistan regarding cash 0.10 2 0.20
and carry business.
No proper transportation for customers to carry 0.05 1 0.05

their products far away.
Shopping from METRO is much time consuming 0.05 2 0.10

because the traveling and in store visiting time.
Membership or subscription fees for cards. 0.08 2 0.16
1.0 3.24
Rating Scale:
1. Major Weakness 3. Minor Strength
2. Minor Weakness 4. Major Strength
Interpretation:
Metro cash and carry has a 3.24 score and greater than 2.5 so that company is
internally strong.

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EFE
Opportunities Weight Rate Score

Growing market of cash and carry 0.15 4 0.60
Expansion in major cities. 0.20 4 0.80
Online shopping is much better option to save 0.10 3 0.30

time.
Contracting with major hotels and restaurants. 0.08 4 0.32
Proper METRO owned convene facilities. 0.05 3 0.15
Threats
New coming stores like chase up SB many 0.12 2 0.24
others.
Poor law and order situation of Pakistan 0.10 3 0.30
High inflation rate in Pakistan 0.15 2 0.30
Political Instability of the country 0.05 2 0.10
1.0 3.11
Rating Scale:
1. Very Low Response 3. High Response
2. Low Response 4. Very High Response

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Interpretation:
CPM Matrix:
Critical Success Weight Metro SB Al Fateh

Factors Cash &
Carry
Rate Score Rate Score Rate Score

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Market Share 0.20 4 0.80 4 0.80 3 0.60
Sales 0.10 3 0.30 4 0.40 4 0.40
Advertisement 0.08 2 0.16 3 0.24 3 0.24
Goodwill 0.12 4 0.48 3 0.36 3 0.36
Location 0.05 2 0.10 4 0.20 3 0.15
Technology 0.10 3 0.30 3 0.30 2 0.20
Products Rang 0.15 4 0.60 3 0.45 3 0.45
Finance 0.06 4 0.24 3 0.18 3 0.18
Boundary (Area) 0.08 4 0.32 3 0.24 2 0.16
ABC 0.06 2 0.12 3 0.18 3 0.18
1.0 3.42 3.35 2.92
Interpretation:

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Metro cash and carry has 3.42 , SB shopping mall has 3.35 and Al Fateh
super store has 2.92 so we compare that Metro cash and carry
competitively strong and has to implement aggressive strategies.
Stage - II (Matching)
Tows Matrix:
Opportunities Threats
External Factors
 Growing market of cash and  Up coming stores like
carry chase up SB many others
 Expansion in major cities.  Poor law and order
situation of Pakistan
 Online shopping is much
better option to save time  High inflation rate in
Pakistan
 Contracting with major
hotels and restaurants.  Instability of the country
 Proper METRO owned
convene facilities.
Internal Factors
Strengths SO ST
 METRO has the basic strength

of low prices with high quality. Gaining more profit through Expand stores in different malls.
expanding stores.
 Serving the customers with the
wide variety of products.
 Covering all business solutions Produce their own variety of

under one roof named METRO. Acquire business units who
products.
 Having the strong cash and carry producing goods.
business background.
 Efficiently using the place and

excellent layout.
 Sufficient parking and safety

and security measures ensure the
quality in every sector..

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Weaknesses WO WT
 Less awareness in Pakistan

regarding cash and carry Provide membership cards to all
business. their regular customer.
Create awareness by contracting
 No proper transportation for hotels and restaurants.
customers to carry their
products far away.
 Membership or subscription fees Open nearest outlets within the Providing home delivery
for cards. city. segments.

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Internal External Matrix ( IE )
I II III
M
….………………..
.
IV . V VI
.
.
.
.
.
.

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4.0 VII . VIII IX

.
3.99
.
.
.
.
.
3.00
2.99
EFE
2.00
1.99
1.00
4.00 3.99 3.00 2.99 IFE 2.00 1.99 1.00

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Interpretation:
In Internal and External matrices X axis has a Internal Factor Evaluation score which is 3.24 and on y
axis has External factor evaluation which score is 3.11. By jointing these two matrices scores the point
M is discover which tells the Quadrant I and in this quadrant the company could invest and hold but it
should invest by creating more outlets within the city.
Stage-III ( Decision)
Quantity Strategic Planning Matrix (QSPM)
Expansion New Produce/manufact
stores In different ure goods instead
of buying from
Malls within the
others.
city
Weight AS TAS AS TAS

Strength - - - - -
METRO has the basic strength of low 0.2 - - - -
prices with high quality.
Serving the customers with the wide variety 0.15 4 0.60 3 0.45
of products.

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Covering all business solutions under one 0.1 4 0.40 4 0.40

roof named METRO.
Having the strong cash and carry business 0.1 4 0.40 3 0.30
background.
Efficiently using the place and excellent 0.1 3 0.30 4 0.40

layout.
Sufficient parking and safety and security 0.1 - - - -

measures ensure the quality in every
sector..
Weaknesses
Less awareness in Pakistan regarding cash 0.05 2 0.10 3 0.15
and carry business.
No proper transportation for customers to 0.05 2 3 0.15

carry their products far away.
Membership card only for NTN holder 0.1 1 2 0.20

Membership or subscription fees for cards. 0.05 1 2 0.10
Sub Total 1.0 1.80 2.15
Expansions new Produce/manufact

Stores in different ure goods instead
Malls within the of buying from
city. others.
Weight AS TAS AS TAS

Opportunities - - - - -

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Growing market of cash and carry 0.15 4 0.60 3 0.45
.Expansion in major cities 0.12 3 0.36 4 0.48
Online shopping is much better 0.08 3 0.24 4 0.32

option to save time
Contracting with major hotels and 0.10 1 0.10 2 0.20

restaurants.
Proper METRO owned convene 0.15 3 0.45 4 0.60

facilities.
Threats
Up coming stores like chase up SB 0.10 4 0.40 4 0.40
many others
Poor law and order situation of 0.12 3 0.36 2 0.24
Pakistan
High inflation rate in Pakistan 0.08 3 0.24 1 0.08
Instability of the country 0.10 2 0.20 1 0.10
Sub Total 1.0 2.95 2.87

Total 4.75 5.02
Interpretation:
On the basis of comparing two strategies the result is better of second strategy of
producing/manufacturing their own named goods and products which should have
been taken by the Metro cash and carry because it could be increase the sales of stores
within the city. On the basis of QSPM the second strategy is the best because the
profit margin increase by producing their own goods.

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Conclusion:
In this strategic management analysis project we have calculate different matrices

which tells the internal and external conditions of industry which we have select.
Metro cash and carry a huge chain super store in all over the world. By using different
strategic tools we calculate and find out the different results according to strategic
management such as IFE, EFE,SWOT analysis and also including TOWS, SPACE
Internal External Matrices, CPM and QSPM. There are different three stages involves
in it Input stage, Matching stage and decisions stage which tells about the deep
strategic management analysis and tells which strategy should be implemented in the
company to further running the business.
By implementing all above tools we have derive some strategic planning according to
results and with the help of this two further possible way should adopted by metro
cash and carry. Metro should increase the number of stores within the city or should
start their own production plans for producing their own goods named metro.

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Recommendations:
Apparently, METRO appears a planned and controlled environment but room for
improvement is always there.

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We suggest the following recommendations to METRO which will help it to sustain its
market position and to become market leader in Pakistan
Metro should increase the number of stores nearby and within the city to increase the sale
of stores.By producing their own goods metro can increase their profit margin and it can
also remove long way of supply chain problems and by reduction this supply chain hurdles
metro should increase a lot of opportunities of gaining more profit through this strategy if
metro adopts it.
Metro has its own big chain store in all over the world and has a big market to in retail
industry. Within in the city metro should increase the number of supermarkets and it could
also acquire a manufacturing industry which already producing different goods selling in
metro cash and carry superstore.

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References:

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Strategic Management Analysis of Metro Cash & Carry

Government College University Faisalabad

Strategic Management Analysis of Metro Cash & Carry

Sr.No Description Page

1. Executive Summary of Metro cash and carry 01

2. Introduction of Metro cash and carry 03

3. Swot Analysis 4-5

6. Internal Factor Evaluation 07

7. External Factor Evaluation 08

8. Competitive Profile Matrix 09

Government College University Faisalabad

Strategic Management Analysis of Metro Cash & Carry

10. Tows Matrix 10

11. Space Matrix 11

12. Internal, External Matrix 12

13. Stage-III (Decision) 13

14. Quantitative Strategic Planning Matrix 13-15

Government College University Faisalabad

Strategic Management Analysis of Metro Cash & Carry

unique business-to-business model are targeted only towards professional

Government College University Faisalabad

Strategic Management Analysis of Metro Cash & Carry

Government College University Faisalabad

Strategic Management Analysis of Metro Cash & Carry

 Expansion in major cities.

Government College University Faisalabad

Strategic Management Analysis of Metro Cash & Carry

Government College University Faisalabad

Strategic Management Analysis of Metro Cash & Carry

Serving the customers with the wide variety of 0.15 3 0.45

Having the strong cash and carry business 0.12 4 0.48

Efficiently using the place and excellent layout. 0.15 4 0.60

Sufficient parking and safety and security 0.20 4 0.80

No proper transportation for customers to carry 0.05 1 0.05

Shopping from METRO is much time consuming 0.05 2 0.10

Membership or subscription fees for cards. 0.08 2 0.16

Government College University Faisalabad

Strategic Management Analysis of Metro Cash & Carry

Opportunities Weight Rate Score

Expansion in major cities. 0.20 4 0.80

Online shopping is much better option to save 0.10 3 0.30

Contracting with major hotels and restaurants. 0.08 4 0.32

Proper METRO owned convene facilities. 0.05 3 0.15

Poor law and order situation of Pakistan 0.10 3 0.30

High inflation rate in Pakistan 0.15 2 0.30

Political Instability of the country 0.05 2 0.10

Government College University Faisalabad

Strategic Management Analysis of Metro Cash & Carry

Critical Success Weight Metro SB Al Fateh

Government College University Faisalabad

Strategic Management Analysis of Metro Cash & Carry

Market Share 0.20 4 0.80 4 0.80 3 0.60

Sales 0.10 3 0.30 4 0.40 4 0.40

Advertisement 0.08 2 0.16 3 0.24 3 0.24

Goodwill 0.12 4 0.48 3 0.36 3 0.36

Location 0.05 2 0.10 4 0.20 3 0.15

Technology 0.10 3 0.30 3 0.30 2 0.20

Products Rang 0.15 4 0.60 3 0.45 3 0.45

Finance 0.06 4 0.24 3 0.18 3 0.18

Boundary (Area) 0.08 4 0.32 3 0.24 2 0.16

ABC 0.06 2 0.12 3 0.18 3 0.18

1.0 3.42 3.35 2.92

Government College University Faisalabad