Circle K. Case Study
The Circle K Corporation
The Circle K Corporation is considered to be the 30th largest retailers in the United States and is the nation's second largest operator and franchiser of convenience store. This position had guaranteed it a leading role in the mid-80s and a period of growth during that time. However, 1989 marked a downturn in the business and the company was forced to file for protection under the U.S. Bankruptcy Code. The company's leading figures were forced to take serious measures to restore the company's revenues and came up with a 3- point plan of reestablishment.
The Convenience Store Industry
Who do we buy from?
The main characteristic of the industry with regard to the competitors and main actors on the market is that the industry is highly fragmented. As of 1989, no less than 1,353 were listed as belonging to the convenience store category. The high degree of fragmentation was given not only by the large number of convenience stores, but also by the high percentages of sales accounted for by small companies: 31% of total industry sales were realized by companies with less than 50 stores.
Serious competitors were the so called g-stores, that is gas stations that also sold food, as these were generally operated by commercial giants such as Texaco or Chevron, well-capitalized companies that could afford to compete. Additionally, they posed a serious threat as were mainly axed on the products generally making most sales for convenience stores: tobacco, beer and soft drinks.
Who is buying?
Studies have shown that the typical customer for a convenience store is a white male, between 18 and 34 with high-school education and employed as a blue worker. However, the great number of companies in the business has determined executives to take measures in order to expand this target customer into a potential and future customer. Thus, women, office and white-collar workers were regarded as being appropriate, possible future customers. The executives were bound on finding new niches and possible clients.
What are they buying?
In general, the main products that customers bought were gasoline, tobacco products, prepared foods and alcoholic or non-alcoholic beverages. These accounted for a total of 80% of total sales, but, as I have pointed out in the lines above, there was an increased competition in all five- product categories form g-stores.
Industry Threats
The industry had suffered from slowing sales growth rates in the late 80s, mainly due to increase in the number of competitors and industry saturation. Additionally, the increase in gasoline sales, that generated lower gross profit margins due to high cost of technology mainly, had affected industry profitability.
Another threat came from the differentiation issue: as a 7-Eleven had put it, "the thing to overcome is the battle of sameness." Indeed, in the context of a high number of competitors and of increasing competition, a company had to find efficient means to be in some way different from the others. This could be done in the products being offered (although the range of products is mainly the same), in location (generally, throughout America) or in any other way of increasing public awareness (advertising campaigns for example).
The Circle K Corporation
Circle K Corporation was begun as Circle K. Convenience Stores in 1951 and became a subsidiary of Circle K Corporation in 1980. The Corporation runs approximately 1400 licensed or joint-venture stores in 13 foreign countries. Most of the company's stores, however are located within the Sun Belt states, from California to Florida, mainly in Florida.
The number of stores run within the company greatly expanded during the 80s, mainly due to an aggressive acquisition program, began in 1983 and following throughout the following years.
Circle K. sells over 3,800 different products and services, including fast-food items, non-food items and gasoline. Gasoline accounted for around 48.6% of the company's revenues in 1990 and is sold at 77.5% of all stores. However, as we shall see below, the product mix and an interest in high-profit margin products led to a destabilization of the company, as sales of popular merchandise decreased.
Identifying the problems
The company seemed to have led a much too aggressive plan of acquisition in the 80s, which it later could not sustain and could not face the costs involved. If we look at the period from 1983 to 1985, the company bought 1,000 stores from the UtoteM chain, 453 units from Little General Stores and 449 units from Stop & Go. These new facilities could of course bring an increase in sales, but a decrease in effective...
For this reason, it is critical to ascertain the causes of word reading difficulties in order to identify these problems and provide appropriate instruction as early as possible. (Allor, 2002, p. 47) Spear-Swerling & Sternberg note that the fundamental reason that children need to be screened for difficulties in pre-reading skills is that once the child is supposed to, by grade level be able to perform certain tasks it may
Poverty in Haiti -- Case Study CAUSES AND SOLUTIONS Poverty in Haiti Key Problem: Haiti remains among the poorest in the world despite strong interventions. a broad-spectrum approach under a proper leadership will address Haiti's multiple problems synergistically. Haiti overcame French colonial control and slavery in a series of wars in the early 19th century to become the world's first black-led Republic and the first independent Caribbean State (BBC, 2012). Its largely mountainous terrain and
HR Case Study HR CASE STUDY: UNITELExecutive SummaryThe change process has to be a carefully thought-out process since it affects all the company stakeholders from low to high hierarchy levels. This paper attempts to identify and analyze key human resource and employee relations issues in Unitel\\\'s case when the firm tried to introduce Vision 2022. This new cultural change required a transformation that was to impact all levels of the
Project Management: Case Study in Managing a Complex Shipyard Project in Singapore Background of Complex Shipyard Construction Project Company background Project Overview and Objective Work Process of Building Construction Issue Analysis in Shipyard Construction Project Management Literature Review of Project Management Issues in Scope Management Methodology of Scope Management Lessons Learned from Scope Management Issues in Cost Management Methodology of Cost Management Lessons Learned from Cost Management Issues in Human Resources Methodology of HR Management Lessons Learned from Human Resource Management Case Study in Managing a
Greiving Case Study Grief is a powerful, and somewhat self-regulating condition which we face having experiences a traumatic event. The wonders of our human body respond with pre-programmed efficiency in order to help us adjust to the reality of the new situation. In the face of a traumatic occurrence, when our emotional or mental reaction may be to shut down, or run and hide, the grieving response gives a person the
Academic Profile of Home Schooling - a Case Study Home Schooling vs. Traditional Educational Methods Home Schooling Methodology Focus of the Practicum Culture Area of Inquiry Subject/Topic Areas Home Schooling as an Alternative Curricula and Materials Used for Home Schooling The Success of Home Schooling Evaluation Design Conditions for Change Timeline Chronology Legislative Information: Maryland: A Legal Analysis State Laws and Regulations - Maryland Goulart and Travers vs. Calvert County Home-schooled Kids Find Social Growth" Home Schoolers in the Trenches" Home School Academic Advantage Increases Over Time" Home Schooling." ERIC Digest,
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now