Jean Beierlein, president and CEO of Central
Transport, has just met with Susan Weber, the current president and CEO of SAB
Distribution. Jean was promoted from COO at Central Transport to CEO. Her
predecessor had worked closely with the former CEO of SAB Distribution when SAB
transformed its operations about 10 years earlier to respond to changes in its
competitive marketplace. Now, Ms. Weber is faced with new challenges and wants
the collaboration of Jean and Central Transport to transform again.
Susan has met extensively with the old and new members
of her executive team (several old timers left the organization when Susan had
announced her planned changes) and has developed a tentative plan for modifying
the strategic direction of SAB. Susan is convinced that SAB can attract some
larger retailers in the mid- Atlantic states if it changes its business model
to add services similar to third-party logistics companies, namely,
warehousing, transportation delivery, and inventory management. However, Susan
feels that she needs a major collaborator with experience in these areas. She
also feels that it would be better if the collaborator is a company SAB has
worked with previously on a successful basis and that is willing to take on
some new challenges.
Susan has decided to approach Wegman’s Food Markets,
Inc. as a customer for these new services. Wegman’s is a very successful
company in the Northeast that is privately owned and has expanded carefully
into new market areas over the last 15 years. It offers more value services to
its customers, including an in- store bakery, a restaurant and deli, more take
– out options, and in – store cooking demonstrations. Wegman’s primary
distribution point for its stores is located in a distribution park in Rochester,
New York, near its corporate headquarters. With its store expansion into the
Washington, D.C., area and points further south into Virginia, Wegman’s is
developing a new distribution park in Northwestern Pennsylvania to lower its
cost and improve its service. With the state of the economy, Wegman’s is
feeling the pressure to be more competitive on a price basis. Susan is also
convinced that Wegman’s has to be price competitive to continue to grow in-
store sales and expand its market opportunities. She feels that Wegman’s will
listen to her proposal to offer expanded services to help it be more
competitive. Now, she wants Central to join with SAB in making Wegman’s a
proposal. Jean wants your help in developing a positive response to Susan.