Title:                            Eric’s Health Food Shoppe: Facing The Challenge of Substitutes

Subject Area:          Competitive strategy

Region:                      United States

Industry:                   Organic Food and Beverage Industry

Company:                Eric’s Health Food Shoppe

Challenge:                  Eric’s Health Food Shoppe has a mission to build community through the sale of healthy products and vitamins. Owner Eric Piker wants to keep his store competitive while still maintaining this goal—but his margins are thinning as competitors such as Amazon continue to undercut his prices. As the substitutes continue to enter the market, Eric worries that if he doesn’t act now, his business may have to close in the next five to seven years. Eric’s Health Food Shoppe is facing a challenge-problem of strategy recalibration.

Investing in the Team’s Personal Capital: Elucidating the Core

The team consists of five members pursuing Bachelor degrees in Business Administration from Northeastern University. In addition to a personal connection with the business owner, the team’s unique concentrations, minors, and six month co-ops drive our team to provide the most effective recommendations possible.

• Gabriela Alfaro: Finance, Psychology minor — Commonwealth Financial Network, Wellington Management
• Prakhyat Chouta: Marketing, Media Screen Studies – Karl Lagerfeld Paris and DKNY, IFC Films
• Gillian McLarty: Marketing, Psychology minor — Wayfair, TJX Companies, HubSpot
• Christian Miller: Marketing — GE Lighting, Nokia Digital Health, MarketSmiths Content Strategists
• Nicole Piker: Finance, Journalism minor — Pathfinder International, McKinsey & Company, Boston Consulting Group

Investing in Social Capital: Methodology of Data Collection

Data was collected using three different types of sources:
1) Virtual interviews with owner Eric Piker helped us understand the core aspects of the business and showed the inside and outside of his store.
2) Company data source (ericshealthfoodshoppe.com) which allowed the team to view the store’s values, product offerings, and monthly catalogues.
3) Secondary data was based on the Brighton Beach market, industry reports on the Organic Food and Beverage Industry, and Yelp Reviews to better understand customer experience.

Investing in Professional Capital: Solving the Challenge

To solve the dilemma, the team used a variety of strategy frameworks:
1. SWOT: To understand the company and create ‘Strength-Opportunity’ matches
2. PESTEL, VRIO, and Porter’s Five Forces: To analyze market and industry forces that affect the functioning and overall strategy of the firm
3. Applied course strategies to create effective options for Eric’s Health Food Shoppe
4. Analyzed demographic information and buying pattern of locals
5. Researched and analyzed local business to create matches with aligning core competencies