HEB’s Balance Scorecard
What is HEB?
HEB (Here Everything’s Better) is an American supermarket located in San Antonio, Texas. The company sells organic and processed food. According to Forbes, HEB is listed as one of the biggest companies in the United States (“2014 List of America’s largest,” 2014). It is regarded as a major economic driving force in Texas. Forbes ranks the outlet at number 25 among the largest retailers, earning more than $20 billion in revenue. Besides the company’s dedication to the needs of its clients, quality services have enhanced customers’ loyalty, and hence, facilitated sales and attracted new clients. Even though the company demonstrates stable performance, its competitive advantage is at risk due to rivals’ performance.
HEB’s Competitive Advantage
HEB’s competitive advantage is anchored on several strategic pillars, including building a strong relationship with local communities, offering quality service and value to consumers, sustaining long-term sales and profits, and encouraging a culture of employer-of-choice. The element of human interactions defines most successful organizations. According to Martin Otto, the Chief Merchant, the company maintains a lead against its competitors by creating the largest retail outlet aimed at improving the lives of its customers and partners (H.E.B., 2014). Through these strategies, HEB has successfully maintained a solid customer base.
Quality Service and Value to Customers
To maintain a competitive advantage, HEB has created a concept of its own brand by giving attractive offers in terms of freshness, quality, and discounted prices. For instance, the company opened the largest milk plant in San Antonio, Texas. Additionally, the development of retail space next to HEB stores is a significant boost for business used by the company over the years. The organization builds and leases retail spaces for small businesses. Those startups increase the company’s sales because of being next to the retail giant. HEB markets its tenancy operation that provides banking, cellular, and real estate services, thus attracting more customers to its outlets and diversifying its industry-related risks (Raven & Lunsford, 2015). Therefore, the initiative drives traffic to the businesses, ensuring profits and growth.
Encouraging Employer-of-Choice Culture
As indicated in its mission statement, HEB assures its partners and employees of diversity, respect, attractive pay and benefits, freedom to communicate, and acknowledgment of associate contribution. The company hires people from the local community and teaches them to be part of the organization, allowing the company to develop internally. The firm puts its employees’ needs first and offers generous employment packages to enhance motivation and maintain professionalism (Raven & Lunsford, 2015). Ensuring that employees earn a reasonable wage would guarantee workers’ retention.
Stable Long-Term Sales and Profits
HEB’s stability is derived from strategic steps taken by the company. The initiative to re-invent the grocery stores in Texas serves as a sales growth initiative established by the firm. Additionally, in its mission statement, HEB promises to maintain trust and integrity, delivering on its commitments and turning ideas into actions to guarantee sales growth. HEB always anticipates marketing its brands, creating awareness among consumers, and building loyalty that would ensure repeat purchases. Moreover, with the advent of new technology, HEB invested in an online shopping platform, which lets customers select the product, outlet, and convenient time of delivery (Raven & Lunsford, 2015). To align itself with the current trends in technology, HEB is seeking new ways to raise revenue and provide quality services to its clients.
Building Genuine Connections with the Locals
HEB is a socially responsible company, which engages with the local communities through several projects. The firm participates in charitable works dedicated to improving the living conditions of the surrounding community. Raven and Lunsford (2015) highlight that more than half a million dollars have been contributed to schools in Texas under the Excellence in Education Program. Additionally, in 2013, HEB gathered over 400,000 million dollars from Red Cross after the deadly explosion of a fertilizer plant in West Texas (Raven & Lunsford, 2015). Through these connections created by the organization, the community has come to appreciate the presence of the company. A timely action that influences the community directly is significant in making a difference in people’s lives.
The concept of competitive strategy entails doing something different from the competitors. It means selecting a new set of actions to deliver the intended value. HEB’s strategy mainly focuses on local products. Availability of those products in stores creates a commitment towards the store, enhancing competitive advantage. For instance, HEB contacted Texas farmers and producers directly, promoted Texas brands, supported local projects, and hired domestic workers (Raven & Lunsford, 2015). Therefore, the involvement of both employees and customers creates a sense of ownership.
HEB leverages its threats by undertaking progressive initiatives, such as adopting new technology, taking calculated risks, and engaging in social responsibility. HEB social work involves caring for the environment through efficient energy use and conservation of natural resources. The company ensures the continuity of its mission statement by strengthening local farmers and producers while involving them in socially responsible initiatives beneficial to the community (Raven & Lunsford, 2015). Evidently, HEB’s relationship with society goes beyond corporate social responsibility and enables the organization to leverage its activities based on its mission statement.
2014 List of America’s largest private companies. (2014). Forbes. Retrieved from https://www.forbes.com/largest-private-companies/list/#tab:rank
H.E.B. (2014). HEB development. Retrieved from http://www.hebevelopment.com/index.jsp
Raven, J., & Lunsford, R., (2015). H-E-B’s sustainable competitive advantage. Journal of Business Cases and Applications, 14, 1-14. doi:10.18411/a-2017-023.