Answer To: HOLMES INSTITUTE FACULTY OF HIGHER EDUCATION HI6006 COMPETITIVE STRATEGY ASSIGNMENT 2 Assessment...
Anuja answered on May 25 2021
Competition in the Australian Supermarket industry
Contents
Topic Page No.
1. Executive Summary 02
2. Brief Case Summary 02
2.1 Coles
2.2 Woolworths
2.3 IGA
2.4 ALDI
3. Identification of Strategic Issues 03
3.1 Future of Wesfarmers
3.2 Rise of Aldi
3.3 The never-ending battle between Coles and Woolworths
4. Applied theoretical concepts 04
4.1 Porter’s five forces analysis
5. Recommendations based on business strategy 06
5.1 Woolworths
5.2 Coles
5.3 ALDI
5.4 IGA
6. Conclusion 07
1.Executive Summary
This case talks about the competitive environment in the Australian Supermarket business. In the course of this report, we explore different aspects of the Australian Supermarket industry, the main companies playing in the field and how the competition is sustained. Once we discussed the viewpoints and details of the case, we go on to explain in detail different strategic choices which are open to the companies for helping them sustain in the future. The companies were discussed individually, in detail and strategic decisions were taken to explain the questions which were raised at the end of the case.
2.Brief Case Summary
The Australian supermarket industry, consisting of grocery, home items and fresh produce, is an extremely competitive one. The two traditional companies which have always been in this industry are Coles and Woolworths. Apart from being amongst the top 20 retailers of the world, they are widely recognized in and around entire Australia. But they have another competitor which they had to deal with, the IGA group of stores. Apart from these three companies, the entry of ALDI, a German supermarket company, into the Australian supermarket industry, taking the already competitive market to another level of competition.
2.1 Coles- Coles is one of the brands of Wesfarmers, which is the Western Australian Cooperative. Coles has been one of the first supermarket brands to be present in Australia, and have been immensely popular since. After the acquisition of Coles by Wesfarmers, they brought in a lot of changes in the company and branding which led Coles to increase their market shares. Currently too, they hold more than 35% of the market share.
2.2 Woolworths- Woolworths is present in Australia both as a company and as a brand. But among their businesses, the grocery business is most profitable. Their current market share is around 39%, a little more than Coles.
2.3 IGA- IGA, is the Independent Grocers of Australia group, which is wholly supplied by Metcash, an ASX-listed company. All the 1400 IGA stores are independently owned and their business brings in a flavor of local spread. They have been the worst performing brand of the lot.
2.4 ALDI- entering the Australian market in 2001, ALDI made a huge swoop for customers craving low prices and good quality. They are wholly into low-cost retailing, their standard basket being 25% cheaper than the other retailers. ALDI mostly sells home brands, and spends minimum on utilities. They have created a positioning for themselves and in 18 years, have garnered a decent market share of above 10%.
Apart from this, the case mentions how the bigger supermarkets, Coles and Woolworths have made it difficult for the small-scale grocery stores to operate because of their lower operational costs and higher option availability. The case discusses the cut-throat competition which exists between Coles and Woolworths for acquiring the same customers. Starting from competitive marketing campaigns, collecting customer data and developing their supply chain, these 2 companies have always been on top of each other.
3.Identification of Strategic Issues
While Australia is a huge market with a lot of potential, the case itself mentions that the landscape is pretty complex. When we go on to discover and study each company in detail, we see that each have a unique selling point, which has made them have loyal customers for the last years. The problem created now has been because these companies are trying to go out of...