Risk Management for Coles Supermarket: A Case Study

This case study provides an overview of Coles Supermarket's business operations, organizational structure, and key business strategies. It also discusses the potential risks that may arise while implementing the business strategy and provides a risk assessment framework and a risk register based on ISO.

Running head: Risk management.
Risk management

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Table of Contents
Introduction......................................................................................................................................3
1. Overview of the business and case objectives.............................................................................4
Background of case......................................................................................................................4
Organizational structure...............................................................................................................5
Mission and key strategies of the business..................................................................................6
Business objective.......................................................................................................................6
Current gaps in the risk principals...............................................................................................7
2. Identify the stakeholders..............................................................................................................7
Internal stakeholders....................................................................................................................7
External stakeholders...................................................................................................................7
Context of the business objectives and potential risks................................................................8
Description of internal risk environment.....................................................................................8
Description of external risk environment....................................................................................8
3. Integration risk management and development of risk framework.............................................8
Expected value and benefit of formal risk management.............................................................8
Description of the identified risk in business areas and risk categories......................................9
Potential risk assessment criteria and techniques for continual improvements...........................9
The risk assessment criteria and techniques for initiating the continual improvements are
stated as follows:..........................................................................................................................9
4. Risk register based on (ISO)......................................................................................................10
Risk impacts from the objectives of the business......................................................................10
Development of the of causes and assumptions of the risks.....................................................10
Statement of the consequences of potential impacts.................................................................10
Identification and evaluation of risk response and control........................................................10

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Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Introduction
The following assignment will develop a business case in relation to the business operations of
Cole’s supermarket. In addition to that, the organizational structure of the company will be
critically discussed along with its key business strategy. Moreover, stakeholder analysis will also
be discussed in the assignment and the potential business risks that may arise while
implementing the business strategy has also been presented in this report. Additionally, a risk
assessment framework has been discussed in the assignment, along with the categorization of the
risks. In addition to that, the risk register based on the ISO has been discussed in order to provide
a major response and control regarding the potential risk factors.
1. Overview of case and business objectives
Background of the case
The Coles Supermarkets Australia Pty Ltd trades their business by the name of Coles. In addition
to that, it is one of the major Australian supermarket chains that provide retail services to
consumers. Additionally, the company operates its entire business operation from the
headquarters in Melbourne. Furthermore, Coles Supermarket Australia Pty Ltd was founded in
the year 1914 by George Coles and currently operates more than 800 supermarkets all over
Australia. On the other hand, Coles has more than 10,000 employees working all over Australia
and manages to acquire more than 80 per cent of the market in Australia (Competition, 2016,pp.
4). Moreover, between the year of 1986 and 2006, the Coles supermarket has become one of the
brands of Coles Myer Limited. In addition to that, the company has also become one of the
subsidiaries of the Coles Group and controls the business operations with this brand name. On
the other hand, there is Newmark supermarket in Australia that has been budgeted as the
supermarket of Coles in the year 2002 to 2003.
Organizational structure
It is observed that the Coles Supermarket Australia Pty Ltd consists of a hierarchical
organizational structure as it is referred commonly as a functional structure that focuses on the
different departments so as to conduct their business operations throughout the entire nation. The
major reason due to which a hierarchical organizational structure is used is because Coles

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Supermarket is one of the largest supermarket chains which have multiple layers. Moreover, the
organizational structure for the Coles is represented as below:
Figure 1: Organizational structure of Coles Supermarket
(Source: Price, 2016)
It is observed that the entire business functions and business strategies are mainly implemented
and operated by the Chief Executive officers. In addition to that, Vice President of departments
like Finance and HR etc. are there. Finance managers operate the accounts and billing
departments. In addition to that, HR managers control and operate the functions of staff
development and recruitment of staffs. Also, there are Regional managers who operate customer
services and core operations (Price, 2016, pp.920) Furthermore, merchandising activities
includes purchase and inspection activities are carried out by Procurement Managers.
Furthermore, there are marketing and advertisement departments that operate under Public
Relation managers. On the other hand, Distribution managers work to enhance the distribution of
resources, shipping and management of the wastes.
Mission and key strategies of the business
The key strategies of Cole’s supermarket that have been adopted by the managers to increase the
profits are stated as follows:

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 Large scale advertisement and various promotional activities to extend awareness.
 Providing wide range of in-store coupons to attract customer interest and repeat
purchase.
 Improving the item display and assortment as per changes in the market opportunities.
 Delivering valuable customer experience and improve product availability.
 Free samples are offered to the customers at their first shopping (Devin & Richards,
2018, pp. 199).
The mission for the Coles supermarket chain concentrates over the grocery business chain that
mainly intends to focus on three major aspects. The aspects are stated as below:
 The first aspect concentrates on the definition of the brand and the business culture to
enhance shopping experience.
 The other aspect is improving quality through maintaining fresh produce (Coles 2019,
pp.3).
 On the other hand, the final aspect represents the business environment in which the
company operates its business activities and focuses to deliver customer offering in easier
way. Also, the aspects have described the mission and vision of Coles supermarket along
with the value statement that represents to offer a unique and enhanced experience to all
the consumers.
Business objective
The major objective of Coles supermarket chain is to provide fresh and quality products to the
consumers and earn a higher level of profit. In addition to that, as there is considerable
competitiveness that can be observed in the Australian retail market so, the Coles supermarket
may require to implement a cost-effective and enhanced business strategy so as to maintain
sustainable market hold for future along with long term profit that can be easily achieved (Pulker
et al. 2018, pp. 95).
Current gaps in the risk principals
The principals of the risks refers to the investment that expresses the exact value of the amount
which is invested. Moreover, for instance, it can be identified that there are five major risks that
represents the principals as being followed by the Coles within their business activities such as

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risk management directly addressing uncertainty, risk management based on best available
information, risk management taking human and cultural factor into consideration, risk
management as dynamic, responsive to change and risk management facilitating continual
improvement . In addition to that, the major flaws that have identified are as follows:
 The risks are not properly identified and assessed.
 On the other hand, risk analysis is not properly conducted.
 The measures are not properly taken to avert the risks.
 An additional financial support is also required to be implemented in order to avert the
risks.
 A claim management process is required to be implemented so that the potential risks
can be mitigated properly (Hopkin, 2018, pp. 98).
2. Identify the stakeholders
Internal stakeholders
The internal stakeholders for Cole’s supermarket are stated as follows:
 Company employees.
 Internal shareholders.
 Business partners and suppliers.
 The local community.
External stakeholders
The external stakeholders are stated as follows:
 Creditors of the company.
 Society.
 Regulatory authorities
 The regulatory bodies of the government.

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Context of the business objectives and potential risks
The business objectives of Coles supermarket chain is to earn a significant amount of profit from
the business operations and to gather a considerable position in the Australian market, in which it
mainly operates (Bruni & Santucci, 2016, pp.2).
Description of the internal risk environment
Fig: SWOT of Coles Supermarket
Source: (Author)
The internal risks environment mainly describes the context of the employees and management
issues. It is observed that, if the employees do not get satisfied with the services and
opportunities provided to them, they will not work with their full potential (Aven, 2016, pp, 9).
Another risk is issues from suppliers due to larger margin claimed and limited number of
suppliers in retail market from where Coles procure their items.

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Description of the external risk environment
Fig: PESTEL analysis of Coles
Source: Author
Due to the rules and restrictions of the government regulatory bodies, the business operations of
Coles can be hampered. Due to this, the supermarket will be unable to acquire the intended
profit. Low spending of consumers is another risk.
3. Integration risk management and development of risk framework
Current gaps in the risk management framework:
The current gaps that are observed in the risk management framework are stated as follows:
 Inadequate management functions.
 Low skilled professionals.

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 Lack of warehousing and distribution risk management approaches (de Oliveira, Marins,
Rocha & Salomon, 2017, pp.618).
 Risk assessment software's are unable to detect the major flaws in management
functions.
Expected value and benefit of formal risk management
The expected values and benefits of the risk management are stated as follows:
 The risk assessment program can deliver additional assistance to the managers of the
Coles supermarket to mitigate all the major risks and increase profitability.
 On the other hand, it can even help the managers to minimize all the potential risks by
taking adequate measures.
Description of the identified risk in business areas and risk categories
The risk categories in the business areas are stated as follows:
 External risks due to rise in exchange rate, limitation of finance and capital
 Risks related to the internet and cloud infrastructure
 Risks related to human resource management issues .
 The market-related issues due to rise in demand of eco-friendly supermarket
On the other hand, the risks in IT business areas that have been identified in Coles business can
be effectively improved in various location across Australia through use of prolonged approach
towards information management.
Potential risk assessment criteria and techniques for continual improvements
The risk assessment criteria and techniques for initiating the continual improvements at Coles are
stated as follows:
 Adequately skilled people are required to be hired and involved.
 The risks of group thinking behaviors are required to be enhanced.
 A major focus on the distinctive dimensions must be analyzed with utmost
comprehension so that the strategic risks can be averted.
 Underplaying strategies are also required to be successfully assumed.

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4. Risk register based on (ISO)
Risk impacts from the objectives of the business
It is observed that due to the risks, the business objectives of Coles have been hampered. On the
other hand, it minimizes the profit potential of the company and ability to respond to intense
competitive pressure appropriately to hold market size.
Development of the causes and assumptions of the risks
The risks mainly generated due to ineffective management structure.
Statement of the consequences of potential impacts
If the risks become unaddressed, the profitability of the Coles can be minimized.
Identification and evaluation of risk response and control
The risks response that can be identified by the management of the Coles includes expansion of
stores and brand building initiatives as well as strengthening in-house brands through store
network to gain steady revenues. Another risk control is establishing sound leadership and
succession to insure performance (Giannakis & Papadopoulos, 2016, pp. 460). The risk response
and control measures will enable Coles scale their economies and distribution to maintain market
dominance.
Conclusion
From the above discussion, it can be concluded that the above assignment has provided a major
overview regarding the business operations of the Coles supermarket chain in Australia, along
with its major business operations. In addition to that, the key business strategies and risk
assessment measures have also been depicted in the assignment.

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References
Aven, T. (2016). Risk assessment and risk management: Review of recent advances on their
foundation. European Journal of Operational Research, 253(1), 1-13.
Bruni, M., & Santucci, F. M. (2016). Agribusiness at global scale and smallholders. Bulgarian
Journal of Agricultural Science, 22(1), 1-9.
Coles (2019). Annual Report. Retrieved from:
https://www.colesgroup.com.au/FormBuilder/_Resource/_module/ir5sKeTxxEOndzdh00
hWJw/file/Coles_Annual_Report_2019.pdf
Competition, A. (2016). Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014]
FCA 1405. But see also Australian Competition and Consumer Commission v
Woolworths Ltd, 1-87
de Oliveira, U. R., Marins, F. A. S., Rocha, H. M., & Salomon, V. A. P. (2017). The ISO 31000
standard in supply chain risk management. Journal of Cleaner Production, 151, 616-633.
Devin, B., & Richards, C. (2018). Food waste, power, and corporate social responsibility in the
Australian food supply chain. Journal of Business Ethics, 150(1), 199-210.
Giannakis, M., & Papadopoulos, T. (2016). Supply chain sustainability: A risk management
approach. International Journal of Production Economics, 171, 455-470.
Hopkin, P. (2018). Fundamentals of risk management: understanding, evaluating and
implementing effective risk management. Kogan Page Publishers. pp. 1-407
Price, R. (2016). Controlling routine front line service workers: An Australian retail supermarket
case. Work, employment and society, 30(6), 915-931.
Pulker, C. E., Trapp, G. S., Foulkes-Taylor, F., Scott, J. A., & Pollard, C. M. (2018). The extent
and nature of supermarket own brand foods in Australia: study protocol for describing the

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contribution of selected products to the healthfulness of food environments. Nutrition
journal, 17(1), 95.