Business Strategy of Australian Supermarkets

This presentation discusses the business strategy of Australian supermarkets, including key strategic issues, different strategic models and theories, and recommendations for improvement. It covers the market position of Coles, Woolsworth, and Aldi, and the formulation and implementation of strategies. The presentation also includes relevant references for further reading.

Business Strategy
of
Australian
Supermarkets

Table of contents:
• Slide 3: Introduction
• Slide 4-14: Discussion
• Slide 15: Conclusion
• Slide 16: References

Introduction
• Currently all business organizations
implement strategies to improve
business
• Strategies help to gain competitive
advantages
• Business strategies are a set of
commitments to improve structural
and financial position
• Business strategies help to manage
competition
• Influences the business performance

Discussion
• Background of Australian Supermarkets
• The number of supermarkets in Australia are increasing with the increase in
public demand
• Market is very competitive
• The most dominant supermarkets of the country: Coles and Woolworths
• Dominant supermarkets faced competition from Aldi, a German organization
(new entrant in Australia)
• Aldi provides high quality products to customers
• Aldi increases the amounts of competition
• Aldi captured a huge share in the Australian market

Identification of Key strategic
Issues
• Threats from new entrants in the
market (Aldi posed threat to Coles and
Woolsworth)
• Woolsworth faced a loss of about $1
billion
• This had put 7000 jobs at high risk
• Senior management took business
management strategies such as
proper pricing strategy to improve
market position of the country
• Woolsworth had poor marketing
strategy, which affected profitability

Identification of Different
Strategic Models and Theories
to Mitigate All the Issues
• The companies need to increase sales by reducing
price
• They can also reduce cost
• If production cost and demand is high, prices will
increase
• Acceptable pricing needs to adopted to tackle with
high competition

Five Generic Strategies of
Australian Supermarket
• Porter’s five generic models helps to identify the position of the
organization in the market
• Long-term business and financial profits caters to provide competitive
advantages to the company
• The model is based on: differentiation based and cost based
• Achievement of lower cost and high quality products than the market
competitors is signified by cost based model
• Differentiation based model, differences products as a unique or a
higher value to the commanding higher price rate

Cost Leadership Strategy
• Lower costs help the companies to gain more number of
customers
• High quality products at low prices
• The companies need to find out: low-cost suppliers, low-cost
raw materials and others
• Use of effective technology
• Value chain analysis helps the firms

Differentiation Strategy
• Important strategy for the business organizations
• More investments on R & D
• Different products than competitors to grab attention

Focused Strategy
• Set of actions to manufacture products to serve specific
competitive advantage
• Effective research of market
• Focus on small markets
• Creation of value

Integrated Strategy
• Combination of differentiation and low cost strategy
• Increase of product demand
• Woolsworth needs apply this strategy to improve brand
image

Formulation of Strategies
• Effective research of the market
• Identifying the issues to make use of the strategy that
matches the organizational requirements
• Proper application of the strategies

Implementation Process
• Proper identification of the potential market
• Strategic issues of the organization
• Implementation of the suitable business strategy that will
help increase sales

Recommendation
• More investment in research and development
• High quality products on low prices
• Application of proper business strategy

Conclusion
• Concept of various business strategies
• Potential threats in Australian market
• Market position of Coles, Woolsworth and Aldi
• Formulation and implementation of strategies
• Relevant recommendations

References
• Bailey, M., 2017. Absorptive Capacity, International Business Knowledge Transfer,
and Local Adaptation: Establishing Discount Department Stores in
Australia. Australian Economic History Review, 57(2), pp.194-216.
• Jie, F. and Gengatharen, D., 2018. Australian food retail supply chain
analysis. Business Process Management Journal.
• Grimmer, L., 2018. The diminished stakeholder: Examining the relationship
between suppliers and supermarkets in the Australian grocery industry. Journal of
Consumer Behaviour, 17(1), pp.e13-e20.
• Pulker, C.E., Trapp, G.S.A., Scott, J.A. and Pollard, C.M., 2018. What are the position
and power of supermarkets in the Australian food system, and the implications for
public health? A systematic scoping review. Obesity Reviews, 19(2), pp.198-218.