Strategic Management of Australian Supermarket

This report provides a strategic analysis of the Australian supermarket industry, including macro and industry analysis, Porter's Five Forces, SWOT analysis, and competitor analysis. The report focuses on Woolworths, Coles, and Aldi and their strategies for success. The report concludes that the industry is highly competitive and the major players are Woolworths and Coles, with Aldi as a new entrant. The report recommends that companies focus on innovation and a customer-centric approach to succeed in the market.

Running head: STRATEGIC MANAGEMENT OF AUSTRALIAN SUPERMARKET
Strategic Management of Australian Supermarket
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1STRATEGIC MANAGEMENT OF AUSTRALIAN SUPERMARKET
Executive Summary
The report has helped in analysis of the different kind of competitive analysis of the entire
retail industry of Australia. The different kind of analysis has been done such as Porter’s Five
Forces Model, SWOT along with different other strategies that will help the company in
understanding in solving the issues in an effectual manner.
The Porter’s Five Forces analysis along with competitive strategy analysis has helped the
company in gaining competitive advantage in the market. Proper analysis is required to be
done wherein this helped the companies Woolworths and Coles in competing with other new
entrants such as Aldi in Australian supermarket.

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Table of Contents
Introduction................................................................................................................................3
Analysis of Macro Environment................................................................................................3
Analysis of Industry...................................................................................................................4
Life Cycle Stage of Industry..................................................................................................4
Analysis of Porter’s Five Forces................................................................................................5
Analysis of Organization............................................................................................................6
Analysis of Competitors.............................................................................................................7
SWOT analysis of Retail Industry.............................................................................................8
Analysis of Strategy...................................................................................................................8
Identification of different strategies.......................................................................................8
Conclusion................................................................................................................................10
Recommendations....................................................................................................................10
References................................................................................................................................11

3STRATEGIC MANAGEMENT OF AUSTRALIAN SUPERMARKET
Introduction
The report helps in analysis of the different kind of macro environmental analysis
along with the industry analysis of the entire retail industry in Australia. Proper description of
the life cycle of the retail sector has to be analysed in an effectual manner wherein the
Porter’s Five Forces Analysis is required to be done appropriately. Proper company and
competitor analysis is required to be done appropriately that will help in identification of
different strategies and solve the issues effectually.
The main aim and purpose of the report includes the strategic analysis of the
supermarkets that includes Coles and Woolworths and the threat from Aldi has to be analysed
in an effectual manner as well. Proper external environment analysis is required to be done in
an effectual manner wherein this will help in implementing different strategies to solve the
issues.
Analysis of Macro Environment
PESTLE analysis can be used as the macro environmental tool in order to analyse the
entire Australian retail market in an effectual manner. The requirements and demands of the
different consumers has to be fulfilled by different kind of retail stores in the Australian
market. The different kind of policies of the government helps in providing opportunities
related to growth to the retail kind of organizations in the Australian market. There are
different kind of economic factors that include unemployment along with recession will
reduce the operational growth of the company (Tantalo and Priem, 2016). The buying
behaviour and demands of the different customers are affected by the economic condition of
the country.

4STRATEGIC MANAGEMENT OF AUSTRALIAN SUPERMARKET
The different customers of the supermarket are the different kind of important factors
that affects the entire revenues and profitability (Galliers and Leidner, 2014). The different
kind of social status of the different customers affect the choices and they wish to purchase
from such supermarkets itself. The entire social status of the organization affects the choices
of the customers related to the different products and the social status of the different
customers affect the choices that is related to products and they wish to purchase from such
supermarkets as well (Pearlson, Saunders & Galletta, 2016). The entire advancement of the
technologies affects the different ways by which the different supermarkets make utilization
of the accurate methods along with operation. The different kind of innovations that have
taken place in different kind of supermarkets that include the different formation of the
different service-oriented architecture of the organisations (Frow et al., 2015).
The different kind of operations that affect the environment of the supermarkets and
this affects the sales of the company as well. The different kind of activities that is related to
recycling along with revenues of the company affects the revenues of the supermarket. It has
been seen that the organizations in Australian economy such as Woolworths and Coles face
different kind of challenges that include the wider kind of situation and there is immense
amount of competition in the market as well (Hill, Jones & Schilling, 2014). There are
different kind of issues in the market that is related to the customer service that is required to
be solved in an effective manner.
Analysis of Industry
Life Cycle Stage of Industry
The life cycle of the different products and services of the supermarket consists of the
different kind of stages that include introduction, growth, maturity and decline stage. The
entire industry of supermarket in Australian economy is in the maturity stage wherein it is

5STRATEGIC MANAGEMENT OF AUSTRALIAN SUPERMARKET
seen that the sales is high in nature and growth has been slowed down in the market and there
is immense competition in the market as well (Krajewski, Malhotra & Ritzman, 2015).
The different kind of organizations need to increase the growth as this will help them
in not to reach the decline stage and this will help the supermarkets in the economy to
perform well in an effective manner. The life cycle stage of the products or services is
essential in nature that provides proper analysis of the position of the supermarket and this
will help them in performing accordingly to increase the sales and growth and they will not
reach the decline stage as well.
Analysis of Porter’s Five Forces
Bargaining power of the suppliers is related to the power of the different kind of
suppliers of the supermarket and it is moderate in nature in the supermarket industry in
Australian economy. The concentration of the different organizations is high in the
supermarket and this includes the different some big players that have kept the power of the
different suppliers.
Bargaining power of the buyers is related to power of the different buyers wherein it
is seen that the bargaining power of the buyers is high in nature. The entire force has become
more powerful in nature in the Australian economy as there is huge increase in the number of
supermarkets in the Australian market. The consumers have different kind of options to select
from and this has helped in increasing the bargaining power of the different buyers as well in
the Australian market (Frynas & Mellahi, 2015).
Threats among the different substitutes wherein it is seen that the retail products that
are being offered and provided in Australian supermarkets is high and the products that are
utilized by the different consumers on a daily basis helps in increasing the loyalty among the

6STRATEGIC MANAGEMENT OF AUSTRALIAN SUPERMARKET
customers. This decreases the threat related to different substitutes in the supermarket
industry of Australian economy (Stead & Stead, 2015).
Rivalry among the existing firms is related to the different kind of threats from the
rivalry in the retail industry of Australia and this is making tough for the large supermarkets
in the market as well. This thereby assists in reducing the threat that is due to the rivalry and
this is affecting the share in the market. All the large firms are continuously competing with
one another for gaining the larger share in the entire market (Jarzabkowski & Kaplan, 2015).
Threats related to the different new entrants is the other issue wherein the new kind
of players in the market in the retail industry of Australian economy has been made tough for
the different kind of players in the entire market. This helps in reducing the different kind of
threats from the new firms to the existing firms in the Australian economy (Biemans, 2018).
Analysis of Organization
The different kind of organizations that is ruling the entire Australian retail industry is
Woolworths and Coles. Woolworths is one of the largest supermarket chains in the entire
Australia (Slack, 2015). There are more than 115,000 employees wherein there are more than
900 stores in all over Australia. The goal and vision of the retail store Woolworths is to
provide the customers with fresh kind of products and services in an effectual manner.
Furthermore, it was seen that Coles is the other supermarket that is operating and it has
helped them in increasing the operations in Australia. The respective organization is
operating in Australia under the parent organization named Wesfarmers. Wesfarmers is one
of the large conglomerate in the entire Australian market (Lasserre, 2017).
Both of the supermarkets in the Australian supermarket are trying to improve the
different kind of operations and this is increasing and helping them to increase the market
share in the entire market (Bromiley et al., 2015). Both the organizations are now being

7STRATEGIC MANAGEMENT OF AUSTRALIAN SUPERMARKET
challenged with the entry of the new firm named Aldi that is establishing their position in the
Australian economy. Furthermore, it is seen that there are different kind of competitors in the
market wherein Woolworths is still number one in the retail industry and they are performing
well in the economy as well.
On the other hand, Coles is the part of Wesfarmers that is the conglomerate and it is
performing well in the market with increasing the profitability in the market. However, it is
seen that Woolworths has been successful in outperforming in comparison to Coles and the
situation has changed and it is acquired by Wesfarmers (Woolworths.com.au., 2018). Lastly,
it is seen that both Woolworths and Coles are performing well in the market wherein this has
helped them in increasing their market share and they have outperformed the profit earned by
Aldi supermarket in the entire industry of Australian economy (Rothaermel, 2015).
Analysis of Competitors
The level of the entire competition is high between both the companies such as
Woolworths and Coles. The level of the competition among the different kind of
organizations has been hostile in nature and the implementation of the strategy of the
different firms that is related to different kind of policies and they are different from one
another. The strategy of Woolworths was implemented in the year 1980 and they did not
perform well in the sales as well (Coles.com.au., 2018).
The main strategy of Woolworths was to provide the individuals who are the
customers with different kind of products and services that are fresh in nature. The different
kind of organizations are constantly competing with the one another in regards to the
different kind of strategies and they will be formulating in order to increase the revenues of
the company as well (Aldi.com.au, 2018).

8STRATEGIC MANAGEMENT OF AUSTRALIAN SUPERMARKET
With the formulation of the Porter’s Five Forces Analysis, the level of the entire
competition in the entire Australian economy is high in nature and this includes the analysis
of the rivalry among the different kind of competitors in the market and the name of the
organization that is one more rivalry is Aldi and this is creating huge competition for
Woolworths and Coles Supermarkets as well.
SWOT analysis of Retail Industry
Strengths
 Population Demographics
 Penetration of low market
 Aspiring the middle-class individuals
Weaknesses
 Uncertainty in political condition
 Poor kind of infrastructure and supply chain management
Opportunities
 Innovation
 Digital kind of strategy
 Approach that is customer centric
Threats
 Human Capital
 Availability of land and real estate

9STRATEGIC MANAGEMENT OF AUSTRALIAN SUPERMARKET
Analysis of Strategy
Identification of different strategies
There are different kind of strategies that has been implemented by Woolworths
Supermarket wherein there are five most important priorities that are discussed:
Building proper and appropriate culture of the stores along with customers
Generating the sales momentum in the food and it is sustainable in nature
Evolving the business that is related to drinks of the entire organization and the main
motive of the organization is to provide the potential customers with different kind of
services and products that has to be valued by them and it is effectual in nature as well
The proper empowerment of the different kind of portfolio business of the entire
organization as this will help in providing valuing to the shareholders
Organization is aiming towards the becoming leaning retailer with the help of the
different systems with end to end process along with proper excellence
Woolworths Supermarket has been able to implement the different kind of strategies
as this will help them in operating successfully in the entire market. The respective strategy
has been properly implemented by Coles supermarket as this helped them in creating
customer base and this will help them in creating value to the customers in an effectual
manner as well. The strategy helps in assisting the company as this will build the different
kind of relationships with the different customers. However, it was seen that there are
different occasions wherein Coles have failed in implementing such strategies and this led to
loss in sales of the company as well.
The proper entry of the new kind of player in the Australian market has further
challenged different kind of strategies in such a manner that both the supermarkets Coles and
Woolworths are competing with one another in a fierce manner and this is helping them in

10STRATEGIC MANAGEMENT OF AUSTRALIAN SUPERMARKET
increasing the sales of the company as well. Aldi Supermarket has entered into the market in
the year 2001 and they are trying to expand their operations in a fast manner. The
organizations have more than 350 stores in more than 21 countries and this is helping them in
increasing the generation of revenues in the market.
Conclusion
Therefore, it can be concluded that Australian supermarket industry is competitive in
nature and the major kind of players in the market is restricting the entry of the new firms in
the market as well. The two kinds of organizations include Woolworths and Coles
Supermarket and these organizations provide huge competition to the other kind of
competitors in the market as well. The entire level of competition in the respective market has
become intense on nature and this has affected the different kind of revenues of major retail
kind of companies in the entire country Australia. Furthermore, it was seen that the
competition is huge in nature and is intense in nature and this will increase their sales and
revenues in the market as well.
Recommendations
Both Coles and Woolworths supermarkets has to formulate the different kind of
different strategies that are appropriate in nature
Both the companies have to improve the customer service quality along with different
kind of operations as well
The store style has to be maintained in both the organizations and this is in
accordance with the different kind of convenience of the customers
Woolworths needs to use the strategy that is related to preferences of the different
customers and this will help in understanding the preferences as well and this will
provide knowledge on the different kind of strategies that will help them in competing
with one another

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References
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Available at: https://www.aldi.com.au/ [Accessed 22 Apr. 2018].
Coles.com.au. (2018). Coles Supermarkets. [online] Available at: https://www.coles.com.au/
[Accessed 22 Apr. 2018].
Woolworths.com.au. (2018). Woolworths.com.au. [online] Available at:
https://www.woolworths.com.au/ [Accessed 22 Apr. 2018].
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