Strategic Management Analysis of Coles Supermarket

This assignment is a detailed strategic management analysis of Coles supermarket, covering various aspects such as its market position, customer value proposition, and stakeholder engagement. The report highlights Coles' efforts to reduce prices, improve product quality, and engage with stakeholders effectively to maintain a competitive edge in the Australian retail market. It also emphasizes the significance of considering risk factors to avoid uncertainty in business decisions.

Running head: BUSINESS STRATEGIC PLAN
Business Strategic Plan
Name of the student
Name of the university
Author note

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Executive Summary
This report had portrayed the strategic business plan of the organization named Coles which is
one of the second largest supermarket chain in Australia. The report had included the vision,
mission and stakeholders. The report had analyzed the market of the organization to identify its
strengths and weakness along with the analysis of the competitors in the market. Relevant
strategic goals had been developed based on the market analysis. It had been concluded from the
report that effective strategic management is essential for gaining competitive advantage in the
market. The internal analysis shows that the organization is the market follower and has the
capability of being the market leader.

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Table of Contents
Introduction......................................................................................................................................3
Values of Coles................................................................................................................................3
Stakeholders in Coles......................................................................................................................5
Importance of consulting stakeholders............................................................................................6
Strategic plans..................................................................................................................................6
Market Analysis of Coles................................................................................................................7
Competitors in the market...............................................................................................................8
Key strategic goals.........................................................................................................................10
Prioritize Strategies........................................................................................................................11
Action Plan....................................................................................................................................12
Strategic Monitoring and Control..................................................................................................13
SWOT analysis for first two strategies..........................................................................................13
Strength and Weakness of Wesfarmers.........................................................................................14
Risk mitigation plan.......................................................................................................................15
Cost benefit analysis......................................................................................................................16
Legislation impact.........................................................................................................................17
Task 2.............................................................................................................................................19
Business overview.....................................................................................................................19
Analysis of vision and mission..................................................................................................19

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Stakeholder relationship review................................................................................................19
Conclusion.....................................................................................................................................20
References......................................................................................................................................21

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Introduction
This is a report which will portray the strategic business plan of the organization named
Coles which is one of the second largest supermarket chain in Australia. The report will include
the vision, mission and stakeholders. The report will analyze the market of the organization to
identify its strengths and weakness along with the analysis of the competitors in the market.
Relevant strategic goals will be developed based on the market analysis. It will also develop the
action plan; risk mitigation plan and cost benefit analysis of the strategies. Therefore, the report
will provide an overview of the organizational capabilities along with the competencies and the
position of the competitors and ally’s in the market.
Values of Coles
Coles has emphasized on providing the co summers with fresher products. The
organization has been delivering value to the consumers by reducing the overall price of the
weekly basket (Coles.com.au. 2018). Therefore, this has enabled them to increase the quality of
shopping for the consumers. The organization wants to provide value each day to the shopping
experience of the consumers. Coles value their suppliers the same way as their consumers so that
they are able to develop a long lasting relationship with their suppliers. The organization has
been able to develop passionate and caring work culture where the employees will work their
fullest to ensure that consumers get an outstanding shopping experience.

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Stakeholders in Coles
The stakeholders in Coles are as follows:
 Shareholders
 Customers
 Employees
 Suppliers
 Government
 Non government organizations
 Community
 Media
The different stakeholders are impacted differently due to a particular business decisions.
The shareholders are impacted by any business decision as there is frequent fluctuation in the
market value of the company shares. The implementation of a policy will have a direct impact on
the employees and the consumers as the employees will have to take measures for policy
implementation and the consumers will experience a difference in terms of quality of service and
products (sustainability.wesfarmers.com.au, 2018). Suppliers are affected by the changes in the
procurement policies and the policies implemented by Coles will have to be within the
government rules and regulation. This will consist of forms such as competition regulation
forms, retail trading hours, carbon regulations, liquor licensing, GST and tax reforms. Therefore,
not abiding by any of these regulations set by the government will definitely have a negative
impact on the government. Coles has been involved in social activities and formed collaboration
with various reputable NGO’s so failure of the organization in some extent will have a direct

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impact on the NGO (Wesfarmers.com.au, 2018). If the organization goes through financial crisis
it will affect the finances of the non government organizations. This shows that all the decision
making policies will affect both the internal and the external stakeholders of the organization.
Importance of consulting stakeholders
As stated by Barrett, Oborn and Orlikowski, (2016), engaging stakeholders is essential
for developing an effective strategy for the organization. There are both external and internal
stakeholders to an organization and they have a valid role to play in developing an effective
strategy. The organization should develop good communication between the organization and its
stakeholders so that the stakeholders are aware of the organization goals and the organization is
aware of the needs of the stakeholders. Therefore, the organization will be able to mitigate the
potential risk factors within the organization by communicating with the stakeholders.
Strategic plans
According to Barrett, Oborn and Orlikowski, (2016), strategies comprise of group
activities and plans that a company wants to carry out to improve the sustainability and
competitive advantage in the market.
Coles should implement strategic plans because provides a clear direction and facilitates
in developing action plan for the organization. Strategic planning will assist in prioritizing the
goals, making choices, coordinating and allocating resources to reach the desired goal. The
accountability and the timeframe of the task can be defined by using strategic plans which can be
used to increase the level of commitment and communication with the organization. Moreover, it

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will facilitate in developing an framework that will facilitate in maintaining on decision making
process.
Market Analysis of Coles
Coles is the second largest retail grocery supermarket in Australia and the market leader
Woolworths has been able to pull a huge difference between the two companies. The
organizations have always positioned their products as fresh where they have focused on
providing the consumers with fresher products every day of the week (Robertson, 2018).
However, in the past couple of years, the organization position their product based on their price
and offered the consumers with products at lower prices. However, even though these
positioning has been effective, the organization was unable to hold on to their market lead as the
other competitors matched them on the same thing.
SWOT
SWOT ANALYSIS OF COLES
Strength  Large share in the domestic market
 Strong brand awareness and marketing policy
 Attractive promotional and pricing strategies
 Effective online presence and delivery service
Weaknesses  Operates at lower margins when compared to the other major players in the
market
 The organization was involved in hard-line negotiations with the suppliers

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which has caused a negative feedback on the organization.
Opportunities  To increase their market share in the local
 To penetrate further into the global market
 To develop innovative ways to gain competitive advantage in the market
Threats  There is intense level of competition in the retail market in Australia and the
market is slowly reaching its saturation point.
 Large number of consumers have switched to the heavy discounters in the
market
 Constant change in the nature and demands of the consumers in the food and
liquor industry
(Table 1: Homewood, 2016)
Competitors in the market
The major companies in the retail industry in Australia are Woolworths, Coles, ALDI and
Metcash. Woolworths is the market leader in this segment for a long time where Coles, ALDI
and Metcash are the market followers. All these organizations offer similar products to their
consumers and have the same target segment. ALDI has gained a large amount of share in the
market in the past decade due to their discounting strategy. Metcash is following similar strategy
which has forced the industry giants like Woolworths to provide products at discounted rates.
The retail industry in Australia is growing at a rapid rate and these major players are acting as
competitors. They serve to the same consumers and each of them has the ability to make the
consumers form other companies to switch to their products.

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(Graph 1: Morgan, 2018)
Strength and Weakness of competitors
Strength and Weakness of Competitors
Woolworths
Strength  First movers into the Australian retail industry
 Strong brand awareness
 Largest consumer base
Weaknesses  Presence in the global market is minimal
 Unable to maintain their competitive advantage
 Late entry to the online retail market

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ALDI Strength  high quality products at affordable prices
 Low operating cost
 Exponential growth
Weaknesses  Relatively smaller when compared to the market leaders
 Criticized for low quality products
Metcash Strength  Delivers products to more than 3000 IGA independent stores in
Australia
 The economies of scale is large in the organization due to multi
store format and large distribution network
Weaknesses  Business model can be copied easily and presence in the global
market is limited
 Issues between the labor and management
(Table 2: Pash 2017)
Key strategic goals
The key strategic goals of the organization are as follows:
 Improving the existing business by strengthening the operations and providing
consumers with exceptional customer service. The organization will have to make sure
that they are able to sustain by keeping their current operations at top form.
 Using the value added transaction to renew the existing portfolio. The organization will
continuously improve on providing value to the consumers by using innovative methods.

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 Using long term management to improve organizational sustainability. The organization
will have to make sure that the management of human resource is efficient along with
more emphasis on diversity management. Gender equality, and employee health and
safety are also crucial areas for improving the organizational sustainability.
 Implementation of backward integration to reduce the operating margin. The organization
will have to implement backward integration so that they can reduce the cost of
production which has been used by other rival companies.
 To maintain healthy relationship with the suppliers and the labors. The organization had
problems in the past to maintain a proper relationship with the suppliers and the labors.
Prioritize Strategies
The two strategies that are a priority for the organization are implementation of backward
integration into the organization and develop health relationship with the labors and suppliers.
These strategies will have to be implemented at first as the organization will have to deal with
these problems at first as they have been faces in this for a long time. The issues with the labor
and the supplier cause disruption in the supply chain of the organization. Therefore, if the
organization has to increase their market share they will have to resolve this issue immediately.
Similarly, backward integration will increase their operational efficiency, as the company’s
operating margin is low it would be beneficial for the organization.

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Action Plan
Strategic goals Strategic Action Responsible
parties
Expected
Outcome
Timeframe
Implementatio
n of backward
integration to
reduce the
operating
margin.
Identifying
processes for
backward
integration
Operational
manager and Chief
Operational officer
Highly Positive 10days (23rd
march to 2nd April)
Estimating the cost
of the process
Financial manager
and team
Highly Positive 10days (2nd April
to 12th April)
Identify the
infrastructure and
the raw materials
required
Operation manager Highly Positive 15days (12th April
to 27th April)
Developing the
product
Operation and IT
team
Highly Positive 30days (27th April
to 27th May)
Product testing Marketing team Positive 15days (27th May
to 11th June)
Product review and
analysis
CEO, COO and
CFO
Positive 5days (11th June to
16th June)
To maintain
healthy
relationship
with the
suppliers and
Organize a meeting Board of directors
and CEO
Highly positive 7days (16th June to
23rd June)
Discuss the issues CEO Highly positive 2days (23rd June to
25th June)
Develop relevant Board and other Negative 5days (25th June to

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the labors. solutions stakeholders 28th June)
Implement relevant
solution
CEO Highly negative 3days (28th June to
31th June)
(Table 3: As created by author)
Strategic Monitoring and Control
Initially the organization will have to appoint a project manager to develop a project
management plan for these projects. Project manager will determine the time schedule and the
resource that needs to be allocated. The project status report will be used to measure and monitor
the activities so that any deviation from the desired result can be identified. Moreover, weekly
meetings will be held for discussing the progress and further instructions for the future processes.
SWOT analysis for first two strategies
SWOT ANALYSIS OF THE STRATEGIES
Strength  Backward integration will increase the operational efficiency and in turn will
increase the profit margin of the organization
 Resolving the issues with the suppliers and labors will increase the efficiency
of the logistic channel
Weaknesses  The process involves high amount of risk
 The chances of success of this strategy is less
Opportunities  Implementing backward integration will help the organization to grab on to
the market opportunities and increase their market share

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Threats  Other rival companies may implement similar strategies
(Table 4: As created by author)
Strength and Weakness of Wesfarmers
SWOT ANALYSIS OF Wesfarmers
Strength  Strong brand legacy
 Focuses on development of the community
 High quality and performance standards
 Stores in all parts of the country and effective workforce management
 Strong online marketing
 Effective marketing strategies for attracting consumers
 Provides variety of products at very price points
Weaknesses  International presence is low
 Innovation
Opportunities  Expanding into foreign markets
 Increasing the quality of the products and the business processes by
implementing innovative processes into the business model
Threats  Large competition in the domestic and the global market
 Competitors offering similar products at lower prices.

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(Table 3: Wesfarmers.com.au, 2018)
Risk mitigation plan
Risks Likelihood Impact Mitigation
action
Responsibility Timeframe
Time delay in
receiving the
raw materials
Medium Medium Maintaining
proper
relationship
with the
consumers
Project
manager
12th April to
27th April
Delay in
getting
approval for
integration
process
Medium High Developing
effective
communication
plan
Project
manager
11th June to 16th
June)
Scope creep High High Proper
monitoring and
controlling of
the processes
at all time
Project
manager
11th June to 16th
June)
Issues in
machineries
High High Regular
cleaning and
maintenance of
the machinery
Project
manager
June 2018
Identification High High Project May 2018

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of required
changes in the
later stage of
the project
manager
Unexpected
issues
Low Medium Project
manager
Any time
frame
Table 4
Cost benefit analysis
Item Details Cost Benefit Estimated
revenue
Licensing fee for
product
development
License required
for implementing
backward
integration
$3 million There will be
increase in the
profit margin by
10%
The revenue of
Coles will increase
by $60 in two
quarters
Setting up a
factory
Product
development
factory
$ 75million There will be
increase in profit
with decrease in
the operating cost
by 15%
This will increase
the revenue
generation of the
organization by $
100 million in 1
fiscal year
Negotiating with
labors and
suppliers
Developing an
effective
relationship with
the stakeholders
$1 million This will develop a
better relationship
between the
company,
This is expected to
reduce the cost of
the organization by
2% and increase

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employees and the
suppliers.
their profit margin
by 5%
Table 5
Legislation impact
The key legislation in the Australian retail industry is as follows:
 Australian Consumer law
 Competition and Consumer act 2010
 National trade measurement legislation
 Retail leasing state regulations
 Commerce legislation
 Anti Money laundering and Counter-Terrorism Financing Act 2006
 Spam Act 2003
 Greenhouse and Energy minimum standards
 State liquor legislation
The mandatory industry codes and standards are as follows:
 Mandatory Safety standards
 Food standards code
 Unit pricing code
 Franchising code of conduct
The key regulatory bodies are as follows:
 Australian consumer and competition commission (ACCC)

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 Product Safety Australia
 National Measurement institute
 Equipment Energy Efficiency initiative
 NSW Department of Trade and Investment
 NSW Fair Trading
 NT Department of Attorney-General and Justice
 ACT Office of Fair Trading (Justice and Community Safety Directorate)
 Business QLD
 NT Department of Business
 TAS Department of Economic Development, Tourism and the Arts
 QLD Office of Fair Trading
 TAS Consumer Affairs and Fair Trading
 Business Victoria
 SA Department of Consumer and Business Services
 Consumer Affairs Victoria
 WA Small Business Development Corporation.
 ACT Territory and Municipal Services
These regulatory bodies constantly monitor the organization to check for any faults in
order to protect the rights of the consumers (Business.gov.au, 2018).

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Task 2
Business overview
The retail industry is growing in a rapid rate and there is intense competition in the
market. The economy of Australia is strong and general populations have high disposable
income which has caused the retail industry to boom. Coles is one of the leading super market
chains in Australia and have a large share in the market (Coles.com.au. 2018). The organization
is focused on providing fresh foods to the consumers along grocery items. Wesfarmers is the
parent company for the organization which operates in different business sectors. Coles consists
of large number of stores in Australia and have their own private labeled generic products.
Analysis of vision and mission
Coles has emphasized on adding value to the products and the services they offer to the
consumers. In order to add value to their products and the services the organizations have
emphasized on providing fresh food to the consumers on all seven days of the week. Therefore,
the organization is trying to provide high quality products to the consumers at reasonable prices.
Therefore, they are trying to reduce the prices the consumers have been paying on their weekly
basket. This strategy is their unique selling proposition in the market but they will have to use
innovative ways as the Australian retail market is coming to a saturation point. This may include
reduction of operational cost and developing innovative products that will provide boost to their
short term sales.
Stakeholder relationship review
The organization has developed an effective stakeholder engagement program where they
always consult the stakeholders before making a decision. As the stakeholders are heavily

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affected by the organizational decision, bringing in the stakeholders have facilitated in
developing a trusting relationship between the organization and their stakeholders.
Conclusion
Thus, it can be concluded from the report that effective strategic management is essential
for gaining competitive advantage in the market. The internal analysis shows that the
organization is the market follower and has the capability of being the market leader. It is
possible if they implement the above mentioned strategies but the risk factors have to be
considered so that any uncertainty can be avoided. The analysis of the organizational vision,
mission and stakeholder relationship shows that Coles have been able to develop effective
policies essential for sustainability in the market.