Impact of External Environment on Coles: Strategies to Resolve Challenges

Running Head: Business Environment
Coles
Business Environment

Business Environment 1 | P a g e
Table of Contents
Introduction......................................................................................................................................2
Effect of external environment on Coles.........................................................................................2
Government Regulations and economic conditions.....................................................................2
Consumer Behaviour....................................................................................................................2
Competitions and their strategies.................................................................................................3
Public Opinion.............................................................................................................................3
Application of appropriate frameworks to resolve challenges........................................................4
Cost Leadership............................................................................................................................4
Diversification..............................................................................................................................4
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

Business Environment 2 | P a g e
Introduction
Coles Supermarkets Australia Pty Ltd. mainly functions as Coles and it is an Australian
supermarket, consumer service and retail chain. The company is headquartered in Melbourne,
Australia. It is a subsidiary company of Wesfarmers which is engaged in several other industries
and their retail unit is functioned under the name of Coles Supermarkets. The company was
founded in 1914 and today, it stands in the top retailers of Australia. It is one of the behemoth
players of Australian retail industry and its primary competitor is Woolworths and both of them
has formed duopoly market conditions in the Australia as they both have acquired approximately
80% market share of the whole Australian retail industry. Although, market share of Woolworths
is approximately twice the market share of Coles but still, Coles is considered as the strong
player in comparison to other supermarkets such as Aldi, Sainsbury, etc. (Brunswicker &
Vanhaverbeke, 2015).
Effect of external environment on Coles
Coles’ functions in a highly competitive business environment and the major reason behind high
competition are large number of supermarkets in the industry and diversified customers’
requirements. In order to gain competitive edge over each other, every organization is heading
towards innovation, creativity and advance approaches for the objective of building appropriate
brand image in the target market. There are numerous other external factors which have direct
impact over organizational performance. These factors are government regulations, consumer
behaviour, taste and preference of consumers, competitive conditions in the market, competitors’
strategy and public opinion. Impact of these factors could be mitigated with the help of strategies
like Ansoff matrix, cost leadership pricing strategy, and with various other options which will be
adopted on the basis of issues faced by the organization (Fraj, Matute & Melero, 2015).
Government Regulations and economic conditions
Although, political conditions in Australia are stable and the country have appropriate strategies
favourable for retailers. Australian government does not impose regulations overnight, thus,
retailers could easily design their policies and strategies considering regulations of the