Strategic Management of Coles and Woolworth in Australian Supermarket Industry

Running Head: Strategic Management
Strategic Management
Coles and Woolworth

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Strategic Management
Contents
Introduction.................................................................................................................................................2
Macro Environment Analysis.......................................................................................................................2
Industry Analysis..........................................................................................................................................3
Product Life Cycle....................................................................................................................................3
Porter’s Analysis......................................................................................................................................4
Company Analysis........................................................................................................................................5
Resource and Capabilities........................................................................................................................5
Core Competencies.................................................................................................................................6
Competitor Analysis....................................................................................................................................6
VRIO Analysis...............................................................................................................................................6
Strategy Analysis.........................................................................................................................................7
Recommendation........................................................................................................................................8
Future Prediction.........................................................................................................................................8
Conclusion...................................................................................................................................................8
References...................................................................................................................................................9

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Strategic Management
Introduction
The supermarket industry of Australia can be defined as the business that retails groceries and
food lines. This type of industry is already characterized as mature industry. Coles and
Woolworth in Australia, both are one of the leading companies that cover almost 80% of the
market as compared to the other supermarkets. Slowing of the industry growth is one of the very
common features of the mature industry. This industry has achieved the average Industry growth
per year of 3.2 percent in between the years 2007 to 2012 and the future growth is estimated to
be reducing a little to 2.9 percent till 2020 (World, 2018).
Macro Environment Analysis
The Pestle analysis of the supermarket industry is as follows:
Political Factors: The nature of this industry is duopolistic as there are multiple companies which
are into this industry like Woolworth and Coles. There is a lot of competition when there is
existence of too many companies in the same industry. Hence, the rules of the government have
very strict regulations for the duopolistic nature of the industry (Kolios, 2013).
Economical Factors: People in Australia spend fewer amounts on the supermarkets for buying
the groceries and other things and this impact the economy of the country. The Australian
government has eased the regulations on the retail industry and that makes the new entrants
come to the markets and the competition increases (Kozlinskis, 2016).
Social Factors: Coles maintains very healthy and effective relationships with the community on
the whole. It works with the NGO too for cancer people. On the other hand, Woolworth’s
relations are very bad with the suppliers.
Technological Factors: Both the companies use good technology factors for the betterment of
their own self as well as the industry. For Example: Woolworth has started using the SAP based
merchandising system for improving the efficiency while Coles have increased the number of

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Strategic Management
customers who uses internet facilities. They also give self check out facilities. Cloud infra is also
being used by Coles.
Legal Factors: Both the companies have a battle with the Australian Competition and Consumer
Commission. There is a recommendation for the strict codes by NFF (Gupta, 2013).
Environmental Factors: This industry has to use products which are sustainable as well as they
should not create any harm to the environment. The supermarkets should be eco friendly. The
carbon initiatives are incepted by Woolworth as well there are investments done for the efficient
usage of energy to that a good environment can be maintained without any pollution and dirt
(Rastogi, 2016).
Industry Analysis
Product Life Cycle
Introduction: Coles was the very first super market in Australia which was founded in Melbourne
in the year 1960. Later in the picture came Woolworth and Aldi named companies which also
made its mark in this industry. Since Cole came into existence, it has taken over the markets
since then. That is how all these companies were in the introduction phase.
Growth: Since the years 2004 till 2012, the industry was in the growing phase. Companies like
Coles, Woolworth, West farmers etc all have grown since then. The reason of their growing was
because the creation of the malls and the idea of super markets were at boom at that point of
time.
Maturity: This stage of the product life cycle displays the point from where the companies or the
industries face downfall in terms of the sales. Now since it is the case of Supermarkets and not
one company, the industry kept on growing in good terms but because of the more new entrants
like Aldi which is a German brand, Coles and Woolworth had to face serious issues. While there
was still competition going on between Coles and Woolworth as well.