Market Analysis Report 2022

Running head: MARKET ANALYSIS
Market Analysis
August 8
2019

MARKET ANALYSIS 1
Executive Summary
This report intends to present the deep analysis of the Coles Company which is one of
the known brands in the supermarket industry of Australia. The paper has provided a detailed
analysis of its organization structure, brand reputation, brand identity, etc. From the analysis,
it has been identified that Coles is one of the leading as well as the organization that meets its
social responsibilities by taking different initiatives and sustainable performance in the
market. This has resulted in increasing the brand reputation among the target audience of the
company. Further, the report has also discussed regarding different theories such as
stakeholder theory and corporate reputation theory which highlights that company gives
priority to its stakeholders by meeting their demands which support it in improving its
reputation in the market. In the end, the paper has also discussed the factors that impact
corporate reputation.

MARKET ANALYSIS 2
Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Overview of Coles..................................................................................................................3
PEST Analysis.......................................................................................................................4
Organization Structure...........................................................................................................5
Ownership Structure...............................................................................................................5
Shareholders Theory..............................................................................................................6
Coles Stakeholder...................................................................................................................7
Corporate Reputation Theory.................................................................................................8
Coles Behaviour and Activities..............................................................................................9
Building Blocks of Corporate Reputation........................................................................10
Interpretation of the corporate reputation............................................................................11
Factors that impact the Corporate Reputation..................................................................11
Implications and Conclusion....................................................................................................12
References................................................................................................................................14

MARKET ANALYSIS 3
Introduction
A company analysis is said to be a detailed study executed to determine the health of
a company in different areas. There are several ways for completing the analysis of the
company, based on the productivity, feasibility, and the financial health of the company
(Grant, 2016). This paper intends to present the market analysis of Coles which is one of the
well-known retail chains of Australia. The market analysis of the company is being
conducted through the PEST tool. In addition to this, the paper is also discussing different
theories such as stakeholder theory, Corporate Reputation Theory, etc. along with the detailed
internal analysis of Coles.
Overview of Coles
Coles is one of the well-known supermarket, consumer service and retail chain of
Australia with head office in Melbourne. The company was founded in the year 1914 by
George Coles. All over in Australia, Coles operates around 807 supermarkets comprising
several re-branded BI-LO Supermarkets. It also contributes to offering employment to over
100,000 employees. Along with competitor Woolworths, Company accounts for 80% of the
market of Australia (Catter, 2013). Coles is involved in contributing to saving the
environment by promoting the effective use of plastic bags. The company was first involved
in removing the lightweight plastic bags and in its place started charging for offering reusable
and thinker plastic bags. This step of the company resulted in dropping 80% of the plastic
bags use in Australia (Johnson, 2018). Further, in the year 2018, the company announced to
provide it's reusable thick plastic bags for free which resulted in stretching the business
towards criticism. However, to avoid this criticism within 24 hours the directors of the
company announced to reverse its strategy and started charging for the bags (The Guardian,
2018). This has majorly impacted the image of the company in the eyes of its customers. In

MARKET ANALYSIS 4
spite of this, the company would have first performed the detailed market research to identify
all the negative and positive impact of offering free reusable plastic bags as it would have
supported it in maintaining its market reputation among customer and other responsible
authorities of Australia.
PEST Analysis
Political – Coles and Woolworths are two of the retail giants of Australia hold the
maximum share of the retail industry of the country. The federal government of the country
has taken steps to control the operations of duopoly, by reducing the entry barriers in the
market and decreasing the level of competition to allow small players to increase their profit
margin (Keating, 2015).
Economic – In consideration of the economic downturn, the customers of Australia
have become price sensitive and also spending a very limited amount on their shopping habits
(Cole, 2019). To overcome the losses due to this, Coles offers a wide variety of products and
is putting efforts to reduce the product's prices. For reducing the product price, the company
has reduced the level of promotion as well as profit margin over every product.
Social – The social environment of Australia performs a major role in the growth of a
business. For instance, the citizens in the country prefer to make on-stop shopping under
which they purchase necessary products in large quantity once in a week such that it could
suffice for the entire week. Therefore, it is favorable for Coles to target customer who makes
a bulk purchase and accordingly charges prices.
Technology – Technology plays an important role in the sustainable development of
society and business. Coles is focused on maintaining the sustainability of its business and
meeting its corporate social responsibility. To do so, in 2018, an energy efficacy scheme was
introduced to reduce carbon emission at Coles. Constant utilization of the nitrous oxide

MARKET ANALYSIS 5
abatement technology implanted in the nitric acid pants of CSBP leads to reducing
greenhouse gas emission (Wesfarmers, 2018).
Organization Structure
Source [(The Official Board, 2019).]
Ownership Structure
Presently, Coles Group Limited is a public company listed on the stock exchange of
Australia, comprised of Coles Express, Coles Supermarket, etc. in its portfolio. From the last
10 years. Coles was one of the division or subsidiary of Wesfarmers Limited which is one of
the well-known chains of the supermarket of Australia. But, in the year 2018, the Coles
Group spun off from Wesfarmers Company. In addition to this, until 2007 when Wesfarmers
acquired the company, Coles was also formerly known as Coles Myer Limited (Coles, 2019).
CEO
CFO
COO
Legal Operations Procurement
Marketing
Human
Resource
Store
operations
General
Manager

MARKET ANALYSIS 6
Shareholders Theory
The stakeholder theory is said to be a theory of management of the organization and
ethics of the business that accounts for numerous constituencies influenced by the entities of
business such as local communities, employees, creditors, suppliers, etc. It talks about values
and morals while handling business like those who are associated with the corporate social
responsibility, social contract theory, and market economy (Stakeholder Theory, 2018). The
stakeholder view strategy is comprised of the market based as well as resource-based view
and includes a socio-political level. The general form of the stakeholder theory is focused on
determining the definite stakeholders of a business and then inspects the situations under
which directors act or behave with these stakeholders. In consideration to some of the fields
like human resource, management, and law, stakeholder theory thrived in stimulating the
typical analysis framework by signifying that the needs of the stakeholders must be placed at
the beginning of all the actions. Few of the authors like Geoffroy Murat exerted efforts to
apply the theory of stakeholder to irregular warfare (Gao, 2011).
The stakeholder theory is considered to be very important for establishing a strong
and positive brand reputation in the eyes of the customer. The main reason that represents its
importance is it gives the feeling to the stakeholder that they are important for the business
due to which it increases their trust, belief, and feel delighted towards the brand (Chapleo &
Simms, 2010). In addition to this, following stakeholder theory enable the business to
represent that it meets its corporate social responsibility. The stakeholder theory also helps
the business to give priority to the needs and expectations of the target audience and meeting
or even exceeding those needs. Coles Group follows the stakeholder theory and operates the
business to meet their needs and requirement to satisfy them.

MARKET ANALYSIS 7
Coles Stakeholder
All the divisions of the business suitably communicate with the stakeholders for the
business, by considering their needs. At the group level, Coles takes into account the interest
of all the stakeholders, defined by the potential or actual influence of the business on their
interest. The stakeholders of Coles are customers, shareholders, community, media,
government, employees, suppliers, etc. Some of the main stakeholders of the company are
described below:
Source [(Edrawsoft, 2019)]
Customers – The Coles has a communication mechanism for listening to the reviews
and feedbacks of the customer. The customers of the company can provide their feedback
through letters, telephone calls, emails, and website.
Employees – As of 2015, the company hired around 205,001 people. All over the
group, the management put efforts to promote the open culture that provide value to

MARKET ANALYSIS 8
empowerment and inspire employee’s direct feedback (Wesfarmers, 2018). The employees in
the company are allowed to provide their feedback and queries over website, surveys, email,
survey, etc.
Community – Coles believes that the strong environment of the business is reinforced
by a unified and comprehensive community environment (Wesfarmers, 2018). Accordingly,
Coles has established a long-term pledge to investing a huge amount on community welfares
related to economic and social outcomes.
Corporate Reputation Theory
Source [(Scielo, 2014)]
Corporate reputation theory is all about aligning the vision of the company, its
capabilities and expectations of the customers to each other. The vision is all about what a
business desires to be or want to achieve by increasing the corporate reputation. Here, the
vision of the business is attained by the capabilities and the skills of the business as well as
workforce through different projects, plans, and policies (Scielo, 2014). Further, the
capabilities of the business are aligned with the expectations of the customer. Business meets

MARKET ANALYSIS 9
the expectations of the targeted customer by using its strength and capabilities to design the
demanded products or services. Further, the vision of the business and expectations of the
customer are aligned with each other. The business introduces its products and services in the
market by identified needs and demand of the potential customers, which results in
establishing the vision of the business. The expectations of the customer are increased when
they identify that particular business has the vision to offer high-quality services to meet their
expectations and satisfy them. Attaining the vision of the business and meeting the
expectations of the customer by using capabilities and skills of the workforce results in
improving the corporate reputation.
Coles Behaviour and Activities
The main activities of Coles group that result in impacting or increasing its corporate
reputation in the market and among the customer are its corporate social responsibilities and
other sustainable operations that result in impacting the reviews and opinions of the
stakeholders. Some of the sustainable activities of the Coles Company are responsible for
sourcing focused towards the welfare of animals, ethical sourcing is focused towards
reducing the human resource issues, and protecting environment through different initiatives
like reducing carbon emission, sustainable use of water, reducing use of electricity, etc.
(Coles Supermarket Australia., 2019a) Besides this, company is meeting its corporate social
responsibility by offering increasing number of employment to the people and encouraging
gender balance as well as diversity within the organization. These activities of the company
support in improving the reputation of the organization in the society, people and
government.

MARKET ANALYSIS 10
Building Blocks of Corporate Reputation
Corporate Communication Model
Source [(Happ, 2012)]
Corporate Personality – Corporate Personality is the capability to enjoy the rights,
meet their duties and register the property under its name. Therefore, it is the concept of
creation and adherence of law. Coles Group follows the Companies Act 2013.
Corporate Identity – Corporate identity is the concept which talks about how a
product is known in the market. Here, the products or services of the company perform a
major role which represents the identity of the business (Fill & Roper, 2012). Coles Group is
identified as a chain of supermarkets, Coles Express, etc.
Corporate Image – The corporate image is the concept which talks about the position
of the brand in the eyes of the customer. Coles is considered as one of the capable
organization that is positioned in the eyes of the customer as a leading business.
Corporate Reputation – The corporate reputation is the concept that talks about the
opinion and reviews of the customer about a brand or product. Coles has gained a reputation
in the market as the responsible and sustainable business with the mission to offer Australian
Corporate
Personality
Corporate
Identity
Corporate
Image
Corporate
Reputation

MARKET ANALYSIS 11
store on which they can trust, deliver quality and value (Coles Supermarket Australia,
2019b).
Interpretation of the corporate reputation
Corporate reputation is the opinion of external and internal stakeholders of the
business and how the organization will be able to meet the objectives and goals depending on
the past reputation. This concept allows the consumers, investors, etc. to know and predict
how a business will perform depending on the historical performance. According to Harris
Fomburn, the detailed corporate reputation measurement that was specifically designed to
cover the opinion of the stakeholder group of the company like investors, creditors,
shareholders, customers, etc. (Shamma, 2012).
According to this concept, the corporate reputation of Coles under AMR reports the
Corporate Reputation Index in the year 2015 was 13th which dropped to 18th in the year 2016
(Australian Food News, 2016). In addition to this, the reports of 2018 Index ranking reveals
that Coles is placed at 9th rank with the 37.4 Score (Brand Index, 2018).
Factors that impact the Corporate Reputation
Resources – Resources are considered to be one of the important assets of the
businesses that enable success and competitive advantage against existing players (Noe,
Hollenbeck, Gerhart & Wright, 2017). The key resources of Coles are human resource,
technology, strategies, machinery, etc. The proper use of resources supports business in
achieving success but if they are not used properly then the business could fail. Hence, the
use of resources could impact the corporate reputation of the company positively as well as
negatively. Coles is one of the leading businesses in the Australia market with the motive to
offer best services at reasonable prices to the customer. It uses effectively its resources to

MARKET ANALYSIS 12
attain success. However, in case of its recyclable plastic bags are creating controversy in the
industry and impacting its reputation.
Social factor – The activities and initiatives are taken by the business for the
development of society impacts the corporate reputation of the business. Coles is one of the
organizations which give priority to the sustainability and its corporate social responsibilities
such that it could leave a positive impression over customer and society.
Competition – Competition is considered as the major factor that impacts the profit
margin as well as the reputation of the business. Today, every business put efforts to
represent itself better than other products available in the market (Matsa, 2011). The
competitive activities and promotional initiates of the businesses result in impacting the
reputation of another brand in the eyes of the customer. Coles is presently dealing with
increased competition from different players like Wesfarmers, Woolworths, Aldi who are
aggressively getting involved in the promotion, offering private labeled products, and
reducing the product prices. This results in impacting the corporate reputation of Coles.
Implications and Conclusion
The above report has presented a detailed analysis of Coles Company which is one of
the well-known supermarkets in Australia. The analysis of the report identified that Coles
Group is now a public organization after getting separated from Wesfarmers Limited in the
year 2018. However, it has gained a leading position in the market. Coles has established the
brand reputation in the eyes of the customer as the most sustainable and responsible
organization. However, it has been identified that the company is dealing with increased
competition from some of the Australian businesses like Wesfarmers, Aldi, and Woolworths.
To deal with the increasing competition, Coles is recommended to increase its private labeled

MARKET ANALYSIS 13
products and increase the promotion intensity of the business. In addition to this, Coles is also
recommended to eliminate offering think reusable plastic bags and in place of this, it must
offer paper bags to the customers and ask them to bring their bags for shopping.

MARKET ANALYSIS 14
References
Australian Food News. (2016). Food and retail companies ‘Reputation Index’ rankings
released. Retrieved from http://www.ausfoodnews.com.au/2016/05/11/food-and-
retail-companies-reputation-index-rankings-released.html
Brand Index. (2018). Global Ranking. Retrieved from
https://www.brandindex.com/ranking/australia/2018-index
Catter, B. (2013). FactCheck: do Coles and Woolies control 80% of the market? Retrieved
from https://theconversation.com/factcheck-do-coles-and-woolies-control-80-of-the-
market-15418
Chapleo, C., & Simms, C. (2010). Stakeholder analysis in higher education: A case study of
the University of Portsmouth. Perspectives, 14(1), 12-20.
Cole, W. (2019). Australian economy stuck in sub-par growth, but to dodge recession:
Reuters poll. Retrieved from https://www.reuters.com/article/us-australia-economy-
poll/australian-economy-stuck-in-sub-par-growth-but-to-dodge-recession-reuters-poll-
idUSKCN1UA00Z
Coles Supermarket Australia. (2019a). Sustainability. Retrieved from
https://www.coles.com.au/corporate-responsibility/sustainability
Coles Supermarket Australia. (2019b). About Coles. Retrieved from
https://www.coles.com.au/about-coles
Coles. (2019). Our History. Retrieved from https://www.coles.com.au/about-coles/centenary

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Edrawsoft. (2019). Basic Steps of Creating Stakeholder Map. Retrieved from
https://www.edrawsoft.com/mapping-stakeholder-map.php
Fill, C., & Roper, S. (2012). Corporate reputation: brand and communication 1st ed. Harlow:
Pearson.
Gao, N. (2011). What Drives Bidder Cash Reserve Effects In Acquisitions: Agency Conflicts
or Precautionary Motive?. Manchester Business School Research Paper, (625).
Grant, R. M. (2016). Contemporary strategy analysis: Text and cases 1st ed. U.K: John Wiley
& Sons.
Happ, E. (2012). Corporate Communication. Retrieved from
https://www.researchgate.net/figure/Building-blocks-of-the-corporate-reputation-
Source-Roper-Fill-2012-p-35_fig1_316170131
Johnson, S. (2018). Australia cuts plastic bag use by 80% in 3 months after supermarket ban.
Retrieved from https://bigthink.com/politics-current-affairs/australia-bans-plastic-
bags-80-percent
Keating, E. (2015). Supermarket Monsters: Seven insights into how Coles and Woolworths
came to dominate Australian groceries. Retrieved from
https://www.smartcompany.com.au/growth/supermarket-monsters-seven-insights-
into-how-coles-and-woolworths-came-to-dominate-australian-groceries/
Matsa, D. A. (2011). Competition and product quality in the supermarket industry. The
Quarterly Journal of Economics, 126(3), 1539-1591.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource
management: Gaining a competitive advantage 2nd ed. NY: McGraw-Hill Education.

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Scielo. (2014). A new approach for measuring corporate reputation. Retrieved from
http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0034-75902014000100006
Shamma, H. M. (2012). Toward a comprehensive understanding of corporate reputation:
Concept, measurement and implications. International Journal of Business and
Management, 7(16), 151.
Stakeholder Theory. (2018). About the Stakeholder Theory. Retrieved from
http://stakeholdertheory.org/about/
The Guardian. (2018). Coles reverses plastic bag policy again in 'frustrating flip-flop'.
Retrieved from https://www.theguardian.com/business/2018/aug/02/coles-reverses-
plastic-bag-policy-again-in-frustrating-flip-flop
The Official Board. (2019). Coles Group. Retrieved from
https://www.theofficialboard.com/org-chart/coles-group
Wesfarmers. (2018). Annual Report. Retrieved from
https://www.wesfarmers.com.au/docs/default-source/reports/wes18-044-2018-annual-
report.pdf?sfvrsn=4
Wesfarmers. (2018). Wesfarmers Sustainability Report Released. Retrieved from
https://www.wesfarmers.com.au/util/news-media/article/2018/09/16/2018-
wesfarmers-sustainability-report-released

MARKET ANALYSIS 17