Strategic Information Systems for Coles Group: External and Internal Analysis

This report evaluates the external and internal analysis of Coles Group and proposes a suitable information system to gain a competitive advantage in the market. The report includes business background, industry analysis, opportunities and threats, firm's resources, capabilities identification, core competency analysis, and proposed system and recommendations.

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Strategic Information Systems For Business and Enterprise

Strategic Information Systems For Business and Enterprise 1
Contents
Introduction...........................................................................................................................................2
PART 1..................................................................................................................................................2
Business background.........................................................................................................................2
Industry.............................................................................................................................................2
General environmental analysis.........................................................................................................2
The industry environment..................................................................................................................3
Competitive group.............................................................................................................................4
Opportunities and threats...................................................................................................................4
PART 2..................................................................................................................................................5
Firm’s resources................................................................................................................................5
Capabilities identification..................................................................................................................5
Core competency analysis.................................................................................................................5
Suitable information system..............................................................................................................6
Proposed system and recommendations............................................................................................6
Conclusion.............................................................................................................................................6
References.............................................................................................................................................7

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Introduction
The strategic information systems are information systems and can be defined as a set of
guidelines to help companies in setting plans and strategies as per the existing norms. The
objective behind such systems is to enable entrepreneurs in assessing environmental changes
and utilize in the beneficial aspects. The strategic information systems can be categorized into
three types such as financial, operational and strategic.
This report focuses on Cole’s group. The report includes the external and internal analysis of
Cole’s group. The report further proposes a suitable information system in order to gain a
competitive advantage in the market.
PART 1
(External analysis)
Business background
Coles is an Australian supermarket, having headquartered in Melbourne. Coles makes
available fresh food, groceries, liquor, fuel and general merchandise. The company has over
106,000 team members and operates more than 2,500 retail outlets globally. The company
also sells products online through “Coles Online”. Coles aim to deliver quality, value and
service to it’s customers (Balaji & Roy, 2017).
Industry
Coles Group belongs is linked to the retail industry. The retail industry of Australia is
involved in selling goods and services to the customers by using various channels of
distribution. These channels ensure maximum profits. The efficient supply chain of retail
industry satisfies customers in Australia. The retail industry is the 2 largest employing
industries in Australia.
General environmental analysis
Economic: The economic growth of Australia is higher than in other OECD countries. There
is a low degree of risk and stable interest rates in Australia. But the recent changes in the
economy have caused uncertainty and slow growth which has caused a serious threat to the
retail industry including Coles Group.

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Physical: There are various programmes and sustainability strategies in the physical
environment of Australia which protects the business activities of Coles. These programs and
activities lead to less impact on the environment (Chong, 2014).
Sociocultural: The social trends keep on changing fast and have an impact on the demand of
Coles’s products. The health concern has caused a change in the attitude, lifestyle and
societal aspect of the people.
Global: Coles has operations all over Australia and planning to expand in the countries like
India and U.S (Courvisanos, Jain & Mardaneh, 2016). The company aims to sustain it’s
growth by expanding operations.
Technological: Initially, Coles brought merchandising systems for the refresh projects in
2004. Then, it made an acquisition of Wesfarmers in 2007. The company also unveiled a
‘pick and pack’ technology to reduce the delivery time for the online shoppers. Coles
implements changes day by day o enhance the online shopping experience of the customers.
Political/legal: The government has intervened in the daily operations of supermarkets in
Australia. It also impacts on the vital areas of the business such as skills and specialization of
the workforce (Hsu, Lin & Wang, 2015). The government also regulates the trading hours
and monitors the functions of Australian Competition and Consumer commissions and the
trade practices act.
Demographic:
Australia ranks 52 as a most populous country in the world. The population of the country is
mainly in the urban areas and is expected to exceed 28 million by the end of 2030. The
country has both religious and ethnic groups due to the presence of immigration policy
(McGillivray, 2018).
The industry environment
Supplier power: The retail industry of Australia has experienced a structural power shift in
the last 30 years. The suppliers held market power through the 1970s. The bargaining power
of suppliers is high to moderate in the retail industry of Australia.
Buyer power: The buyers exercise considerable power in the retail industry of Australia. The
switching cost between stores is low due to the availability of homogenous products. The
bargaining power of buyers is high to moderate in the Australian market.

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Potential entrants: The Australian retail industry is attractive to the new or potential entrants
due to the good investment returns. The supermarkets in Australia have experienced modest
annual growth in the recent years (Kurnia, Choudrie, Mahbubur & Alzougool, 2015). The
low entry barriers provide one more attraction to the new entrants.
Substitute products: The supermarkets offer one-stop shop to provide a broad range of fruits,
vegetables, and grocery items. The convenience store such as 7-Eleven is a substitute to the
supermarkets but it offers a limited range of items compared to the Aldi and Woolworth
supermarkets. Hence, there is the low availability of substitutes in the retail industry.
Rivalry among competitors: The supermarkets in Australia compete on the basis of price. The
customers are price conscious and wish to experience value for money. The retail industry
represents intense rivalry among the competitors.
Competitive group
The biggest competitors of the Coles are Aldi and Woolworths. Coles has adopted a strategy
of driving rented and smaller format stores to retain customer sponsorship. Additionally, the
company refreshes it’s retail locations. The company is also capable to add floors whenever
necessary in the business (Phillipov, 2016). On the other side, Woolworth has earned good
profits and the efforts made by it have caused reduced earnings of Coles. Woolworths has
established simpler logistics arrangements. The cheap-cheap policy helped Woolworths to
retain customers for a long time.
Opportunities and threats
Opportunities: Apart from the supermarket sales Coles is trying to earn profits by selling
private label goods to the customers. The company has growth opportunity in the liquor
market as Wesfarmers which is one of the parental companies, already controls 20% of the
liquor market. Coles can also enter into the insurance and finance sector as it is already
having a large database of customers. The customized insurance policies can be made
available which can be modified as per the needs of the customers (Richards, Kjaernes &
Vik, 2016). The company can scan the markets for expansion in Asia where it can tap
markets and conduct supply chain operations easily.
Threats: Coles faces threat when it comes to changing preferences of the consumers. It leads
to the wastage of the products which are out of fashion. The new brands available in the

Strategic Information Systems For Business and Enterprise 5
market also cause competition and reduce profits. The implementation of rules and
regulations related to food causes effects to the standard maintained by the company (Price,
2016).
PART 2
(Internal Analysis and proposal)
Firm’s resources
Coles is one of the leading supermarket chains of Australia. 2,500 retail stores are operated
under the Coles group with the support of 106,000 team members. The company has strong
tangible and intangible resources. Coles have well-maintained management, diversified
products, capable human resource management system, updated logistics management and
the value of providing fresh and good quality fruits, vegetables and grocery items (St. John,
Visinescu, Guynes & Prybutok, 2016). The company has a strong relationship with it’s
customers in the Australia market.
Capabilities identification
The capabilities identified of Coles are it’s brand image, supply chain management, and
human resources. The company has attained reputation for it’s slogan ‘save every day’ which
has helped to build it’s image over years. The tangible and intangible assets helped the
company to achieve significant cost savings. The positive perception of the people about the
company has helped to differentiate from other companies and in gaining competitive
advantage. The company has achieved higher growth even in the adverse conditions like
rising inflationary rates and recessions.
Core competency analysis
The core competency analysis can be made from the points such as innovation, integration,
branding and world-class supply chain. The supply chain helped the company to led
innovations and gain competitive advantage. The innovations always aim at improving
products and reduced costs. Coles uses new marketing strategies such as good quality at
simplified prices. The digital devices used by Coles improved customer satisfaction. The
company also made use of innovative design practices in the product development (Sutton-
Brady, Kamvounias & Taylor, 2015). The top-level management in the Coles implements
policies for the smooth operations of the company.

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Suitable information system
Coles should aim at using software which can handle all the activities in the single go. There
should be an information system which can minimize the internal as well as external threats.
It should aim at protecting data by making use of security techniques. The experts should be
hired to design a system which can utilize invasion detection and prevent system for the
confidentiality of data. The company can also adopt a system to control all the departments
through one device (Swoboda, Elsner & Olejnik, 2015).
Proposed system and recommendations
The proposed system solution will enable Coles to meet business requirements easily and will
be able to conduct operations effectively. It is recommended to Coles to keep safe data of
customers such as their contact numbers, account numbers, address, card details and more.
The company will be able to maintain it’s standard in a better way if such aspects are
considered.
Conclusion
The strategic information has a critical role in gaining competitive advantage. This report
evaluated the internal and external analysis of Coles. An information system is suggested to
the company in order to gain a competitive advantage. Coles is dealing effectively in the
environment of Australia. The company is able to maintain it’s position in the market by
competing successfully with Woolworths and Aldi.

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References
Balaji, M.S. and Roy, S.K., 2017. Value co-creation with Internet of things technology in the
retail industry. Journal of Marketing Management, 33(1-2), pp.7-31.
Chong, S., 2014. Business process management for SMEs: an exploratory study of
implementation factors for the Australian wine industry. Journal of Information Systems and
Small Business, 1(1-2), pp.41-58.
Courvisanos, J., Jain, A. and K. Mardaneh, K., 2016. Economic resilience of regions under
crises: A study of the Australian economy. Regional Studies, 50(4), pp.629-643.
Hsu, C., Lin, Y.T. and Wang, T., 2015. A legitimacy challenge of a cross-cultural
interorganizational information system. European Journal of Information Systems, 24(3),
pp.278-294.
Kurnia, S., Choudrie, J., Mahbubur, R.M. and Alzougool, B., 2015. E-commerce technology
adoption: A Malaysian grocery SME retail sector study. Journal of Business Research, 68(9),
pp.1906-1918.
McGillivray, F., 2018. Privileging industry: The comparative politics of trade and industrial
policy. Princeton University Press.
Phillipov, M., 2016. The new politics of food: Television and the media/food
industries. Media International Australia, 158(1), pp.90-98.
Price, R., 2016. Controlling routine front line service workers: an Australian retail
supermarket case. Work, employment and society, 30(6), pp.915-931.
Richards, C., Kjaernes, U. and Vik, J., 2016. Food security in welfare capitalism: Comparing
social entitlements to food in Australia and Norway. Journal of rural studies, 43, pp.61-70.
St. John, J., Visinescu, L.L., Guynes, C.S. and Prybutok, V.R., 2016. Information and
communication technology offshoring logistics success: A social exchange
perspective. Information Systems Management, 33(3), pp.212-230.
Sutton-Brady, C., Kamvounias, P. and Taylor, T., 2015. A model of supplier–retailer power
asymmetry in the Australian retail industry. Industrial marketing management, 51, pp.122-
130.

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Swoboda, B., Elsner, S. and Olejnik, E., 2015. How do past mode choices influence
subsequent entry? A study on the boundary conditions of preferred entry modes of retail
firms. International Business Review, 24(3), pp.506-517.