Strategic Management Analysis of Coles

This report provides a strategic management analysis of Coles, an Australian retail company. It evaluates the company's vision, mission, and value statements, as well as its strategic objectives. The report also offers recommendations for future growth and success.

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Strategic Management Analysis of Coles
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1STRATEGIC MANAGEMENT ANALYSIS OF COLES
Executive Summary
Coles Group Limited is positioned as an Australian retail company which operates its business
successfully within the global retail industry. The objective of the report was to analyze the
major components of the strategy development process for the selected company Coles through
evaluating its mission, vision along with values statements. The mission statement of the
company is focused on offering quality services to its consumers that is aligned with its
organizational principles of offering best consumer service, truly better value, high quality fresh
food, operating smarter stores, excellent availability and selling products with great personality.
In attaining this strategic objective Coles must make efforts in minimizing the costs with the
support of its superior supply chain.

2STRATEGIC MANAGEMENT ANALYSIS OF COLES
Table of Contents
1. Introduction..................................................................................................................................3
2. Organization and Industry Analysis............................................................................................3
2.1. Organizational Description of Coles....................................................................................3
2.2. Australian Retail Industry Analysis......................................................................................4
3. Evaluation of Vision, Mission and Value Statement of Coles....................................................7
3.1. Vision Statement of Coles....................................................................................................7
3.2. Mission Statement of Coles..................................................................................................7
3.3. Value Statement of Coles.....................................................................................................8
4. Evaluation of Coles Strategic Objectives....................................................................................9
5. Conclusion.................................................................................................................................11
References......................................................................................................................................12
Appendices....................................................................................................................................15

3STRATEGIC MANAGEMENT ANALYSIS OF COLES
1. Introduction
With increasing challenges to the growth along with viability of the global retail
organizations, consumer expectations are increasing. For these reasons to remain competitive,
the companies are making increasing attempts in developing unique strategic objectives focused
on attaining its set vision and vale statement (Bailey 2016). The objective of the report is to
analyze the major components of the strategy development process for the selected company
Coles through evaluating its mission, vision along with values statements. In addition, the report
will also evaluate the effectiveness of strategies objectives of the retail company that supported
the company in attaining its strategic objectives.
2. Organization and Industry Analysis
2.1. Organizational Description of Coles
Coles Group Limited is positioned as an Australian retail company which operates its
business successfully within the global retail industry. The organization is focused on selling
several retail products encompassing fresh food, household goods, groceries, fuel, liquor along
with financial services via its online platforms and store networks (Grimmer, Miles and Grimmer
2015). Coles Australia operates business through its three major divisions such as Cole’s
supermarkets, Cole’s liquor and Coles Convenience. This retail company was founded in the
year 1914 where a part of it is owned by Wesfarmers that is one of the leading supermarkets in
Australia. In the recent years, the retail company is positioned as a leading retail company with
having 749 stores, 18 million consumer transactions every week and employing more than 10000
employees in the year 2018 (Colesgroup.com.au 2019). With offering exceptional and innovative

4STRATEGIC MANAGEMENT ANALYSIS OF COLES
product and service ranges over years, Coles is characterized as a bundling service where the
suppliers are linked with the company and consumers attain great convenience from the
company.
Figure 1: Coles Circle of Organizational Success
(Source: Colesgroup.com.au 2019)
Over the years, Coles have developed several strategic initiatives in addressing the need
of its target consumers. In attaining competitive edge within Australian retail industry, Cole’s
retail stores have matched up with the retail requirements of Australia. In addition, for offering
services of promising store team members, the company was involved in retail ledgers program
that served as an innovative initiative to focus its business growth stratus on people, products,
care and financial returns.

5STRATEGIC MANAGEMENT ANALYSIS OF COLES
2.2. Australian Retail Industry Analysis
In analyzing the attractiveness of the Australian retail industry Porter’s five forces model
is employed that facilitated in evaluating the advent of the current operating environment as it is
deemed to affect the local economy (Bombaij and Dekimpe 2019).
Figure 2: Porter’s Five
Forces Analysis of Coles
(Source:
Chimhundu,
McNeill and Hamlin
2015)
 Threat of
Substitutes: This threat is high in Australian retail industry. Cole’s supermarkets have
several convenience and grocery stores along with farmer markets. The retail company is
observed to face an increased threat from indirect competitors, however, Coles
convenience stores have observed considerable growth over years as it focuses on
offering an increased choices to its consumers (Carlson, O’Cass and Ahrholdt 2015). The
shift of consumer preferences and taste towards the organic and healthy offerings which
indicates farmers markets offer an increased threat to supermarkets. Moreover, increasing

6STRATEGIC MANAGEMENT ANALYSIS OF COLES
base of time sensitive consumers is deemed to make the perceived threat off specialty
stores decreased.
 Competition: There is high competition within the Australian retail industry with more
than 140000 retail stores in the industry. High competition is because of the reason that
there exist fierce rivalry among retail stores on the basis of low perceived difference in
the generic nature of the goods and services provided by the companies (Chimhundu,
McNeill and Hamlin 2015). Woolworths and Coles are largest competitors within the
sector and such rivalry is intended to increase within the retail industry with the growth
and expansion of private retailers.
 The bargaining power of consumers: This power is low in the industry but is expected
to increase in the upcoming years. An aggressive push by the national government along
with ACCC to decrease the entry barriers within the sector set to increase consumers
bargaining power in future because of entry of several payers in the sector (Grimmer et
al. 2017). Increasing rate of price comparison websites is deemed to result in consumer
bargaining power increase that has facilitated its consumers to compare prices of
offerings among several supermarkets and convenience stores in the retail sector.
 The bargaining power of suppliers: This power is low in the Australian retail industry
as Coles control more than 75% of the market share (Lasserre 2017). For this reason the
suppliers have a limited selection of intermediaries to select from. Recent policy changes
from the Federal Government and The Australian Competition and Consumer
Commission is focused on decreasing entry barriers in the industry. For this reason,
suppler bargaining power is expected to be low as a broad intermediary ranges exist from
which the producers can select.

7STRATEGIC MANAGEMENT ANALYSIS OF COLES
 Threat of New Entrants: This threat is low in the Australian retail industry that is
estimated to remain same in future because of indigenous agreements of zoning laws
(Mehra and Coleman 2016). Such laws have caused scarcity in grocery and retail store
locations, particularly for foreign players that are seeking to enter the grocery and retail
sector of Australia. New entrants within the sector is competing with Coles in terms of
economies of scale because of which it is making increased investments in developing its
infrastructure and facilities for attaining expertise in managing business.
3. Evaluation of Vision, Mission and Value Statement of Coles
3.1. Vision Statement of Coles
The vision statement of Coles is to “offer real value to consumers through lowering the
price of the weekly shopping basket, enhancing quality through fresher produce along with
offering a simpler along with better shopping experience everyday in a week” (Mena et al.
2016). This vision statement of the company is aligned with its core retailing principle of making
sure that its consumer expectations are addressed. To sustain its competitive edge in the
changing retail business environment, the company can focus on redeveloping a vision of
expanding its stores along with network through strategic partnerships with the suppliers along
with focusing on building long term relationships with its major suppliers.
3.2. Mission Statement of Coles
The mission statement of Coles is “to give the people of Australia a shop they trust
through delivering quality, service along with value”. This mission statement is aligned with
attaining its organizational principles of achieving competitive edge mentioned in “The Coles
Way” (Mena, Ahsan and Rahman 2016). The mission statement of the company is focused on

8STRATEGIC MANAGEMENT ANALYSIS OF COLES
offering quality services to its consumers that is aligned with its organizational principles of
offering best consumer service, truly better value, high quality fresh food, operating smarter
stores, excellent availability and selling products with great personality. The company can make
improvements in its mission statement to attain competitive edge in comparison to its rivals
through focusing on offering exceptional services to consumers at a low price along with
exploring new channels to reach consumers through mobile applications (Merrett 2019).
3.3. Value Statement of Coles
The strategic values developed by Coles in attaining competitive advantages over its business
rivals in Australian retail industry are indicated below:
 Consumers come first- always
 The company believes in supporting each other to get things done
 The company takes pride in the services offered by them
 The company constantly strives to do better
The values of the company can be considered for certain improvements where strategic
values of the company can include offering fresh food through an advanced store network to
consumers along with delivering exceptional quality products and services to consumers at a low
price. Such strategic values developed by the company can facilitate it in following its strategic
principles of attaining global competitive advantages (Sutton-Brady, Kamvounias and Taylor
2015).
4. Evaluation of Coles Strategic Objectives
Strategic objectives are considered as long term organizational goals that facilitates in
converting a company’s mission statement from a broad vision into highly specific business

9STRATEGIC MANAGEMENT ANALYSIS OF COLES
growth plans (von Bonsdorff et al. 2015). There are certain strategic objectives that are
developed by Coles Supermarket in order to attain long term success of the organization and for
attaining competitive advantage in contrast to its business rivals in the retail industry like
Woolworths, Aldi along with online retail stores like Amazon and eBay. These strategic
objectives developed by Coles are indicated below:
 To deliver superior quality products to all its target consumers at a lower price that can be
easily afforded by these consumers
 To offer consumers of the Coles retail stores with better and fresh food though its best
store networks
 Another strategic objective of Coles is focused on expanding its retail stores by means of
its network of developing strategic partnerships with other suppliers along with the
network builders. Through attaining this objective Coles is also focused o formulating
long term relationships with other organizations (You and Barry 2016).
Through focusing its organizational activities developed by Coles it has successfully attained
its mission of establishing along with formulating an extensive along with positive work culture
so that the employees of the company feel belonged to the company as well as towards other
companies in the company. Through attaining these strategic objectives Coles intends to build a
work culture of decisiveness and adaptability in the company (Zarkada-Fraser and Fraser 2015).
However, Cole’s retail supermarkets are observed to deal with challenges related with
increasing competition in Australian retail industry. Focused on such issues certain
recommendations regarding modification of the company’s strategic objectives can be provided
that can facilitated the retail company in sustaining competitive edge in the long run

10STRATEGIC MANAGEMENT ANALYSIS OF COLES
(Colesgroup.com.au 2019). Following the organizational principles mentioned in “The Coles
Way”, new strategic objectives for supporting the company in attaining further growth within
Australian retail industry are indicated below:
 The new strategic objective of Coles must consider focusing its business activities on cost
leadership and differentiation strategy that can facilitate in differentiating its products
from its competitors through capitalizing on its brand image. In attaining this strategic
objective Coles must make efforts in minimizing the costs with the support of its superior
supply chain. Fulfillment of this strategic objective can make sure that Coles offer values
to its consumers at lowest price possible and thereby attaining competitive advantages
over the long run (Colesgroup.com.au 2019).
 Coles must consider developing a corporate level strategic objective to position itself as a
market leader within the retail industry of Australia. In attaining this objective the retail
company must focus on identification of services along with making investment within
services to offer exceptional value to target consumers. This objective will be aligned
with its organizational principle of offering unique services and values to its consumers
differentiated from its competitors. Attaining this strategic objective successfully can
facilitate Coles in attaining sustainable market position and can also support its growth
opportunities within Australian retail market (Grimmer, Miles and Grimmer 2015).
 Another strategic objective recommendation for Coles must be focused on developing its
functional level strategies. This strategic objective must be focused on employee
engagement. Attainment of these strategic objectives can ensure high employee
engagement so that they attain the feeling of being associated with the company so that

11STRATEGIC MANAGEMENT ANALYSIS OF COLES
they can actively take part in implementing growth strategies within the company
(Grimmer, Miles and Grimmer 2015).
5. Conclusion
From completion of the report it was revealed that there are certain strategic objectives
that are developed by Coles Supermarket in order to attain long term success of the organization
and for attaining competitive advantage in contrast to its business rivals in the retail industry.
However, Cole’s retail supermarkets are observed to deal with the challenges related with
increasing competition in Australian retail industry and considering strategic objectives for
supporting the company in attaining further growth. Coles must consider developing a corporate
level strategic objective to position itself as a market leader within the retail industry of
Australia. In attaining this objective the retail company must focus on identification of services
along with making investment within services to offer exceptional value to target consumers.

12STRATEGIC MANAGEMENT ANALYSIS OF COLES
References
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Bombaij, N.J. and Dekimpe, M.G., 2019. When do loyalty programs work? The moderating role
of design, retailer-strategy, and country characteristics. International Journal of Research in
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Carlson, J., O’Cass, A. and Ahrholdt, D., 2015. Assessing customers’ perceived value of the
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https://www.colesgroup.com.au/investors/?page=investors [Accessed 26 Jul. 2019].
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Grimmer, L., Miles, M.P., Byrom, J. and Grimmer, M., 2017. The impact of resources and
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Management, 55, pp.7-26.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.

13STRATEGIC MANAGEMENT ANALYSIS OF COLES
Mehra, S. and Coleman, J.T., 2016. Implementing capabilities-based quality management and
marketing strategies to improve business performance. International Journal of Quality &
Reliability Management, 33(8), pp.1124-1137.
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von Bonsdorff, M.E., Janhonen, M., Zhou, Z.E. and Vanhala, S., 2015. Team autonomy,
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You, K. and Barry, M., 2016. Intra-industry competition among employer associations: a case
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work, 26(2), pp.120-137.

14STRATEGIC MANAGEMENT ANALYSIS OF COLES
Zarkada-Fraser, A. and Fraser, C., 2015. Integrating social and economic orientated marketing:
A study of retail management. In Proceedings of the 2000 Academy of Marketing Science (AMS)
Annual Conference (pp. 219-223). Springer, Cham.

15STRATEGIC MANAGEMENT ANALYSIS OF COLES
Appendices
Appendix 1: Market Share of Australian Retail Companies
(Source: Bombaij and Dekimpe 2019)