Strategic Management and Information Systems

This article discusses the external analysis of the retail industry in Australia, including political, economic, sociocultural, technological, and environmental factors. It also covers the firm's resources, capabilities, and proposed information system solutions for business efficiency. The subject is strategic management and information systems, and the course code and college/university are not mentioned.

Running head: STRATEGIC MANAGEMENT AND INFORMATION SYSTEMS
STRATEGIC MANAGEMENT AND INFORMATION SYSTEMS
Student’s Name
University Name
Author’s Note

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Table of Contents
Part 1 (External analysis)............................................................................................................3
1. Business Background..............................................................................................................3
3. General Environment analysis...............................................................................................3
3.1 Political Factors.................................................................................................................3
3.2 Economic Factors..............................................................................................................4
3.3 Sociocultural factors.........................................................................................................4
3.4 Technological Factors.......................................................................................................4
3.5 Environmental Factors......................................................................................................4
4. The Industry Environment......................................................................................................5
4.1 Competitive Rivalry..........................................................................................................5
4.3 Suppliers’ bargaining power.............................................................................................5
4.4 Threat of substitutes........................................................................................................5
4.5 Threat of New Entrants....................................................................................................6
5. Competitive Environment......................................................................................................6
6. Opportunities and threats......................................................................................................6
6.2 Threats..............................................................................................................................7
PART 2........................................................................................................................................7
1. The firm’s resources...............................................................................................................7
1.1 Tangible resources............................................................................................................7

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1.2 Intangible resources.........................................................................................................7
2. Capabilities identification.......................................................................................................8
3. Core competency analysis......................................................................................................8
4. Proposed Information System Solutions for Business Efficiency...........................................9
5. Recommendations and Conclusion......................................................................................10
Reference List...........................................................................................................................11

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Part 1 (External analysis)
1. Business Background
The Australia retail industry tends to continue its momentum, fed by the economic
as well as the social developments. The primary factors that leads to the development of
the retail business in Australia are rapid economic growth, population rise and hike in
purchasing power. This business in Australia would spread at CAGR rate of 2 percent within
2013 to 2018. The market in this business in Australia quite flexible and unmannerly fall and
downfall are not uncommon (Weisbrod, Mulley and Hensher 2016). The overall expanse of
this business in Australia is $122 USD as per annual reports of 2015. In the last fiscal quarter,
a subtly low rate in interest have heavily boosted the retail business in Australia. The
purchasing capacity of the customers increased and the sales ratio narrowed.
2. Industry Background
The rise in disposable income drives the retail industry in Australia. Other than that
factors like consumer confidence and individual high net worth have positive impact on the
industry. The retail market was greatly boosted by the presence of foreign students in the
country but the, recent paucity of foreign students in the country have negligibly reduced
the sales proportion in the retail industry of the country (Booth and Whelan 2014).
3. General Environment analysis
3.1 Political Factors
The factors like continued political stability and continued government support
towards the retail industry helped in the significant growth of the retail companies. The
retail business have contributed to more than 20% of the GDP from the industrial sector and

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this company being a Australian multinational brand, have won continuous support from
the government.
3.2 Economic Factors
Retail sectors have showed successively stable growth in Australia since 2010 and
this is why Al-Hawari (2015), states that major retail companies like this company enjoys
enormous investments from the shareholders. The share stocks of this company have
expanded by 15.2% over the last 3 years and the pro forma analysis shows that the
employee turnover rate of this company is going to be the least till 2030. This is why the
internal expenses of the company is going to be reduced by more than 10% which will
significantly add to the revenue generation.
3.3 Sociocultural factors
Healthy lifestyle have been a trend in Australia and that is why the major social
groups including the baby boomers and the generation Y are showing a propensity to
consume packaged and branded products. This is boosting the sales of the company.
3.4 Technological Factors
Automation in the retail sales have been the biggest technological buzz in Australia.
Automated billing machines have allowed the company to save cost and time involved in
manual billing. Again, as per Bailey et al. (2015), big data accumulations have helped them
to raise the standard of competency in the industry by introducing variety in products and
service.
3.5 Environmental Factors

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The demand of eco-friendly and organic products in Australia have highly increased.
Besides that this company have innovated in the packaging technology by storing edibles in
perforated packages of 56 micron plastic.
4. The Industry Environment
4.1 Competitive Rivalry
The retail market of Australia do not involve too many market players. However,
there are big brands like Coles, Wesfarmers and this company which have enormous rivalry
among them. However the retail companies of Australia vary over their range of product s
and that is why market segmentation do not occur too frequently.
4.2 Buyers’ bargaining powers
There are large number of customer groups and that is why indifference or negative
reflection of certain number of buyers cannot have much impact upon the sales or the sales
conversion rate. There is also high diversity among the customers. There are customers
pertaining to various age groups as well as various economic bases. That is why the sales
rate generally do not vary much.
4.3 Suppliers’ bargaining power
There are a big group of suppliers. Other than domestic suppliers, the company have
suppliers from the neighbouring as well as the South Asian countries also. In fact there is
tough competition among the suppliers regarding supplying deliverables at competitive
price. This is why suppliers are never a competitive power for the company.
4.4 Threat of substitutes

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Threat of substitutes is of negligible influence since the market availability and
frequency of outlets of the company makes this company an automatic choice for the
customers. In fact, the prices of product in this company are much competitive compared to
the other brands.
4.5 Threat of New Entrants
The Australian government is in fact against excess market entry in the industry. The
wet market in Australia is free to expand, however the retail market have not experienced
the entry of potential new entrants in the last 10 years.
5. Competitive Environment
This company have showed an exceptionally high sales growth rate of 12.4% every
year. The organisation have achieved this at the dint of their inventory strength, supplier
connections and developing customer loyalty. This is why few of the frontline retail
companies of Australia have e target to segment the supply line by offering higher prices
and enticed customers with heavy discount rates.
6. Opportunities and threats
6.1 Opportunities
One of the major opportunity for the company is that they are receiving wholesale
contracts from many South Asian countries like China, Japan, and Indonesia and so on. The
company is forecasting that this hike in demand will help them to achieve 12% higher
revenue rate. Again, as per the analysis of Balaji and Roy (2017), they are opening outlets in
various European countries which would help them to emerge as major global brands in the
Oceania’s business environment. The improvement in HR practices have led to the

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availability of large number of workers which is why the company would be able to open
the 423 new stores across the country that they had proposed to open in 2016.
6.2 Threats
One of the biggest threats of the retail company is the demographic changes of
consumption trends, because of which the inventory stocks have been at stake. Particularly
the growing distaste towards precooked pack aged foods have been a cause of worry for the
company. The company have also faced issues in expansion of online selling as
establishment of deli very network in Australia is difficult.
PART 2
1. The firm’s resources
1.1 Tangible resources
Tangible resources of a company refer to those resources that could be seen and touched.
Thus, the tangible resources of the chosen company are its human resources, the machinery and
equipments amongst others. The chosen firm has varied resources that are characteristic of the
retail industry. These include the grocery products, the machineries needed for transporting these
products to the supermarkets, and the equipments needed for manufacturing the products (Kraja
and Osmani 2015). In addition, the tangible resources may include the Annual Report published by
the company each year. Apart from these, the company employs more than 22,000 employees
across Australia making its human resources as one of the strongest tangible resources across the
country. Although the company invests majority of its resources in the retail sector, it also has a
stronghold in the gas processing, coal mining and energy distribution sector.
1.2 Intangible resources

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Unlike tangible resources, the intangible resources cannot be touched or seen but are
equally vital to the company’s success. Brand recognition, goodwill, trademarks, copyrights and
intellectual property are some intangible resources of a business.
The chosen firm’s intangible resources include, apart from the above-mentioned ones, the
revenues, sales and profits, the overall financial performance. in terms of brand recognition, it is one
of the most recognized brands within Australia and across the globe as well. The company manages
to increase its brand’s awareness especially within the retail industry by accepting innovation as the
top priority strategy. In terms of revenues, the company has around AU$ 69,000 million as revenues
in the year 2017, an increase of almost AU$3,000 million from the previous year. The company’s
stock price is at 51.66 as per the latest marketing trends. The sales revenues for the third quarter of
2018 is around AU$ 3340 million and is expected to rise by the end of the financial year.
2. Capabilities identification
Capabilities of a firm might be categorized as strategic, critical and managerial capabilities
(Sandberg 2013). The following critical capabilities have been identified for the chosen firm:
 Frontline appointment and training
 Store management
 E-commerce
 Diversity and capability of the workforce
 Implementation of big data
3. Core competency analysis
The capabilities identified above indicate that the chosen company demonstrates that it has
several core competencies in the retail sector especially when it comes to online sales and marketing
(Johnston et al. 2014).

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Relevance – Frontline appointment and training is relevant to the company because it covers
the tangible resources of the company. When the hiring and training of frontline employees is given
importance, it shows the level of commitment the company has for ensuring success. Diversity of the
workforce is relevant as well because the company operates in a country where the population is
multicultural.
Difficulty of imitation – The store management capability is difficult to imitate because the
company has installed advanced technology in its website and online stores.
Extent of application – Capabilities like E-commerce show that the company has extended its
technological stronghold in the online arena as well.
4. Proposed Information System Solutions for Business Efficiency
The retail company can consider using a point of sale software to bring about efficiency in
cash management activities. The point of sale software will allow the company officials to engage in
the adequate management and maintenance of each part of the retail business right from the cash
register to the back office. The point of sale software is one that handles a number of important
functions such as electronic ordering, deliveries, promotional packages, MYOB integration,
discounting and automatic invoicing. By using a point of sale software the retail company will be in a
suitable position to keep track of the performance of the stock, money, the company staff and of
course the company’s clientele (Renko and Druzijanic 2014).
The retail company can also use SMS marketing strategies to remain connected with its
customers at all times on their mobile phones. Statistics reveal that people tend to read text
messages in their mobile devices within every four minutes of having received a text. The SMS
marketing service will enable the company to reach its customer base easily and quickly as well as to
measure and track the response generated at the retail store in real time (Watson et al. 2013). The
open and response rate is much higher for SMS marketing than it is for email marketing. The

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company can establish a notion of urgency by running the SMS promotions for briefer time-periods
and easily drive traffic to the retail store in slower times, or at the time that the promotions are
being run.
5. Recommendations and Conclusion
 The company should focus on expansion at the local or even regional level, given the
high rate of development of the Australian retail sector. By setting up stores or outlets in
prominent Australian cities and towns, the company can suitably profit from its
operations, given the high purchasing value of Australian customers today and the highly
conducive business environment for retail stores in the country.
 The company should enter into agreements with similar enterprises in the areas of its
operation and root out competition or rivalry in an effective manner. By doing so, it will
also give its loyal customer base low prices as well as a well-diversified product range to
take advantage of.

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Reference List
Al-Hawari, M.A., 2015. How the personality of retail bank customers interferes with the
relationship between service quality and loyalty. International Journal of Bank
Marketing, 33(1), pp.41-57.
Bailey, J., Price, R., Pyman, A. and Parker, J., 2015. Union power in retail: Contrasting cases
in Australia and New Zealand. New Zealand Journal of Employment Relations, 40(1), p.1.
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.
Booth, S. and Whelan, J., 2014. Hungry for change: the food banking industry in
Australia. British Food Journal, 116(9), pp.1392-1404.
Johnston, L.M., Wiedmann, M., Orta Ramirez, A., Oliver, H.F., Nightingale, K.K., Moore,‐
C.M., Stevenson, C.D. and Jaykus, L.A., 2014. Identification of core competencies for an
undergraduate food safety curriculum using a modified Delphi approach. Journal of Food
Science Education, 13(1), pp.12-21.
Kraja, Y.B. and Osmani, E., 2015. Importance of external and internal environment in
creation of competitive advantage to SMEs.(Case of SMEs, in the Northern Region of
Albania). European Scientific Journal, ESJ, 11(13).
Renko, S. and Druzijanic, M., 2014. Perceived usefulness of innovative technology in
retailing: Consumers׳ and retailers׳ point of view. Journal of retailing and consumer services,
21(5), pp.836-843
Sandberg, E., 2013. Understanding logistics-based competition in retail–a business model
approach. International Journal of Retail & Distribution Management, 41(3), pp.176-188.

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Watson, C., McCarthy, J. and Rowley, J., 2013. Consumer attitudes towards mobile
marketing in the smart phone era. International Journal of Information Management, 33(5),
pp.840-849.
Weisbrod, G., Mulley, C. and Hensher, D., 2016. Recognising the complementary
contributions of cost benefit analysis and economic impact analysis to an understanding of
the worth of public transport investment: A case study of bus rapid transit in Sydney,
Australia. Research in Transportation Economics, 59, pp.450-461.