The report analyses market size trends along with its financial and corporate

Running Head: STRATEGIC MANAGEMENT IN COLES SUPERMARKET
STRATEGIC MANAGEMENT IN COLES SUPERMARKET
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STRATEGIC MANAGEMENT IN COLES SUPERMARKET1
Executive Summary
The report analyses market size trends along with its financial and corporate performance and
focuses to critically analyse the characteristics of the general environment and the various
ways by which they affect the functioning of the Coles Supermarket. Five major forces are
discussed such as barriers to entry, power of buyers, power of suppliers, threat of substitute
products and the intensity of rivalry. A competitor analysis is done to know the future
objectives, current strategies, assumptions and capabilities of the supermarket Coles. The
sources of competitive advantage are discussed such as resources, capabilities and
competencies of the supermarket. The report analyses whether these competencies are
strategic or not by checking whether these strategies are valuable , rare, hard to imitate and
non-substitutable. The type of competitive advantage gained is discussed, whether they offer
no competitive advantages, whether temporary or sustainable advantages are gained by the
supermarket or whether competitive parity is achieved where standard or average results of
the firm are compared to others in the industry. Sustainable advantages are those which the
firm possesses which keep it ahead in competition. The report, at last, conducts a SWOT
analysis of the supermarket COLES by considering the strengths, weaknesses, opportunities
and threats of the firm. The strengths of Coles are its advantages over competitors,
weaknesses are the characteristics that put Coles at a disadvantage to others and opportunities
are elements that Coles can use to its disadvantage while threats are elements that trouble the
firm.

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Table of Contents
INTRODUCTION......................................................................................................................3
FINANCIAL AND CORPORATE PERFORMANCE.............................................................5
Financial Performance analysis..............................................................................................5
Corporate performance analysis.............................................................................................8
SWOT AND COMPETITIVE ADVANTAGE.........................................................................9
STRATEGIC OPTIONS..........................................................................................................31
STRATEGIC RECOMMENDATIONS..................................................................................32
REFERENCES.........................................................................................................................33

STRATEGIC MANAGEMENT IN COLES SUPERMARKET3
INTRODUCTION
The report analyses five different forces affecting the market Coles is explained along with
strengths, weaknesses, opportunities and threats to the company by conducting an analysis of
Porter’s Five Forces and SWOT analysis of the company .The structure ,segmentation,
distribution channels, competitors and trends of the Coles supermarket .The concept of
internal environment of a firm is explained along with the concept of core competencies .The
report also focuses to critically evaluate four criteria which determine whether resources and
capabilities can be considered core competencies or not. This report tries to identify resources
and capabilities by value chain analysis .It discusses the use of outsourcing to understand the
above topics regarding Coles supermarket by explaining the concept of outsourcing in
relation to the given market of Australia. The competitive advantage gained by the market
using core competencies is explained and are evaluated to check whether these are
strategically important or not. The report focuses to do a situational analysis by considering
the market size trends of Coles, its financial and corporate performance and by evaluating the
results by giving strategic recommendations. (Ariyawardana & Collins, 2013).

STRATEGIC MANAGEMENT IN COLES SUPERMARKET4
MARKET SIZE AND TRENDS
Coles Supermarkets is Australia’s leading grocery store headquartered in Melbourne. It was
founded in 1914 in Collingwood, Melbourne by George Coles. As far as the market size of
Coles is concerned, it has over 807 supermarkets throughout Australia having over 1, 00,
000employees. (Martin, 2015). Among the different parts of the Coles Group ,there were
approximately more than 18 million customer transactions each week which gave the
company an overall earnings of around 24 billion dollars revenue from their supermarkets.
The market expansion of Coles is scattered all over Australia. Coles is the central
marketplaces from where suppliers distribute products as well as customers are able to
purchase products directly. This facilitates convenience to the purchasers. Coles
Supermarkets was a brand of Coles Myers Limited between 1986 and 2006 before
Wesfarmers purchased the market in 2007.In 2019, the share price of Coles Supermarket has
underperformed by 11 %. (Ariyawardana & Collins 2013). On a retail calendar basis, the
overall sales revenue increased by 2.6 % and reported comparable sales growth of 3 %.
(Lawley, Birch & Craig 2016). The main reason for its decline was from Coles Express or
Eureka Operations Pvt. Ltd. The trading got lowered as transactions were impacted by fall in
fuel and unfavourable weather.
Coles used Marketing trends like Down -Down and Cheap- Cheap pricing strategies to sell its
products. These included the lowering of prices of products to achieve more sales .The
supermarket is now planning to compete with its competitors by shifting away from low
prices to focus on other attributes such as sustainability, local production and communities.

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FINANCIAL AND CORPORATE PERFORMANCE
Financial Performance analysis
Financial Performance is the extent to which financial objectives are being
accomplished by an organization .It is the process by which a firm’s policies and operations
are measured in terms of monetary objectives. It is used to measure a firm’s financial health
over a length of time. By using this parameter, performances of similar firms across the same
industry can be compared. This analysis can be done by giving Income Statement, Balance
Sheet and Cash Flow Statement of the Coles supermarket from 2018 to 2019.
The income statement of Coles supermarket shown below compares the profits earned by the
supermarket in 2018 and 2019. It can be seen that profit for the year 2018 (1578 million
dollars) is more than profit for the year 2019 (1435 million dollars), thus creating a profit
margin of 143 million dollars. This may be due to sales earnings and merchandise costs. By
increasing merchandise costs, the net profit margin is increased thereby increasing sales of
products .Taxation is an underrated variable that can affect the margin of profits.

STRATEGIC MANAGEMENT IN COLES SUPERMARKET6
Source : (Knox, 2015).
Source: (Perrone & Wodonga, 2015).
Source: (Sutton-Brady, Taylor &
Kamvounias, 2017).

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Corporate performance analysis
Corporate performance is a combined assessment of the ability of a firm to implement
its most important factors such as shareholder, market and financial performance. An analysis
of corporate performance by a company is important for its strategic management .With
regard to the supermarket Coles; corporate performance analysis can be done in two ways:
 DIAGNOSIS – This aims to provide an understanding of how the supermarket
Coles works and explains the changes that have taken place in its past
performances.
 PLANNING – This aims to determine future courses of action to be taken by
Woolworths to ascertain its implications in improving performance. (Arup, Beaton-
Wells & Paul-Taylor 2017).