Australian Supermarket Acquisitions: A Competitive Landscape Analysis

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ACQUISITIONS
AND STRUCTURE
OF AUSTRALIAN
SUPERMARKETS

TABLE OF CONTENTS
 INTRODUCTION
 ACQUISITIONS IN AUSTRALIAN
SUPERMARKETS
 POSITIVE IMPACT OF ACQUISITION
 NEGATIVE IMPACT OF ACQUISITION
 PREVENTION OF ACQUISITION FAILURE
 BUSINESS STRATEGY
 STRUCTURE OF AUSTRALIAN
SUPERMARKET
 CONCLUSION
 REFERENCES

INTRODUCTION
 Coles and Woolworths are the major
players of Australian Supermarket
Industry with about 80% market share.
 Both the companies are looking forward
to adopt the strategy of acquisition for
many reasons.
 Acquisition requires the analysis of
internal and external factors of one’s
own company.

ACQUISITIONS IN
AUSTRALIAN SUPERMARKETS
 Acquisition refers to the arrangement of
purchasing the stock or other assets of
other companies in order to acquire
control in the target companies.
 The major acquisition in Australian
supermarkets can be seen between
Coles and Woolworths.
 This acquisition would not only affect
the companies but also the whole
industry.

POSITIVE IMPACT OF
ACQUISITIONS
 It helps in the reduction of the
competition in Australian supermarket
industry as well as the costs and
overheads of the companies.
 The major reason for acquisition defines
as the expansion of business at regional,
national and international level.

CONT……..
 It further helps in enabling the
companies to offer wide variety of
products and services in a diversified
manner in the context of market and
products.
 There was a time when Coles
underperformed and Woolworths
became the greatest threat to Coles. At
such times, acquisitions help in
improving the performance and value of
the company.

NEGATIVE IMPACT OF
ACQUISITION
 Loss of differentiation by either of the
companies involved in acquisition
contract.
 Difficulty in the integration of the
cultures and operations of the
companies.
 Avoidance of self-introspection leads to
the failure of acquisition or merger
contract.

PREVENTION OF
ACQUISITION FAILURE
 Maintenance of transparency between
the management and employees.
 Identification and retention of best
talents of the companies involved.
 Implementation of effective
communication
 Self-introspection may help in
identifying own strengths and
weaknesses.

BUSINESS STRATEGY
 Another strategy can also adopt by Coles,
Woolworths and other Australian
supermarket companies named business
strategy.
 Business strategy refers to the marketing
plan for the purpose of competing
effectively, attracting customers and
achieving organizational objectives.
 Business strategy provides assistance in
the recognition of the strengths,
weaknesses and opportunities of the
company.

STRUCTURE OF
AUSTRALIAN SUPERMARKET
 It is realized that the market structure of
Australian supermarket industry is the
duopoly market structure.
 Duopoly market structure can be seen
due to the Australian retailing market
dominance by Coles and Woolworths.

CONCLUSION
 Coles and Woolworths can be the
strongest players by the utilization of
acquisition and merger strategy.
 Acquisition agreement reduces the
competition which can be seen
unhealthy for the industry.
 The acquisition strategy can be fruitful
when used with the business strategy
that can hamper the threats from
national and overseas markets.

REFERENCES
 Jallow, M. S., Masazing, M. and Basit, A., 2017.
THE EFFECTS OF MERGERS & ACQUISITIONS
ON FINANCIAL PERFORMANCE: CASE STUDY
OF UK COMPANIES. International Journal of
Accounting & Business Management. 5(1).
 Reddy, K. S., 2015. The state of case study
approach in mergers and acquisitions
literature: A bibliometric analysis. Future
Business Journal. 1(1-2). pp 13-34.
 Wells, C. B., Arup, C. J., and Paul, J. L., 2017.
Regulating Supermarkets: The Competition for
Space. The University of New South Wales law
journal. 40(3).