HI6006: Competitive Strategy Report - Coles vs. Woolworths Analysis

This report provides a comprehensive analysis of the competitive strategies employed within the Australian supermarket industry, with a specific focus on the rivalry between Coles, Woolworths, and the emerging presence of Aldi. The analysis begins with an executive summary highlighting the intense competition and the need for innovative strategies in the current business environment. It then delves into a detailed case study of the Australian supermarket landscape, examining the market structure, key players, and the challenges posed by Aldi's entry. The report explores the importance of business strategy in achieving growth and competitive advantage, with a particular emphasis on differentiating strategies. It examines the application of various business strategies, including differentiated marketing, production strategies, and cost leadership, to help Woolworths gain a stronger position in the market. The report concludes with recommendations for Woolworths, emphasizing the importance of adapting to the changing market dynamics and effectively countering the competition. The provided analysis offers valuable insights into strategic planning and decision-making within the dynamic retail sector.

Running Head: Competitive Strategy
Competitive Strategy

Competitive Strategy 1
Executive Summary
The environment is getting competitive day by day and the organizations have started
using innovative and differential strategies in the environment to succeed. Competition
is making the organizations to face several challenges in the business environment. The
below mentioned paper is based on the case analysis of Australian Supermarket
Industry and fight between key player Coles and Woolworths present in the industry.
Majority share of the industry is held by Coles and Woolworths and rise of Aldi in the
business environment has increased problems for the companies. It is expected that
Woolworths has better grip in the society as compared to Coles and strategies are
presented for the organization to maintain it growth. Differentiated business strategies
are defined in the paper to help the organization attain success in the tough and
competitive business environment. Further, evaluation of the paper is conducted below:

Competitive Strategy 2
Contents
Introduction....................................................................................................................................1
Summary of the Case...................................................................................................................1
Analysis of Strategic Issue..........................................................................................................2
Business Strategy.........................................................................................................................3
Use of Business Strategy in the Case...................................................................................4
Conclusion......................................................................................................................................6
Recommendation..........................................................................................................................6
References.....................................................................................................................................7

Competitive Strategy 3
Introduction
The scope of the paper is to enlighten the reader with the information about the case
analysis of Australian Supermarket rivalry between several organizations like Coles,
Woolworths etc. The paper enlighten the reader about the meaning and importance of
business strategy in the growth of a business. Business strategy refers to the long term
planning for the business to make sure that the business sustain their strategies in the
market and significantly grow as well. Strategy involves the process of planning and
inculcating actions in the business that help them to strengthen their performance.
Strategy makes sure that the organization becomes competitive in the industrial
environment. The case study of Australian supermarket involves the actions played by
different organizations and the level of competition in the market (Hardaker 2018). The
report performs analysis of the summary of case, analysis of issue in the case and
implementation of business strategy for the success of the organizations.
Summary of the Case
“Australian Supermarkets: Who will when and when” case study analysis the prevailing
trends in the supermarket of Australia and level of competition present in the industry.
The case study elaborated that there is presence of oligopoly market structure in the
retail segment of Australia. Coles and Woolworths are two main organizations who
owns major share of the industry. Both the organizations are extremely famous in the
worldwide environment and covers 80% of the market sales. The dominance of both the
organizations makes it difficult for other competitors like IGA to maintain their position in
the market (Cavagnino 2019).
Coles is a part of Wesfarmers group and Woolworths is a conglomerate that serves 527
liquor stores, 600 co-branded petroleum and 327 licensed outlets along with Big W
stores in Australian environment. IGA is a Metcash brand that has also partly
challenged functions of both the organizations. Nevertheless, the company lost its
competence in the industry because of occurrence of low cost discounted stores in the
environment. After the emergence of low discounted stores in the market, the

Competitive Strategy 4
companies Coles and Woolworths also faced competition with the company Aldo. Aldi is
a discounted store that provides goods to the people at extremely low rates (Cândido,
and Santos 2015).
This company started affecting the sales the company. Competition is the real predator
for companies in the international market; they can even make a strong working
organization weak in the industry. The company Aldi started attracting customers in
Australian market by providing them products at rates that are lower that Coles and
Woolworth’s products as well. The company also tapped the corporate social
responsibility segment by promising the customers to emit less carbon through their
activities in the environment. Resulting in which, with the help of such activities, the
company started attracting customers constantly in the market of Australia (Beaton-
Wells, and Paul-Taylor 2017).
Analysis of Strategic Issue
Through the critical analysis, it can be clearly understood that competition is the biggest
hurdle faced by the companies present in the industry. The industry already works in the
prospects of oligopoly market structure between Coles and Woolworths, further, the
emergence of Aldi affected the overall market condition of supermarket industry in
Australia. Firstly, it should be noted that both the company Coles and Woolworths are in
tough competition with each and aims to increase their market share by introducing new
features and services in the business. It should also be noted that both the
organizations have almost similar functions in the Australian market in terms of
promotion and marketing, financing, production, operations etc. (Wheelen, et. al., 2017).
Resulting in which, it confuses the customers to choose the right brand in the
environment. When one organization changes the business function, then other
organization copies or initiate similar actions so as to attract the customers in the
market. Like, when Woolworths introduced fresh food segment in the market so as to
become more competitive, then Coles also implemented similar functions in no time.
This aspect made both the organization to move forward while attaining profitability
(Raghunath, and Rose 2016).

Competitive Strategy 5
While also this was going on in the supermarket industry, Aldi emerged in the market by
increasing the struggles of the organization. The company came up with the new
organizational structure of low cost discounted store that ruined the planning and
actions of both Coles and Woolworths. As the company started offering products at
lower rates in the market resulting in which, Coles and Woolworths also started
reducing the prices to offer products at competitive rates in the market. Due to which,
the profitability of the company started to reduce along with the quality of production as
well. Thus, it can be said that competition made the organization to reduce their level of
profitability as well. Many customers also started getting dissatisfied in the market with
this type of activities of the company because they believed that low cost means low
quality and the companies are aiming to satisfy the lower level customers in the market
only (Hitt, et. al., 2017).
Business Strategy
A business strategy refers to the strategy that the organization uses to attract
customers, initiate sales, increase profitability and brand image all together. This
strategy main helps the organization to eliminate the issues and rise above competition
in the market. This strategy helps the business to strengthen their performance and
become competitive as well. This type of strategy is identified and applied by the top
level management of the company while considering the interest of all stakeholders in
the market (Prajogo 2016). This type of strategy is one solution for all the problems of
the business. A business strategy can also be referred as the master plan to resolve all
the problems of the business and carry on regular course of actions smoothly. The
business strategy’s main motive is to satisfy the customers in the market by providing
significant end results to them. Business strategy is intent of corporate actions that are
carefully planned by the top level management of the organization with an aim to
implement several purposes (Saeidi, et. al., 2015). Below mentioned are purposes of
business strategy defined:
 Accomplishing effectiveness
 Attracting and using opportunities present in industry

Competitive Strategy 6
 Assembling resources into actions
 Securing significant position
 Realizing and overcoming threats and challenges
 Directing efforts in right direction
 Gaining access and authority over current position
Further, it should also be noted that organizations make use of differential business
strategies based on different types of requirement of the business. An organization
needs to introduce new business strategy that suits their business, copying another
organization’s strategy would not result in growth for the business. The business
strategy should be created with considering the internal and external environment of the
organization and what new changes they want to implement in the business. There are
three types of business level strategy prevailing in the environment that are corporate
level strategy, functional level strategy and business level strategy (Namada 2018). The
corporate level strategy is a long term strategy that is action oriented and made by the
top level management of the company. Functional level strategy refers to the strategy
that is developed by the supervisors in order to take the right decisions of the business
functions. Lastly, business level strategy refers to the strategy that is related to the
development of the business and its growth (McDowell, Harris, and Geho 2016).
Use of Business Strategy in the Case
Business strategy is a significant factor that can play lead role in help the organizations
to curb their issues in the international environment and grow. Below mentioned is the
explanation of use of business strategy for the given case:
 The organization Woolworths can achieve success in the market by initiating
differentiated business level strategy in Australian environment. As discussed
above, there is high degree of competition between Coles and Woolworths;
therefore, it has become crucial for the organization to implement business
strategy that helps them to attain competitive advantage in the environment. The
objective of Woolworths organizational business strategy should be to attract the
customers efficiently so that they can serve right services to customers and
increase their level of satisfaction. On the basis of differentiated strategy, the

Competitive Strategy 7
organization should make use of differentiated marketing and production strategy
(David, and David 2019).
On the basis of the marketing strategies, they should initially reassemble the
target market and then implement marketing activities accordingly. They should
initiate online and offline campaigns in the market so as to fight against Coles as
well as Aldi. The company should make use of informative marketing strategy in
the business environment. According to this strategy, the company should inform
the customers about their business process, objective etc. and then implement
strategies accordingly. Further, this will make the customers a part of
organization and attract them to initiate sales as well. The company should also
change the production pattern in order to increase profitability (Thamir, and
Poulis 2015). They should implement decentralized as well as centralized
business structure so that the crucial decisions are taken by top level
management while minor decisions are taken by the employees themselves. This
will reduce the delivery process and would make the decision making process
more efficient as well.
 Focus business strategy: focus strategy refers to the strategy that helps the
business to focus on one segment of the business and attract the customers
using that attribute in the environment. Cost leadership or differentiation are the
two types through which the business can grow by focusing on one segment.
This aspect helps in targeting the niche market by focusing on segment that is
crucial for the organization. The organization should make use of cost leadership
in the Australian supermarket environment with an objective to rise above
competition in the market (Sutton-Brady, Kamvounias, and Taylor 2015).
Low costing of the products would directly attract the customers to purchase the
products from the organization and initiate sales for them. This type of strategy
would help the organization eliminate the problem of competition in the
environment. Further, the organization should also attract smaller target segment
in the market so as to efficiently deliver goods and services to the customers.
Targeting the smaller segments would help the organization to capture their
interest and deliver them services accordingly (Salavou 2015).

Competitive Strategy 8
Conclusion
Thus, in the limelight of above mentioned events, the facts should be noted that
Australian super market industry faces strict competition in the market and it is difficult
for new companies to enter in such market. Woolworths and Coles are two
organizations that hold 80% share of the overall retail segment. Both the companies
rule the retail segment but introduction of Aldi in the given has made it more difficult for
the company position themselves at the right position in the market. The paper
highlighted implementation of business strategy for the company Woolworths to rise
above competition in the market. The business strategy would significantly help the
organization to implement new strategies and grow by targeting the customers in a
better way.
Recommendation
It is recommended to the company Woolworths that they should involve themselves in
different industry where there is presence of less competition in the market. This
strategy would help the organization to increase the overall market share of the group.
The customers would start to listen the name of the company which would act as a
positive factor for supermarket of company. This would also help the organization to
welcome profitability from two segments. The company would not rely on one segment
of business for sales. This process would definitely increase the brand image of the
organization in the international market.

Competitive Strategy 9
References
Beaton-Wells, C. and Paul-Taylor, J., 2017. Problematising supermarket–supplier
relations: dual perspectives of competition and fairness. Griffith Law Review, 26(1),
pp.28-64.
Cândido, C.J. and Santos, S.P., 2015. Strategy implementation: What is the failure
rate?. Journal of Management & Organization, 21(2), pp.237-262.
Cavagnino, A., 2019. Deficiencies in Australia's Current Merger Regime: The Call to
Combat Creeping Acquisitions. Int'l Trade & Bus. L. Rev., 22, p.119.
David, F.R. and David, F.R., 2019. Strategic management: A competitive advantage
approach, concepts and cases. Pearson.
Hardaker, S., 2018. Retail format competition: The case of grocery discount stores and
why they haven’t conquered the Chinese market (yet). Moravian Geographical
Reports, 26(3), pp.220-227.
Hitt, M.A., Jackson, S.E., Carmona, S., Bierman, L., Shalley, C.E. and Wright, M.,
2017. The Oxford handbook of strategy implementation. Oxford University Press.
McDowell, W.C., Harris, M.L. and Geho, P.R., 2016. Longevity in small business: The
effect of maturity on strategic focus and business performance. Journal of Business
Research, 69(5), pp.1904-1908.
Namada, J.M., 2018. Organizational learning and competitive advantage. In Handbook
of Research on Knowledge Management for Contemporary Business Environments (pp.
86-104). IGI Global.
Prajogo, D.I., 2016. The strategic fit between innovation strategies and business
environment in delivering business performance. International Journal of Production
Economics, 171, pp.241-249.

Competitive Strategy 10
Raghunath, S. and Rose, E.L. eds., 2016. International Business Strategy: Perspectives
on Implementation in Emerging Markets. Springer.
Saeidi, S.P., Sofian, S., Saeidi, P., Saeidi, S.P. and Saaeidi, S.A., 2015. How does
corporate social responsibility contribute to firm financial performance? The mediating
role of competitive advantage, reputation, and customer satisfaction. Journal of
business research, 68(2), pp.341-350.
Salavou, H.E., 2015. Competitive strategies and their shift to the future. European
Business Review, 27(1), pp.80-99.
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.
Thamir, A. and Poulis, E., 2015. Business intelligence capabilities and implementation
strategies. International Journal of Global Business, 8(1), p.34.
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic
management and business policy (p. 55). Boston: pearson.