Strategic Management: Coles Supermarkets in Australia: A Report

This report provides an in-depth analysis of the strategic management of Coles Supermarkets in Australia, a retail giant. It includes an overview of the company and its industry, discusses the mission, vision, and business objectives, and examines the internal and external environments. The report elaborates on the strategic objectives aimed at gaining a competitive advantage, explores the organizational structure and corporate culture, and offers recommendations for improving business performance. Key aspects covered are the company's strengths, weaknesses, opportunities, and threats, as well as political, economic, social, and technological factors affecting Coles. The analysis also touches on the importance of value statements, employee training, and technological advancements in maintaining sustainability and competitive edge. The report concludes with actionable recommendations to enhance Coles' market dominance and overall business success.

Running head: STRATEGIC MANAGEMENT
Strategic Management
Name of the Student
Name of the University
Author Note

1STRATEGIC MANAGEMENT
Executive Summary
The purpose of the following report is to demonstrate the various issues in the strategic
management of Coles supermarkets in Australia. It has been regarded as the retail giant in the
country. The overview of the company and industry has been given. The The mission, vision and
business objectives of the company have been discussed here in this paper. The internal and
external environments of this organization have been described as well. The strategic objectives
of the organization have been elaborated on the light of gaining the competitive advantage. The
other two things discussed in this paper are the organizational structure and corporate culture.
The recommendations for improving the business performance have been provided.

2STRATEGIC MANAGEMENT
Table of Contents
Introduction......................................................................................................................................3
Overview of the chosen organization and industry.........................................................................3
Mission statement of the organization.............................................................................................4
Vision statement of the organization...............................................................................................4
Value statements and business objectives.......................................................................................5
Business environment of the organization.......................................................................................6
Internal business environment.....................................................................................................6
External business environment....................................................................................................8
Strategic objectives of the organization.........................................................................................10
The generic strategies....................................................................................................................11
Organizational structure.................................................................................................................12
Corporate culture...........................................................................................................................13
Recommendations..........................................................................................................................13
Conclusion.....................................................................................................................................14
References......................................................................................................................................15

3STRATEGIC MANAGEMENT
Introduction
This paper focuses on the various issues about the preparation of the business strategies.
This strategic planning will be very much helpful to analyze the different issues and challenges
the selected organization will be facing. The organization that is selected for completing this
paper is Coles Supermarkets. This organization is situated in Australia. It is indeed useful to
identify the different components of the business strategy that the organization follows. The
overview of the chosen organization will be given of this organization and the industry as well.
The internal and external environments of the company would be discussed. The strategic
objectives that the organization has taken will be evaluated and discussed if it is appropriate or
not. The five generic strategies and the different components of the business strategy will be
discussed here as well. The recommendation should be given about the things of how they
should implement these strategic objectives and better their chances of market dominance in
their concerned industry.
Overview of the chosen organization and industry
The Chosen organization for this paper Coles Supermarkets operates in the retail industry
and it is one of the most successful retail companies in Australia (Coles.com.au 2018). The
organization Coles Supermarkets began in the year 1914 in the month of April. They are
considered to be the pioneers in the retail industry in the country and they have expanded to
other countries as well. The founder of this company was George Coles (Coles.com.au 2018).
One of the most important sections they contribute is its employability. There are about 10,000
people being employed in this country. Food retailing has become one of the major targets for
Coles Supermarkets. The headquarters of this organization is situated at Melbourne in Australia.

4STRATEGIC MANAGEMENT
They provide their consumers with the best quality services and products all through. This has
added to their reputation. The Managing Director of this organization is John Durkan. The
annual revenue of this company in the year 2016 was A$33.00 Billion (Coles.com.au 2018) This
is why they contribute a lot to the economic growth of Australia. The parent company of this
organization is Wesfarmers. The advertising strategies they have adopted to be successful cater
to their business performance in a large way (Zakaria et al. 2014). One of their major rivals in the
retail supermarket industry is Woolworths.
Retail business industry is one of the most common and popular businesses in Australia.
There are more than 100,000 retail businesses in the country of Australia. The retail industry is
responsible for employing around 10.7% of the entire employment in Australia (Coles.com.au
2018) It contributes a lot to the GDP growth of the country (Costanza et al. 2014). This is why
Australian retail supermarket industry is a very important source for the total income of the
country.
Mission statement of the organization
The mission statement of Coles supermarket is-
“We are innovative industry leaders who supply customers with value, convenience and superior
service.” (Coles.com.au 2018)
Vision statement of the organization
The vision statement of the Coles supermarket is-
“Serving you better” (Coles.com.au 2018)

5STRATEGIC MANAGEMENT
This means they focus on the customer satisfaction more than anything else and give the
ultimate priority to them. They are liable provide the customers with the best experience with the
excellence in operations, customer value proposition and innovating new kinds of products
(Osterwalder et al. 2014).
Value statements and business objectives
The value statements are very important for the enhancement of the business performance
of all the organizations. This is no exception for Coles supermarkets as well. They have aimed
for some objectives that are very important to become successful and the global leaders in their
concerned retail supermarket industry.
 To become the best employers by the choice of the employees
 To increase the permanency level within the company (Coles.com.au 2018)
 They want to become the industry leaders by developing the education and training
programs for the employers. This will educate the employees in a better way and train
them to become the valuable assets of the organization. The employees can get better
opportunities if they stay in Coles and this will enhance their career opportunities as well.
 To identify the core competencies of the organization (Coles.com.au 2018)
 They want to train the employees in a way that they can go for achieving the core
competencies and the business objectives as well.
 To take up a better communication strategy for connecting with the customers in a better
way (Coles.com.au 2018)
The mission, vision and value statements are very much important gaining the
competitive advantage over their competitors (Campbell, Coff and Kryscynski 2012). They

6STRATEGIC MANAGEMENT
have indulged themselves in the better efforts to provide their customers with better
strategies. They have focused on educating their employees properly so they can achieve the
best results and give their best efforts for the marketing of the products. Their most important
target is gaining the competitive advantage over the rivals. This is why they will look to
utilize all the resources to succeed. So, the vision, mission and value statements can be
evaluated to be very much appropriate indeed.
Business environment of the organization
Coles works in a business environment that is very much suitable for them to gain the
competitive advantage. However, the retail chain industry is a very competitive industry indeed.
This is why the organizations have to take under consideration several things. They face several
issues and challenges in order to maintain their stability in the industry (Babatunde and Adebisi
2012). They have their corporate social responsibilities as well. These responsibilities will help
them to build up a good image in front of the society. Thus they can make their business
sustainable enough. In order to this they will need to assess their internal and external business
environments. The internal and external environments of the organization Coles Supermarkets
will have to be analyzed in this section for better insight into the matter (Babatunde and Adebisi
2012)
Internal business environment
Strengths
 Coles supermarket is considered to be the largest food retail chain in the industry.
 The services and products that Coles provide, saves cost of the customers in a big way.

7STRATEGIC MANAGEMENT
 The products that are sold are very much indigenous in their nature (Roper and Fill
2012).
 Coles has a very strong brand value and their market reputation is very high.
 The Corporate social responsibilities are very much effective for Coles (Schwartz 2017).
 Their environmental sustainability is very high and their products are also environment
friendly as well.
Weaknesses
 Coles supermarket always faces several issues and problems from their suppliers.
 Coles has some management issues and the leadership problems are also evident in their
business operations as well (Hill, Jones and Schilling 2014).
Opportunities
 Coles can follow the Private Label strategy that would be highly beneficial for them to
grab a larger market share indeed.
 Apart from the food and grocery sector, they have a good option of expanding into the
liquor sector.
 They can opt to enter into the insurance and finance sector activities. If they can provide
the customers with the better options, this will be very much evident for them.
 They can scan their target market for developing new market segments and approaching
that target market for better profits (Armstrong et al. 2015).
Threats

8STRATEGIC MANAGEMENT
 The legal and political issues of Australia can be a hindrance in their business market
operations.
 If they venture into different sectors they will have to confront with several market
leaders. Then they will have to adopt several new marketing strategies (Baker 2014).
 The competitors of Coles have very strong brand identities and this can be a real
challenge for them indeed.
 There are several competitors for Coles in the evolving sectors.
 As Coles operates mainly in food sector, they will have to be aware about the changing
taste of Australians regarding food.
External business environment
Political factors
Several changes have taken place in the last few years in Australia that have changed the
entire political scenario of the country. The political stability is one of the most significant
aspects in the country. This has really affected the condition of the retail business industry to a
large level. The Federal Government of Australia has developed the Australian Competition and
Consumer Commission (ACCC) (Competition 2012). This association formulates all the
proceedings in the retail industry of the country. The ACCC has gone on to make many changes
in the entire policy regulations regarding the country’s retail sector. This has completely given
more opportunities for the companies to engage in more competition. The approach of the
government is very much significant in the market success of Coles (Jurevicius 2013).
Economic factors

9STRATEGIC MANAGEMENT
The current economic issues have been affecting the consumer decision making process
for Coles. The consumer buying powers have reduced and this is why the sales of Coles have
been going downwards. The flexible goods or products manufactured by Coles have been largely
affected as well (Makos 2015). The consumers have targeted to shift into the private labels as
they want to save their costs. Thus the private label strategies adopted by other organizations
have led them to higher margins of profits. The business operations of Coles will have to suffer if
they cannot offer the customers with the low cost alternative products.
Social factors
The Australian customers are very much sensitive so Coles has to manufacture the
products according to the needs of the customers. This is why Coles must make the market
surveys and know about the priorities of the customers (Makos 2015) They can opt for extending
their trading hours so they can meet the demands of the customers in a better way. They might
look to increase the convenience of the customers by widening the product range. They have to
produce the food products that will be good for the health of the customers. This will sustain
their business in the best ways. They have to respond positively to the market changes (Makos
2015).
Technological factors
The technological advancement has been a very instrumental factor in the advancement
of their business. The employees of the Coles supermarket have the proper training about the use
of technology. This will be highly beneficial for Coles to gain the sustainability and competitive
advantage over their rivals. Most of the people in Australia use computers, laptops and other

10STRATEGIC MANAGEMENT
technological devices in Australia (Baden-Fuller and Haefliger 2013). This is why they will look
to indulge in taking the benefits of technological advancements in the retail sector.
Environmental factors
Coles must look to focus on the environmental sustainability of the company. They must
produce the products in a way that could be good for the health of the consumers. They must
comply with the WHO regulations about the use of chemicals in food. They can also use the
environment friendly raw materials which will be very efficient to gain the competitive
advantage (Makos 2015)
Legal factors
Coles has to maintain all the legal regulations that have been developed by the Federal
Government of Australia. They should avoid the negligence or violation of these rules so they
can sustain their business for a longer time and overcome the odds in their business environment
(Makos 2015)
Strategic objectives of the organization
Coles has been the leading retail supermarket company in the retail grocery chain. In
order to keep their place in the industry they have adopted some strategies that will be very much
important. They look to focus on the employee training programs and give the most priority to
the customers. They have brought out certain products and services by keeping in head the needs
of the customers (Van Der Aalst La Rosa and Santoro 2016). The customer behavior of the
Australian people is always changing. They sell various types of products like groceries, bakery
products, baby products, mobiles, gift cards and many more. This is why they get the customer

11STRATEGIC MANAGEMENT
attention all the ways. Coles has played a pioneering role in the application of cost leadership
strategy (Valipour, Birjandi and Honarbakhsh 2012).
They like to offer their customers with several types of products at lower prices. This
helps in building the trust of the customers in a big way. Thus the customers will be able to save
more money by buying their products. If they want to train their employees for providing a better
service, they will be highly benefitted. The employees will thrive to give their best efforts in their
positions. This will help the organization collectively. They are present in the online market as
well namely Coles Online. They give their customers with various benefits and offers that cater
to the gaining of consumer loyalty (Martínez and del Bosque 2013). Thus their strategic
objectives can fit into their services very appropriately.
The generic strategies
The generic strategies are very important for the describing the competitive strategies
adopted by the organizations. There are five generic strategies that could be adopted by the
organizations. These strategies are low-cost provider strategy, broad differentiation strategy,
focused low cost strategy and best cost provider strategy. The most important strategy that could
fit into the business operations of the Coles group is the low-cost provider strategy (Tanwar
2013). There are several new competitors in the retail industry for Coles in the recent times.
They have to catch up with some new ways to cope up with those challenges. As Coles has been
the market leaders in the retail industry they should have approached the pricing strategy with
higher prices but they are facing the challenge regarding the price (Tanwar 2013)
In this time of the global recession the customers want the products at lower prices.
Sometimes they are even ready to compromise with the quality as well. This is why Coles has

12STRATEGIC MANAGEMENT
decided to focus on the cost effectiveness of their product. This will be very much useful for
them indeed. They want to focus more on the desire of the customers. They decided to invest on
the customers. This could prove to be fruitful and very effective in order to gain thee customer
attention. The reason for taking up this low cost generic strategy is to have a better brand
positioning in the market (Teeratansirikool et al. 2013). The income of the Coles in the last few
financial years has been really fascinating. Thus they could achieve a better market position.
Organizational structure
The organizational structure is a very important matter for understanding the decision
making strategies of the company. This is also involved with the leadership strategies of the
companies. The organizational structure will determine of how Coles can deal with the different
issues and challenges that will occur in front of them in their country (Ashkenas et al. 2015). The
current Managing Director of the company John Durkan has been responsible for providing a
better customer service to the customers in all the states and territories. There are many business
units in the company and the heads of these units have the responsibility of looking after these
units properly. The different sections like the accounts and finance, human resource
management, quality management and all other departments are present in the company
(Ashkenas et al. 2015).
All these sections will thrive to deliver their best efforts to achieve the success for the
organizations. The human resource managers always look to recruit the best employees for the
success of the organization. They provide the proper training and skill development for the
employees in the best ways. The training and skill development facilities will help the employees
to grow and show their perfection (Ashkenas et al. 2015). They pay the employees with the right

13STRATEGIC MANAGEMENT
amount of wages. The operation managers will look to implement the several strategies for the
betterment of the organization. The managers will drive to motivate the employees and inspire
them to make new innovations in producing new food and grocery products. Thus they can go on
to improve their services in the business industry.
Corporate culture
The corporate culture of Coles is very motivating since the managers keep on motivating
the employees to achieve the strategic business objectives of the company. They provide a very
coordinating business culture within their company. They take important measures regarding the
cross-cultural issues (Eccles, Ioannou and Serafeim 2012). They like to provide the employees
with the proper training so they can avoid these cultural clashes with the employees who belong
to different cultures and ethnicities. The managers of Coles supermarkets always stress on
sustaining in a good corporate culture so they can retain the talented and skillful employees. This
would increase their effectiveness of the business as well.
Recommendations
It is very important to highlight the factors that the retail industry in Australia should
focus on. As the market leaders in the retail industry in Australia, Coles should look to
implement the technological procedures within their operations. This will enhance their working
capabilities to a certain extent as well. They have to achieve their business objectives in order to
grow in their industry. Thus only they can stay ahead of their competitors properly. It is also very
important for Coles to stay present in their online operations (Andrews and Shimp 2017).

14STRATEGIC MANAGEMENT
They must receive the orders from the customers and supply the goods to their addresses
within a certain amount of time after the procedures of shipping, packing and delivering. Coles
should make deals with strong and effective logistics and supply chain organizations so they can
deliver the goods within the fixed time. This will really be effective for them and sustaining their
brand reputation (Andrews and Shimp 2017). The retail companies in Australia have not been
able to match with the changing consumer preferences over the years.
This is why Coles should make the proper market research and adopt the best strategy to
know about the needs of the customers properly. They should also concentrate on producing
organic and health safety products. They should focus on the substantial cost savings as well.
These ways could help them for a better future and securing the competitive advantage.
Conclusion
It can be concluded that the paper has highlighted upon the most important factors for the
business strategies of Coles supermarkets. The most necessary issues have been highlighted in
this paper along with the vision, mission and business objectives of Coles. The internal and
external business objectives of the organization have been discussed as well. The generic
strategies have been discussed and the best generic strategy for Coles has been recommended.
The necessary recommendations for the improvement of the business performance of Coles
supermarkets.

15STRATEGIC MANAGEMENT
References
Andrews, J.C. and Shimp, T.A., 2017. Advertising, promotion, and other aspects of integrated
marketing communications. Nelson Education.
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction.
Pearson Education.
Ashkenas, R., Ulrich, D., Jick, T. and Kerr, S., 2015. The boundaryless organization: Breaking
the chains of organizational structure. John Wiley & Sons.
Babatunde, B.O. and Adebisi, A.O., 2012. Strategic Environmental Scanning and Organization
Performance in a Competitive Business Environment. Economic Insights-Trends &
Challenges, 64(1).
Baden-Fuller, C. and Haefliger, S., 2013. Business models and technological innovation. Long
range planning, 46(6), pp.419-426.
Baker, M.J., 2014. Marketing strategy and management. Palgrave Macmillan.
Campbell, B.A., Coff, R. and Kryscynski, D., 2012. Rethinking sustained competitive advantage
from human capital. Academy of Management Review, 37(3), pp.376-395.
Coles.com.au (2018). Coles Supermarkets. [online] Coles.com.au. Available at:
https://www.coles.com.au/ [Accessed 25 Apr. 2018].
Competition, A., 2012. Consumer Commission (ACCC)(2012). Benchmarking Opex and Capex
in Energy Networks.

16STRATEGIC MANAGEMENT
Costanza, R., Kubiszewski, I., Giovannini, E., Lovins, H., McGlade, J., Pickett, K.E.,
Ragnarsdóttir, K.V., Roberts, D., De Vogli, R. and Wilkinson, R., 2014. Development: Time to
leave GDP behind. Nature, 505(7483), pp.283-285.
Eccles, R.G., Ioannou, I. and Serafeim, G., 2012. The impact of a corporate culture of
sustainability on corporate behavior and performance.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
Jurevicius, O., 2013. Pest & pestel analysis. Strategic Management Insight, 13, p.2013.
Koschate-Fischer, N., Cramer, J. and Hoyer, W.D., 2014. Moderating effects of the relationship
between private label share and store loyalty. Journal of Marketing, 78(2), pp.69-82.
Makos, J., 2015. An Overview of the PESTEL Framework. PESTLE Analysis, 18.
Martínez, P. and del Bosque, I.R., 2013. CSR and customer loyalty: The roles of trust, customer
identification with the company and satisfaction. International Journal of Hospitality
Management, 35, pp.89-99.
Osterwalder, A., Pigneur, Y., Bernarda, G. and Smith, A., 2014. Value proposition design: How
to create products and services customers want. John Wiley & Sons.
Roper, S. and Fill, C., 2012. Corporate reputation, brand and communication. Pearson Higher
Ed.
Schwartz, M.S., 2017. Corporate social responsibility. Routledge.

17STRATEGIC MANAGEMENT
Tanwar, R., 2013. Porter’s generic competitive strategies. Journal of business and
management, 15(1), pp.11-17.
Teeratansirikool, L., Siengthai, S., Badir, Y. and Charoenngam, C., 2013. Competitive strategies
and firm performance: the mediating role of performance measurement. International Journal of
Productivity and Performance Management, 62(2), pp.168-184.
Valipour, H., Birjandi, H. and Honarbakhsh, S., 2012. The effects of cost leadership strategy and
product differentiation strategy on the performance of firms. Journal of Asian Business
Strategy, 2(1), p.14.
Van Der Aalst, W.M., La Rosa, M. and Santoro, F.M., 2016. Business process management.
Zakaria, I., Rahman, B.A., Othman, A.K., Yunus, N.A.M., Dzulkipli, M.R. and Osman, M.A.F.,
2014. The relationship between loyalty program, customer satisfaction and customer loyalty in
retail industry: A case study. Procedia-Social and Behavioral Sciences, 129, pp.23-30.