HI6006 Competitive Strategy: Case Study Analysis and Report

This report provides an in-depth analysis of competitive strategy within the Australian supermarket industry, using Woolworths as a case study. It examines the challenges posed by competitors like Coles and the emergence of Aldi. The report delves into the strategic issues of competition and differentiation, discussing the implementation of business strategies such as differentiated marketing and focused low-cost leadership. It highlights the importance of adapting strategies to gain a competitive advantage and maintain a strong market position. The report offers recommendations for Woolworths, including the use of offensive and focused differentiation strategies to enhance its competitiveness and overall growth in the market. The report also provides a detailed overview of business strategy, including the different levels (corporate, business, and functional) and their application in the case study. The report concludes with a summary of the findings and recommendations for Woolworths to improve its market position.

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Competitive Strategy
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Competitive Strategy 1
Contents
Introduction......................................................................................................................................1
Summary of the Case.......................................................................................................................1
Analysis of Strategic Issue...............................................................................................................1
Business Strategy.............................................................................................................................2
Use of Business Strategy in the Case..........................................................................................3
Conclusion.......................................................................................................................................4
Recommendation.............................................................................................................................4
References........................................................................................................................................5

Competitive Strategy 2
Introduction
The aim of this report is to explain the reader about the meaning and use of business
strategy. Business strategy refers to the long term plan of action that is designed to help
the business to sustain their image in the market and grow. Strategy refers to the plan
inculcated by the management in the organization with an aim to strengthen its
performance and become competitive as well (Chang 2016). The case study of
Australian Supermarkets competition and rivalry is taken into account for the analysis of
the strategy. The report includes analysis of the case and the strategic issue along with
the implementation of diversified business strategies for them. Further, the fact should
be noted that the case study underlines the different attributes of the supermarket along
with the challenges faced by companies survive in such competitive environment. More
details about the paper are discussed below:
Summary of the Case
The case explains the presence of different organizations in the Australian supermarket
industry along with the challenges faced by other small organizations to manage their
growth in high level of competition. Coles and Woolworths are two large and extremely
famous organizations that are present in the Australian supermarket industry and cover
around 80 per cent of the activities happening in the industry. The dominance of these
two companies reduces the efficiency of other companies. Later on IGA (Metcash
brands) have also partly challenged the activities of both the large retailers in the
business environment. However, with the emergence of low cost discounted stores in
the business environment, the companies Coles and Woolworths have started facing
stability issues in the business environment.
Aldi is a German discounted retail chain store that has recently entered in the market of
Australia. Entrance of Aldi will make the life of Coles and Woolworths difficulty as they
are already struggling to compete with each other and emergence of new competitor will
displace their position in the external market. Further, it should be noted that Coles and
Woolworths are far more than just retail supermarket stores as Coles is a part of
Wesfarmers that is an international conglomerate in the international business
environment. Lastly, it should be noted that the entrance of Aldi has disturbed the
activities of all the retail companies present in the Australian industry. The Woolworths
strategies challenge IGA system due to which its efficiency is reduced in the market. On
the other hand Aldi is playing major role in negatively influencing the position of big
firms like Woolworths and Coles in the country. Thus, such activities make it difficult for
Woolworths to sustain its position in the market while achieving for growth as well.
Analysis of Strategic Issue
Competition and differentiation are the biggest strategic issue given in the case
analysis. Initially Woolworths was facing competition with Coles present in the
Australian supermarket. As discussed in the case that these two are the major

Competitive Strategy 3
companies present in the industry so both of them strive to achieve the position that is
bigger than the other. The fact should be noted that both the company are diversified
working activities in the business environment like Coles part of Wesfarmers that is a
conglomerate while Woolworths has 527 liquor stores and 327 other licensed outlets,
600 co-branded petroleum outlet and Big W stores. Both the company perform same
actions in respect of operations, marketing and promotions etc. activities that makes the
level of competition constant. Like, when Woolworths was falling back from Coles, they
organized a new fresh food for people department which subsequently increased its
sales in the market (Wheelen, et. al., 2017). Then Coles also followed this strategy of
Woolworths to eliminate differentiation in the market. The supply chain activities of the
company are also high established and somewhat similar. Thus, the company
Woolworths struggle to maintain a differentiated position in the Australian supermarket
industry against Coles.
Meanwhile other strategic issue that was faced by the company was high degree of
competition. This fact is true that competition can eat the growth and profitability of the
company alive in just a short time span. IGA can be seen as one of biggest result of
high level competition in the environment. Emergence of Aldi in the country has
attracted many people in the business environment which has certainly reduced the
competence of the company in Australia. Aldi is providing cost effective products to the
customer while promising for reducing carbon emission from its activities. In this way,
the organization is satisfying all the stakeholders present in the market. Aldi has
different organizational structure and channels of business due to which it can offer
products at low rates but Woolworths cannot follow the same to attain success in the
business environment (Cândido, and Santos 2015).
Business Strategy
Business strategy is a segment of strategic management that involves the formulation
an implementation of activities to implement major goals in the business environment.
Business strategy is an initiative taken by the top management of an organization on
behalf of its customers in consideration to the resources and the internal and external
business environment as well. A business strategy answers the question that is how the
business shall compete in the external environment. A business strategy can also be
understood as the course of actions that helps the business management in achieving
specific business objectives in the target market (Howsley, Gradt, and Delgado 2015).
Business strategy can also be referred as a master plan that the management of the
company use to secure the competitive position in the market, carry on the business
functions and satisfy the customers by achieving the desired ends of the company. It is
a long term objective for the business that will help the company to achieve the desired
destination as well. Further, the purpose of the business strategy are mentioned below
 Achieve effectiveness
 Utilize appropriate opportunities in the environment
 Mobilise challenges and threats
 Direct the efforts and behaviour of people
 Gain command on the external as well as internal situation (Hitt, et. al., 2017)

Competitive Strategy 4
Further, it should be noted that the companies use different business level strategies
based on their environment and objectives for business. A company copying the
business strategy of another successful company will not succeed in the environment
because both the organizations have different difficulties to face along with diverse
external and internal environment. There are three levels of business strategy that are,
corporate level strategy, business level strategy and functional level strategy. The
corporate level strategy is long term, action oriented plan formulated by top level
management of company. Business level strategy is related to particular business level
that is developed by general managers. Lastly, functional level strategy is developed by
the supervisors that involve taking decisions for the functional level (Goffin, and Mitchell
2016).
Use of Business Strategy in the Case
 The Company Woolworths should make use of differentiated business strategy to
grow against the company Coles in the target market. The competition between
Coles and Woolworths is extensive, so it is important for the company to align the
business strategy in such a way that they achieve competitive advantage in the
target market. The main aim of this business strategy should be noted increase
competitive advantage of the business in the target market by creating
differentiation through its activities. Further, should be noted that no matter what
strategy Woolworths implement in the target market, Coles always follow it to
eliminate competition in the target market (Goffin, and Mitchell 2016).
So, the company should use differentiation strategy to differentiate the marketing
activities of the company in the target market. With the differentiated marketing
strategy, the company will gain the advantage to attract more and more
customers in the target market. The differentiated marketing activities will capture
the complete target market and highlight the diversified activities of the company
in front of them. By the time Coles will start implementing such strategies in the
target market, Woolworths would already have captured major share in the target
market (Raghunath, and Rose 2016). This process will increase the effectiveness
of the company and will provide them competitive advantage as well. This
strategy will help the company to attract the people are maintain a dignified
position in the market with the short time that is left with them before Coles
implement the same. Thus, in this way the company will attain an identified
image in the market against Coles that will help them to achieve greater success
in the market by eliminating competition (Merrett 2019).
 Focus: The focus strategy involves the process of achieving cost leadership or
differentiation in the niche market by focusing on the areas where other
competitors are unable to focus. The company should make use of focused low
cost leadership strategy in the business environment to achieve growth. This
type of strategy not only compete with the competitors on the basis of price but it
also select small segment from the market to provide goods and service to. In
this way, the company will get to relate to the people of Australia and provide
them satisfaction accordingly (Grimmer 2017). Talking about the company Aldi, it
should be noted that the company has come from Germany while Woolworths is
originated in Australia only.

Competitive Strategy 5
So, the company knows better about the choices and preference of the
customers in the target market. This type of strategy will provide a view to the
customers that the company Aldi provides all products at discounted rates but
Woolworths provide only highly demanded products at discounted rates just for
the people of Australia (Beaton-Wells, and Paul-Taylor 2017). This type of
activity increases the attachment of the customers for the company in the target
market. Thus, it should be noted that this will help the company to remain
profitable as it will not reduce the price of the products. Also, it will help the
company to eliminate competition in the market by working on the satisfaction
level of customers and making the people believe that Aldi is an alien company
while Woolworths is a domestic company (Stanton 2016).
Conclusion
By concluding the above mentioned statements, it should be noted that the paper
elaborate the meaning and need of business strategy in an organization. A case of
competition between various firms present in Australian supermarket is discussed that
elaborate the level of intensity in the operations of the companies. Furthermore,
business level strategy for the company Woolworths is highlighted in the paper so as to
guide the readers about the ways with which they can improve the position of the
company and gain competitive advantage as well. Recommendations are also provided
to the company for its growth and survival.
Recommendation
The company Woolworths should make use of above mentioned business level strategy
along with which they should implement other strategies to increase the
competitiveness of the company. The company should make use of offensive
competitive strategy to grow and eliminate high degree of competition in the target
market. This type of strategy will improve the competition in the market as the company
will initiate acquisition strategy in the market. Like Woolworths acquired its competitor
Mallam supermarket. Further, the company should also implement focused
differentiation strategy to grow and succeed in the target market (Galpin, Whitttington,
and Bell 2015). This will also help the company to achieve competitive advantage in the
target market.

Competitive Strategy 6
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.
Chang, J.F., 2016. Business process management systems: strategy and
implementation. Auerbach Publications.
Galpin, T., Whitttington, J.L. and Bell, G., 2015. Is your sustainability strategy
sustainable? Creating a culture of sustainability. Corporate Governance, 15(1), pp.1-17.
Goffin, K. and Mitchell, R., 2016. Innovation management: effective strategy and
implementation. Macmillan International Higher Education.
Grimmer, L., 2017. Is it so hard to say sorry? Revisiting image restoration theory in the
context of Australian supermarkets. Asia Pacific Public Relations Journal, 18, pp.17-32.
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.
Howsley, R., Gradt, V. and Delgado, R., 2015. Effective Strategy Implementation: Best
Practice that Really Works (No. IAEA-CN--220).
Merrett, D.T., 2019. The Making of Australia's Supermarket Duopoly, 1958–
2000. Australian Economic History Review.
Raghunath, S. and Rose, E.L. eds., 2016. International Business Strategy: Perspectives
on Implementation in Emerging Markets. Springer.
Stanton, R., 2016. Corporate strategic communication: a general social and economic
theory. Macmillan International Higher Education.
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic
management and business policy (p. 55). Boston: pearson.