Competitive Strategy: Analysis of Australian Supermarkets (HI6006)

This report analyzes the competitive strategies of Australian supermarkets, focusing on Coles, Woolworths, and Aldi. It explores various aspects, including business strategy, competitive dynamics, corporate strategy, acquisitions, and cooperative strategies. The report discusses business strategies such as low-cost provider and Porter's strategies, product portfolio strategy, and strategic management models. Competitive dynamics, corporate strategy, organizational resources, and models are also examined. The analysis covers acquisitions and structure, including business, contracting, and sustainment strategies. The report also touches upon cooperative strategies. The report references academic sources and provides a comprehensive overview of the competitive landscape within the Australian supermarket industry, highlighting how these companies gain competitive advantages.

Running head: COMPETITIVE STRATEGY
Competitive Strategy: Australian Supermarkets
Name of the Student
Name of the University
Author’s Note:

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Executive Summary
The main aim of this report is to know about the competitive strategy for Australian
supermarkets like Woolworths, Aldi, Coles and few others. They have been ruling
the market for several years with their unique business and competitive strategy.
There are some of the most important and significant types of competitive strategy,
which include cost leadership, differentiation, cost focus and differentiation focus.
Several popular and significant organizations are following these competitive
strategies for bringing better effectiveness in the business. This report has clearly
described about the various aspects of competitive strategy like business strategy,
cooperative strategy acquisitions and structure, corporate strategy and competitive
dynamics for Australian supermarkets with relevant details.

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Table of Contents
1. Introduction...............................................................................................................3
2. Discussion................................................................................................................3
2.1 Business Strategy...............................................................................................3
2.2 Competitive Dynamics........................................................................................5
2.3 Corporate Strategy..............................................................................................6
2.4 Acquisitions and Structure..................................................................................8
2.5 Cooperative Strategy..........................................................................................9
3. Conclusion..............................................................................................................10
References.................................................................................................................11

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1. Introduction
Competitive strategy can be referred to as the long term planning of an
organization for gaining several competitive benefits over its competitors within the
industry. This type of strategy aims at creation of defensive position in market and
hence generating more profit (Madsen and Walker 2015). Australian supermarkets
like Coles and Woolworths are responsible for providing several advantages to their
customers. They have been successful for their unique strategies and acquisitions.
The following report outlines a brief discussion on competitive strategy for Australian
supermarkets. The business strategy, competitive dynamics, corporate strategy,
structure and acquisitions, international strategy, cooperative strategy and
sustainability.
2. Discussion
2.1 Business Strategy
Business strategy can be referred to as the working plan of an organization so
that they are able to achieve the organizational vision, prioritization of objectives,
successful competition and finally optimization of financial performances with the
business model (Noe et al. 2017). It is a significant set of decisions or curse of action
that subsequently assist the businesses to achieve respective business goals. This
is a major master plan, which the respective organizational management utilizes for
securing a specific competitive position within the market, carrying out of operations,
ensuring customer satisfaction and even achieving desired business ends. Since,
business strategy is a long range sketch of every desired image, destination and
direction, the corporate intent and actions are being planned and made flexible to
achieve effectiveness, mobilising resources, meeting threats and challenges,

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securing advantageous positions, obtaining commands over situation and many
more (Block et al. 2015). An integrated framework is eventually equipped by the top
management for discovering, analysing and even exploiting beneficial opportunities
so that optimum utilization of resources is possible to counterbalance the respective
business weaknesses. In Australian supermarket, Coles and Woolworths are
dominating the entire market by more than 80 percent of the market share and
recently they have faced challenges due to Aldi. Competition between Coles and
Woolworths is constant and is even hostile. However, in 1980, Woolworths lagged
Coles for becoming fresh food people. Supply chain of such supermarkets is well
established and the tight contracts are eventually signed for both vegetables and
fruits.
Some of the major and the most significant strategies of business that define
the business of Australian supermarkets include:
i) Low Cost Provider Strategy: This is the first and the foremost business
strategy that can be related to Australian supermarkets (Huo et al. 2014). Market
share would be gained on the basis of profitability and business processes.
ii) Porter’s Business Strategies: There are four strategies proposed by
Porter, which are cost leadership, cost focus, differentiation leadership and
differentiation focus. The broader range of industry segments and market of
Australian supermarkets is being analysed on the basis of these strategies.
iii) Product Portfolio Strategy: According to this strategy, the product scope
and role of marketing are being involved in product strategy and market analysis is
done on a priority basis (Lee, Yoo and Kim 2016). The products of all supermarkets
are almost same, however, often Woolworths have been a key player in the market.

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The target market and program positioning strategy is being involved in this strategy
and thus inclusion of retailers, distributors and wholesalers is possible in the
business.
iv) Strategic Management Model: Australian supermarkets like Coles and
Woolworths have implemented strategic management model in their business for
planning and implementing business strategies (Hernández-Perlines, Moreno-García
and Yañez-Araque 2016). They have done strategic analysis, formulation of strategy,
proper implementation and finally monitoring of the strategy.
2.2 Competitive Dynamics
It is one of the major and important requirement that is used for describing
several actions within competitive business environment (E. Armstrong 2013). The
individual competitive actions are termed as the major indicators of competitive
dynamics since every organization is enacting the actions for the core purpose of
enhancing their competitive advantages in comparison to the competitors. The
organizational performances are determined for understanding the importance of
industry forces (McGrath 2013). All the organizations eventually undertake some of
the major actions that provide response from the competitors that have chance of
providing high competition. Competitive rivalry is being existed between Aldi, Coles
and Woolworths.
The main reason for this type of competition is that all of them provide similar
products with similar range of costs. However, due to popularity, often this
competition is enhanced majorly (Bereznoi 2015). The strategic management model
provides better analysis of this aspect of competitive strategy. Different opportunities
are being obtained for ensuring more effectiveness and efficiency. Moreover, vision

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and mission strategy formulation is possible with this specific management model.
One of the major as well as the most significant aspect of organizational operations
is the subsequent construction of alternative market share. Both Coles and
Woolworths have strived to establish few stores in every area of population growth
and these stores seem to be inevitable segments of the growth area (Mithas, Tafti
and Mitchell 2013). The mission of all Australian supermarkets is almost same to
provide better products to their customers in limited costs. Thus, the competition is
extremely high and market position should be maintained by them for getting more
competitive advantages and gaining profit.
2.3 Corporate Strategy
Corporate strategy can be referred to as a strategic plan of a company that
eventually defines the various corporate goals as well as directions and even the
technique by which these goals would be achieved within several activities of
strategic management (Bharadwaj et al. 2013). This corporate strategy is a specific
long term and clearly defined vision of organizational direction. It is even used for
determination of overall business value, setting of strategic goals or objectives and
even motivating the employees and staff for achieving them. Corporate strategy also
sets out a significant planning for what is required to be obtained with timeframe.
However, this corporate strategy is a constant procedure, which should have the
core ability of responding correctly for the respective changing conditions or
surroundings of market situation. For understanding the case study of Australian
supermarkets, a proper corporate strategy is required to be considered (Collett Miles
2013). As corporate strategies are responsible for influencing process of
organization creating value, it majorly refers to the factor that it should effectively

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cover both product portfolios and the business strategies for organizational aspect
and resource.
i) Product Portfolio: It is the basis for which the entire organization is
working. The respective organization requires to be absolutely clear regarding what
is to be delivered and who would be delivering it (Bottery 2013). The various pricing
strategies ad competitive advantages are subsequently considered for obtaining
strategic documents like business strategies as well as marketing strategies.
ii) Organizational Resources: The second corporate strategy of Woolworths
and Coles is ensuring that all the organizational resources have the core capability of
delivering significant products (Espino-Rodríguez and Lai 2014). A basic assessment
of all the existing resources is being done as these strategies have the core
responsibility of acquiring the factor that these strategic objectives could be more.
Moreover, since Woolworths and Coles both have opted for corporate strategy, it is
extremely important and significant for them to ensure that even the staff are working
efficiently since they are the major organisational resources (Teeratansirikool et al.
2013). This particular advantage even is ensuring that partial strategic documents
like human resources strategy, IT strategy and financial strategies are being
elaborated on time and hence helping the business in achievement of more
organizational goals and objectives.
iii) Organizational Model: The next type of corporate strategy for
Woolworths and Coles case study is organizational model. An effective and efficient
organizational model has the core capability of eradicating all types of issues and
complexities easily and promptly. This particular model sets up procedures, overall
operating principle and even organization structure for achievement of the strategic

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goals (Singer 2013). This is no such optimal model for using a management system
and ensuring proper working state of the culture and resources. After Mallam’s
planned supermarket, it was observed that Woolworths was in a much better position
in comparison to all Australian supermarkets. After Aldi entered into the market, it is
being noticed that they have focused on digital application and digital marketing. The
application of Aldi allows the customers to book their products and get them
delivered at home. Due to this marketing, even Aldi is enjoying a stable position in
the industry of Australian supermarkets (Mithas, Tafti and Mitchell 2013).
Woolworths has also started their mobile technology application for allowing the
customers to order anything without any complexity. Thus, corporate strategy is
better for both Aldi and Woolworths.
2.4 Acquisitions and Structure
Another important and significant type of completive strategy is acquisitions
and structure of the company. This acquisition strategy is a typical comprehensive
planning, which majorly identifies as well as describes the subsequent approach of
acquisition and ensure that the program management would follow the important of
managing program risks and hence meeting objectives of the program (Hernández-
Perlines, Moreno-García and Yañez-Araque 2016). This type of acquisition is
important for maintaining organizational structure. The major elements of acquisition
strategy are as follows:
i) Business Strategy: This particular strategy is required for addressing the
major contracting approach after inclusion of types of contracts and how competition
could be promoted as well as sustained for a business (Lee, Yoo and Kim 2016).
The respective product supporting consideration or leasing of arrangements are
possible with successful execution of business strategy.

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ii) Contracting Strategy: The second strategy in this particular scenario is
contracting strategy. According to this particular strategy, a proper analysis or
rationale of the contracting strategy is being provided. Moreover, the perfect usage
of various products like fruits and vegetables is needed after ensuring that they are
fresh and could be consumed by all customers.
iii) Sustainment: Acquisition strategy also ensures that the business is
providing sustainability and have been providing effective advantages or benefits
within the business processes (Madsen and Walker 2015). The entire organizational
performance is partly dependent on sustainment of the business and how well this
business is being obtaining competitive advantages.
Both Woolworths and Coles have Macro organics business resolving their
customer dissatisfaction regarding organic lines and delicatessen (Huo et al. 2014).
This is termed as one of the most effective acquisition strategy that had been opted
by Woolworths and Coles for gaining more competitive advantages.
2.5 Cooperative Strategy
This particular strategy is majorly being utilized in the advertising campaigns
by discrediting the organizational products or services (McGrath 2013). Such
strategies are extremely vital for those organizations, who are competing in market
and are highly saturated with customer options. For better maintenance of
competitive benefits, it is highly required to maintain a proper balance between
organizational goals and objectives. Cooperative strategies also play significant role
when the market is extremely competitive and also customers are being provided
with better products (Bereznoi 2015). Moreover, organizational strengths,

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weaknesses, opportunities and threats would be effectively enhanced without much
complexity.
This cooperative strategy refers to the planning strategy, where two and more
firms are working together for the core purpose of achieving a common objective.
Numerous organizations apply these cooperative strategies for incrementing the
profits through cooperation with any other organization, which is main competitor
(Bottery 2013). It even offers proper access to the new as well as wide market to the
companies and even the possibility to learn by cooperation. Woolworths understand
the wide situation, which a supermarket is facing and the customers would get
advantages from cooperative strategies. This particular firm even has added an
additional 58000 work hours to the system for making this cooperative strategy
successful in their business.
3. Conclusion
Therefore, from the above discussion, it can be concluded that competitive
strategies are extremely important and significant for helping a company to obtain
competitive advantages. It ensures that relative position of an organization is
completely dependent on these strategies and they are responsible for enhancing
profitability. The above provided report has clearly demonstrated about importance
of competitive strategies in Australian supermarkets like Coles and Woolworths.
Various aspects of competitive strategy like business strategy, sustainability,
corporate strategy, cooperative strategy as well as application of theories of strategy
development as well as implementation in Australian supermarkets are provided
here.

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References
Bereznoi, A., 2015. Business model innovation in corporate competitive
strategy. Problems of Economic Transition, 57(8), pp.14-33.
Bharadwaj, A., El Sawy, O.A., Pavlou, P.A. and Venkatraman, N., 2013. Digital
business strategy: toward a next generation of insights. MIS quarterly, pp.471-482.
Block, J.H., Kohn, K., Miller, D. and Ullrich, K., 2015. Necessity entrepreneurship
and competitive strategy. Small Business Economics, 44(1), pp.37-54.
Bottery, M., 2013. Professionals and policy: Management strategy in a competitive
world. Routledge.
Collett Miles, P., 2013. Competitive strategy: the link between service characteristics
and customer satisfaction. International Journal of Quality and Service
Sciences, 5(4), pp.395-414.
E. Armstrong, C., 2013. Competence or flexibility? Survival and growth implications
of competitive strategy preferences among small US businesses. Journal of Strategy
and Management, 6(4), pp.377-398.
Espino-Rodríguez, T.F. and Lai, P.C., 2014. Activity outsourcing and competitive
strategy in the hotel industry. The moderator role of asset specificity. International
Journal of Hospitality Management, 42, pp.9-19.
Hernández-Perlines, F., Moreno-García, J. and Yañez-Araque, B., 2016. The
mediating role of competitive strategy in international entrepreneurial
orientation. Journal of Business Research, 69(11), pp.5383-5389.