Market Analysis Report: Coles Supermarkets' Entry into Japan

This report provides a comprehensive market analysis for Coles Supermarkets, an Australian retail company, considering an expansion into the Japanese market. It explores specific market opportunities, business factors (political, economic, social, technological, legal, and environmental), and the competitive landscape, including key players like Ito-Yokado, Uny, Daiei, and AEON retail. The analysis includes customer segmentation (demographic, psychographic, and geographic) to understand consumer preferences and behaviors in Japan. Furthermore, the report details Coles' organizational strengths and weaknesses, culminating in a SWOT analysis to identify potential opportunities and threats in the Japanese market. The study suggests that with thorough market research and strategic adaptation, Coles can successfully enter and operate in Japan, leveraging its competitive advantages like price-based marketing and technological integration.

Running head: MARKET ANALYSIS FOR COLES
MARKET ANALYSIS FOR COLES
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1MARKET ANALYSIS FOR COLES
Executive summary
This report aims to discuss the potentiality of the Japanese market in the perspective of
foreign investment. The report therefore has discussed the available opportunities in this
market, the environment of the country in support of business and competitive analysis to
understand the need of the market. Through segmentation of the consumers, this report has
detailed the preferences of the customers in Japan. These will be helpful for Coles
Supermarket, an Australian retail company in case they enter this country. Through all these
analyses, the company will be able to understand the scopes of their business in this country.

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Table of Contents
Introduction:...............................................................................................................................3
Specific market opportunity in Japanese market.......................................................................3
Business factors..........................................................................................................................4
Market Analysis.........................................................................................................................5
Competitive Analysis.................................................................................................................6
Organizational Analysis:............................................................................................................7
SWOT analysis:.........................................................................................................................7
Conclusion:................................................................................................................................9

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Introduction:
This report aims to discuss the opportunities that the companies try to find in a new
country before entering. In this respect, the report has analyzed the market of Japan where the
retail company Coles will be entering from Australia. There are some specific market
opportunities present in every market which help the companies to grow accordingly. This
report has discussed these specific market opportunities in Japanese market, the political,
economic, social, technological, legal and environmental factors which give the companies
scope to understand the needs of the environment of the market. This report has also
discussed Japanese retail market in the section market analysis where the customer segments
or profiles have been discussed in relation to the market, size and growth rates. The
competitive Analysis of Coles have discussed the potential competitors present in the market
of Japan their competitive advantage. Organizational Analysis contains the operation of Coles
in the Australian market. This report concludes with the SWOT Analysis of this company so
that the company must know the scopes for their improvement. From this analysis it can be
concluded that Coles Supermarkets will be able to enter the market of Japan and operate their
successfully if they do proper market research of this country.
Specific market opportunity in Japanese market
The first and foremost reason of entering the Japanese market is its highly educated
workforce which mainly attract the business all around the world. His is closely related to the
Japan’s reputation in incorporating technological advancement in all their business. Secondly,
the Japanese market is considered to be the getaway of Asian market hence by entering this
market the company can be able to realize the pattern of business and expectation of the
customers. Thirdly, Japanese customers lead a high stared life like all other developed
countries. Therefore, the customers prefer shooing from the convenience store. The people of

4MARKET ANALYSIS FOR COLES
Japan have a strong work ethic that can be seen in the employees. This can be utilized by
Coles as their market opportunity in operating in Japan.
Business factors
Political aspects: Japan has a stable political system with monarchy. However, the king is
regarded as the symbol and five political parties have a strong influence on the political and
administration of the country. The aim of the political parties is to enhance the business
growth of the country hence they surely change the economic and administrative laws in
favor of business. Japan is associated with ASEAN and G8 hence have a powerful impact of
the natural resources relating oil, gas and other marine resources.
Economic factors: the economy of the country is quite strong an s it is in the top of the list of
largest economy of the world. The economic factors include the tax policies, interest rates,
exchange rates and inflation rate. Japan's real GDP was more than JPY 521794.30 billion in
2016 but the nominal GDP was more or less JPY 537289.40 billion. Per capita GDP of this
country was estimated USD 38917.29 and the purchasing power parity (PPP) based per capita
GDP estimated at USD 41274.61 (Data.worldbank.org, 2018). Exchange rates of this country
affect costs of exporting goods, the supply and price of imported goods in an economy.
Social factors: the country has a huge population which is more than 125 million. The culture
of Japan has a sharp contrast with that of Australia. The career attitude of the people is much
more advanced than other Asian countries (Warnick, Bojanic & Xu, 2015). This trend facts
the workforce of the country and develop them to be more skilled and efficient at any sector.
The population growth rate, emphasis of safety and age distribution determines the needs of
the people and as mentioned before, the Japanese people spend a high standard life.
Therefore, this company needs to understand these facets of customer expectational Nd
satisfaction.

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Technological factors: this includes the proficient use of automation, rate of technological
hangs and R&D activities conducted in the country (Kassem, & Succar, 2017). Japan in this
aspect the most active state that incorporate highly efficient machines in every sector of
business. The government provides all types of facilities in relation to the technological. By
entering this country Coles will be able to take the benefits of automation in their sector in
one hand and learn technological developmental skills to apply those in their other branches
in other countries.
Legal factors: the labor and corporate laws of the country are based on the European systems
which can be beneficial for the company as it has legal experiences wile dealing in Australia.
This country has a strict nature when it comes in the aspect of employee protection. In Japan
it is mandatory that the contract laws bear proper and clear information about minimum wage
and working hours (Zhu et al., 2016). The consumer law is also strict as the Japanese are
concerned about good quality of products in lowest price. These factors directly affect the
operation of Coles and the cost and demand of its products.
Environmental factors: the laws associate with the protection of the environment are quite
strict as the government of Japan stresses on mitigating the issues related to climate change
and destruction of the national resources. These environmental laws are to be understood and
supported as the country aims to attain sustainable development and maintain it.
Market Analysis
For entering the market of a foreign country, it is highly important to know its people.
This is due to the reason that the company has different experience in dealing with the
national culture of that particular country which may not be similar to he country where it is
entering. In case of Coles, the cultural and social differences are huge as these are different in
Australia from Japan. It is important as these factors change the mentality of the people

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whom to country will be employing in their workforce. This is also important to understand
the needs of the customers and their preferences.
There are three types of segmentation, demographic, psychographic and geographic
(Alt & Iversen, 2017). As the company aims to provide its products in the affordable ranges
so that large number of people will be able to purchase. Hence, this can be said that in the
demographic segmentation, it has targeted the middle class and lower middle-class people. In
the case of geographic segmentation, it has been identified that company aims to increase its
rate of profitability from japan, therefore, depending on the availability of target market and
connectivity the geographic segmentation, urban area has been selected (Ward & Rustow,
2015). It is relevant for the organization named Coles because the popularity of supermarket
is quite higher in the urban areas as large numbers of customers can be attracted easily.
Depending on the psychographic segmentation, the interest of people has been highlighted.
As the company provides different discount offers and reward points, therefore, the people
who have interest in such things (Starr & Dawisha, 2015). Another way, it can be said that
with the increasing population and economic growth, japan has become one of the
remarkable economically stable country. Therefore, the market size of the company will be
large. The company will be able to grab the attention of large number of customers.
Competitive Analysis
Japan stands second in the retail market of the world with more than 120 million
consumers presently buying. These consumers prefer to have a high-quality product with
excellent services. The people of this country have a high preference for the wester products
and though China is doing well in this sector, Japan accounts for 55% of whole Asian retail
market. In terms of food self-sufficiency this country does not show any progress hence
depends on the food import to meet the demand (Lockwood, 2015). This is the reason, the

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retain grocery industry is not much concentrated in the country. However, there are
competition among the companies like Ito-Yokado, Uny. Daiei and AEON retail. Moreover,
the recent reports have pointed out that the number of retail stores in the market has been
declining. The Japanese customers show less interest in shopping in the large shopping sprees
and more preference in the convenience stores. Hence it can be stated that Coles will have
great opportunity if it decides to enter the Japanese market.
Organizational Analysis:
The main competitive advantage of Coles Supermarkets is associated with the price-
based marketing strategy (Coles.com.au, 2018). In this regard, the company aims to garb the
market by redoing price than the competitors. In case Coles entre remarket of Japan, it can
expand its business fully as it will keep the price of their products as well as services cu
cheaper than the other. This approach will be affective in the Japanese market because these
consumers know how to value the high-quality product (Ishida, 2015). In addition to this, the
company will also increase the presence in the market through utilizing technological
advancement in automating its services in the stores. This will reduce the cost of the
employees and work will be done more accurately (Hanley & Yamamura, 2015). The
transportation system of this country is high which will help the company to manage its
supply chain in Japan. By successfully managing all these aspects Coles will be able to get
competitive advantage over the competitors in the Japanese market.
SWOT analysis:
Strengths:
 This company has a history of service in the Australian market for more than a
century and command over domestic food and liquor market.

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 Coles’ strategy of advertising as well as branding is unmatchable in the retail
space of Australia. It has huge TV sponsorship which effectively approach the
price conscious buyers.
 The pricing strategy of this company is highly effective as this brings frequent
changes in the price listing to attract the buyers
 This company has various types if generic brands which will intend to serve
specific types of buyers.
 The consumers have advantages to take benefit of impressive online order.
Weakness:
 The competition in the retail industry is quite high in the Australian market for
which the company feels threatened.
 Negative publicity has hurt the public sentiment about this company
Opportunities:
 This company is able to grab a greater control over the supply chain and
funnel harvest profits and production at different points
 It can cope up with the geographic expansion over the neighbor countries or
the countries of Asia where there is a low concentration in the market. This is
due to the fact that this company possess versatility in this sector
 More sponsorship and effective marketing strategy can help the company to
expand markets in different region.
Threats:
 Immense competition can pressurize the company to sale products in
extremely low marines.

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 Different generic brands create confusion among the consumers and they
cannot understand due to lack of a clear distinctive communication for each.
 Due to their convenience, the percentage of buyers may opt for the
independents as well as comparatively smaller retailers like green grocers and
the butchers.
Conclusion:
Therefore, it can be concluded that the market situation of Japan is really very
favorable for any retail come to entre. The government and economy provide huge scope for
doing nosiness in this region. The consumer concentration is high in this country and it is the
third largest market in the world. The legislations and tax facilities which actually attract the
investors, are flexible and sportive of business. The actual aim of the government is to grow
the country’s GDP in all possible ways hence create a favorable ambience within the country.
The employees in this country are highly skilled and competitive which benefits the comedies
working in this culture. The preference or tastes of the customers though have high standard
but value the potentiality of the services and quality of the products. This is the reasin why if
Coles Supermarkets from Australia aims to enter this market will be benefitted to expand
their business with less effort. By utilizing every opportunity and strengthens this company
can limit its threats and enhance profits in Japan.

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References:
Alt, J., & Iversen, T. (2017). Inequality, labor market segmentation, and preferences for
redistribution. American Journal of Political Science, 61(1), 21-36.
Coles.com.au. (2018). Coles Supermarkets. [online] Available
at: https://www.coles.com.au/ [Accessed 5 Aug. 2018].
Ward, R. E., & Rustow, D. A. (Eds.). (2015). Political modernization in Japan and
Turkey. Princeton University Press.
Data.worldbank.org. (2018). Japan | Data. Retrieved from
https://data.worldbank.org/country/Japan
Hanley, S. B., & Yamamura, K. (2015). Economic and demographic change in preindustrial
Japan, 1600-1868. Princeton University Press.
Ishida, H. (2015). The effect of ICT development on economic growth and energy
consumption in Japan. Telematics and Informatics, 32(1), 79-88.
Kassem, M., & Succar, B. (2017). Macro BIM adoption: Comparative market analysis.
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Lockwood, W. W. (2015). Economic Development of Japan. Princeton University Press.
Starr, S. F., & Dawisha, K. (2015). The International Politics of Eurasia: v. 4: The Making of
Foreign Policy in Russia and the New States of Eurasia. Routledge.
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refine measurements for economic impact analysis of special events. Journal of
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