University Name: MGT704 Global Business Management Case Study

This case study analyzes the global retail industry, specifically focusing on the Australian market. It begins with an overview of the retail sector's significance, its growth potential, and its contribution to the Australian economy. The analysis highlights key companies such as Wesfarmers, Coles, and Woolworths, and provides a historical perspective on the industry's evolution. The core of the study applies Porter's Five Forces framework to assess the competitive landscape, examining the threats of new entrants, the bargaining power of suppliers and buyers, the threats of substitute products, and the rivalry among existing competitors. The study emphasizes the high competition and dynamism within the retail market and uses the framework to understand the strategic implications for major players like Woolworths. The conclusion underscores the importance of understanding market dynamics and adapting strategies for sustained success.

Running head: GLOBAL BUSINESS MANAGEMENT
GLOBAL BUSINESS MANAGEMENT
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Case Analysis
Summary of retail industry sector
The retail industry sector is considered to be the fifth largest in the world along with
huge growth potential and it accounts for 14-15% of the total GDP of the country (Bailey et
al. 2015). It comprises of the organized and the unorganized sector. It is considered to be the
fastest growing industry over the past few years. Australian retail industry market ranks the
highest on the world’s largest retailers. Within the borders of its own continent the retail
trading industry is the largest employer. It is estimated that at least 50% of the population has
been working in the retail market and considered it their career at some time (Bailey et al.
2015).
2. Domestic market sector
The retail industry of Australia is considered to be the most significant part of the
country’s economy. The large revenue of the Industry enables the country to rank to the
highest among the large companies in the entire globe (Balaji and Roy 2017). In the
Australian retail industry there are longer sales hours, the country has immense number of
specialty chains, they retail service providers offer direct customer service assistance and
most importantly there is a rapid growth of technological advancements in this sector. There
is increased productivity because of more timely date and better analysis. There is increased
number of hypermarkets and supermarkets along with the international expansion of the
Australian based retailers (Pantano et al. 2017).

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3. Major Companies
The Wesfarmers, Coles and Woolworths Pvt. Ltd. are some of the major companies in
the retail market sector in Australia. It offers convenience forecourt store, discount
department stores, electronics speciality and other speciality supermarkets. There is a 3.9
percent of the annual growth in the departmental stores, supermarkets and grocery stores.
There are around 11% of the Australians employed worked only part time in the retail market
sector. The wages earned in the retail sector in Australia is around $ 60 billion (Pantano et al.
2017). These statistics reveal the importance of the retailing in Australia.
4. History
It has been analyzed that there are around 47% of the country’s retail trade (Richards
et al. 2013). Since 1950s they has been significant causes for reshaping the Australian cities
and the developments of the retail market sector has enabled the country and its citizens to
engage with in a semi regular or on regular basis. There are patterns of development which
varied across the nation as per the changes in the local conditions including the demography
and the market size (Richards et al. 2013).
5. Rationale for selecting retail market sector
The retail industry sector is growing at a faster rate and the majority of the population
is working in the retail sector. The retail industry has a brighter scope and chances for making
a career in the future. There is a growth in the retail market sector along with international
expansion. This is a particular area of interest. Presently the retail market is a big trend at
every place and it can be started at a minimum cost and it is considered to be profitable in the
long run. Hence retail industry is all about worthy business for the future.

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6. External Framework – Market based view
a) Porters five force analysis – Introduction to framework
The porters five force analysis is a tool that uses the five forces in the industry to
determine the level of competition present in an industry and its influence on profitability. It
helps to determine the structure of the industry and the level of competition that is prevailing
in the market place (Dobbs 2014). By analysing the five forces of industry, the company can
analyze the profitability and suitability of the business. Any industry which has low barriers
to entry but has few buyers and suppliers and has lots of substituted products in the prevailing
market with high level of competitors in the market, it can be analyzed that the industry can
be highly competitive, however, it will be less attractive for the business because of the low
level of profitability in that particular market. Therefore, before entering in any market, the
company needs to evaluate the competitive position of the company in the particular market
industry and identify the internal strengths and weakness which is essential for strengthening
the position in the market (Dobbs 2014). This tool is implemented and is useful for
formulating the strategy of the company as it reveals the powerful five forces in the retail
industry.
b) Application of Porters five force analysis
Threat of new entrants: The threat of new entrants is high in the retailing sector; it brings in
innovation and newer ways of doing things. Therefore, major companies like Woolworths
limited has pressure and needs to implement a lower pricing strategy, reduce the cost and
provide better proposition to the customers (Dobbs 2014).
Bargaining power of suppliers: The suppliers in the retail industry have a dominant position
in the market and therefore it can reduce the profit margin of major companies like

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Woolworths limited and Coles. The higher supplier bargaining power can reduce the
profitability of the firms.
Bargaining power of Buyers: The buyers and the consumer have a high bargaining power and
often they demand a lot. This pressurizes the major companies like Woolworths limited in the
long run, as providing discounts and offers lowers the profitability of these companies
(Dälken 2014). The consumers increasingly seek of offers and additional discounts.
Threats of Substitute products or services: The profitability of the industry suffers when there
is a new and innovative product in the market. There is a high threat of substitute product or
service present in the market. The substitute products offer value proposition that is
innovative and unique from the other products in the markets (Dobbs 2014). Therefore,
Woolworths needs to understand the core need of the customer and increase the switching
cost.
Rivalry among the existing competitors: there is intense competition present in the market
and intense rivalry among the existing players and decrease the overall profitability in the
industry (Dobbs 2014). The major company like Woolworths limited operates in a highly
competitive market industry hence it adversely affects the profitability of the company.

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List of references
Bailey, J., Price, R., Pyman, A. and Parker, J., 2015. Union power in retail: Contrasting cases
in Australia and New Zealand. New Zealand Journal of Employment Relations, 40(1), p.1.
Balaji, M.S. and Roy, S.K., 2017. Value co-creation with Internet of things technology in the
retail industry. Journal of Marketing Management, 33(1-2), pp.7-31.
Dälken, F., 2014. Are Porter’s five competitive forces still applicable? A critical examination
concerning the relevance for today’s business (Bachelor's thesis, University of Twente).
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), pp.32-45.
Pantano, E., Priporas, C.V., Sorace, S. and Iazzolino, G., 2017. Does innovation-orientation
lead to retail industry growth? Empirical evidence from patent analysis. Journal of Retailing
and Consumer Services, 34, pp.88-94.
Peres, I.T., Repolho, H.M., Martinelli, R. and Monteiro, N.J., 2017. Optimization in
inventory-routing problem with planned transshipment: A case study in the retail
industry. International Journal of Production Economics, 193, pp.748-756.
Richards, C., Bjørkhaug, H., Lawrence, G. and Hickman, E., 2013. Retailer-driven
agricultural restructuring—Australia, the UK and Norway in comparison. Agriculture and
human values, 30(2), pp.235-245.
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.

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You, K. and Barry, M., 2016. Intra-industry competition among employer associations: a case
study of the retail sector. Labour & Industry: a journal of the social and economic relations
of work, 26(2), pp.120-137.