Case Study Analysis: Organizational Development at Coles Group Limited

This case study analyzes the organizational development of Coles Group Limited, an Australian retail giant. The study begins with an overview of Coles, detailing its operations in the supermarket, convenience store, and liquor segments, and its position in the competitive Australian market. It then identifies key challenges faced by Coles, including intense competition from Woolworths, Aldi, and Costco; uncertainties related to profitability and the relationship with Wesfarmers; difficulties in managing and generating sales from its online segment; and the fluctuating nature of the retail market. A SWOT analysis is conducted, highlighting Coles' strengths such as its market share and customer satisfaction, and weaknesses, including marketing and technology. Opportunities like expanding the target segment and using technology are identified, alongside threats such as competition and labor shortages. Finally, the study provides recommendations for Coles, focusing on the use of technology, market development strategies, and acquiring efficient human resources to overcome challenges and enhance its market position and organizational performance. The analysis is supported by relevant references.

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Contents
Introduction......................................................................................................................................2
Overview of the Company...............................................................................................................2
Challenges faced by Coles...............................................................................................................3
SWOT Analysis...............................................................................................................................4
Conclusion.......................................................................................................................................5
Recommendations............................................................................................................................6
References........................................................................................................................................7
References........................................................................................................................................9

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Introduction
Organizational development refers to the process of developing the organization with the aim to
increase the competence of the business. It is important for every business to successfully
develop the organization so as to increase its performance. Change is only constant aspect
present in the environment, it is important for the organization to implement organizational
development so as to adopt change and progressively grow (Fels, and Lees 2018). Below
mentioned paper highlights details about the company Coles and the challenges faced by the
organization while working in the business environment. External as well as internal analysis of
the company is conducted to evaluate the position of the business and how they can overcome
such issues in the environment.
Overview of the Company
Coles Group Limited is an Australian based organization that operates the business in the retail
industry. The company sell different kinds of products including fresh food, fuel, toiletries,
household goods, groceries etc. The company manages to operate its business in three different
segments that are Coles Convenience store, Coles supermarket and Coles Liquor. The
supermarket of the company offered varied products mentioned above and the online
supermarket segment of the organization offer financial services to the customers in the business
environment. The company Coles is Australia’s second largest retailer that is behind Woolworths
after which Wesfarmers acquired the company with the transfer of ownership in the year 2007.
The CEO of the company is Steven Cain who works to increase the profitability of the company
in the market. The Australian public company deals in both products and services in the business
environment (Coles 2019).
The company works with a total number of 165000 employees in the market and is
headquartered in Victoria, Australia. First variety store of the company was opened in the year
1914 at Melbourne and more chain stores were subsequently opened within a short span of time.
The Coles Group Limited was turned off from the Wesfarmers group in the year 2018, the
company was again listed as public company ASX with the trading name of ASX COL, debuting
at Australian $ 12.49 (Sutton-Brady, Kamvounias, and Taylor 2015). The company has 806

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supermarket stores, 894 liquor stores and 712 express outlets in the external market. The
company Wesfarmers hold 15% of the total stake of the Coles Group in the market. The liquor
chain store of the company Vintage Cellar is oriented with fine wines and breweries. Further, it
should be noted that the Coles Group was formerly known as Coles Myers which was then
acquired by the Wesfarmers group in the company. Woolworths is the biggest competitor of
Coles in the supermarket industry. The company taking all initiatives in the environment to attain
the trust of the people and increase their customer base as well (Mortimer 2017).
Challenges faced by Coles
High degree of Competition: This fact in known to all people present in Australian supermarket
industry that there is prevalence of cut throat competition between Coles and Woolworths in the
external environment. Both Woolworths and Coles share retail industry however it is believed
that Woolworths has attained major customer segment in the market. Resulting in which, the
competence of the company reduces with such competitive actions taken in the environment. The
company is unable to grow against competition in the market as actions preformed and products
served by both the companies are almost similar (Price 2016). Further, it should also be noted
that with the entrance of Costco and Aldi in the retail market has extensively affected the sales of
the company, as now the company needs to compete with such discounted stores as well apart
from Woolworths.
Uncertain Future: the level of profitability of the company keeps on fluctuating, apart from
which relationship between Coles and Wesfarmers is not solid. Due to which the customers have
started getting trust issues before investing in the company. The company Wesfarmers demerged
the supermarket division of the company and then relisted it as a separate entity in the business
environment (Grimmer 2018). Due to which, concentration of the Wesfarmers group shifted
from Coles to other segments of the group. Resulting in which, the customers started having trust
issues in the activities of the company. Thus, it should be noted that it is a challenge to initially
maintain the pace of the company and attain the trust of the customers back in the business
(Booth, and Coveney 2015).
Difficulty in managing sales online: the company has managed to create a new online segment to
implement sales in the environment but they are struggling manage the online activities. The

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company is facing difficulty in managing the technical aspect of the online segment. Instead of
satisfying the customers to the maximum extent, the online segment of the company has started
to reduce the satisfaction of the customers in the business environment. There is low proportion
of sales that is attained from the online segment and high proportion of expenses that are
incurred for them. Only two per cent of the total grocery sales of the company are conducted
online that can express that the business is not even able to roll off the expenses from the revenue
amount (Grimmer 2017).
Swinging Retail Market: Lastly, it should be noted that the retail market is itself swinging into
different places. The prices of different goods have started to rise in the market due to which the
level of profitability of the company has started to reduce. The sales growth of the complete
industry is trending in the lower direction and there is inflation in food prices as well, resulting in
which the wage rate has also started to decline. Thus, it should be noted that the external
environment challenges are affecting the growth of the business (Pulker.., et. al., 2018).
SWOT Analysis
Strength: The company has attained a greater amount of market share in the Australian
supermarket industry along with Woolworths. These two are the key players present in the
industry. Further, it should be noted that Coles attain optimum returns on the capital expenditure
as well. The company successfully executes new projects and generate good amount of profits in
the environment by creating new revenue streams.
The company provide high level of satisfaction to the customers in the environment that acts a
bonus for them to increase the profitability of the business. Good customer services increases the
trust of the customers in the company and it also develops an effective relationship in the
business environment. The company holds strong brand portfolio that helps them to expand the
scope of business effectively (Xu, and Lee 2019).
Weakness: The poor marketing services of the company reduce its efficiency to grow in the
business environment. Although the products offered by the company hold high quality but still
ineffective marketing strategies of the business reduces the USP of the company.

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Further, it should be noted that the company needs to invest more in the technology segment so
as to effectively operate the online strategies in the business environment. The online website of
Coles is the inefficient that reduces the competence of the company to grow in external
environment (Phillipov 2016).
Opportunity: The Company Coles hold the opportunity to establish the business attracting wider
target segment in the market. Coles is present in retail industry that has a wider target segment
than other industries present in the environment. People require to purchase such good on a
regular basis, resulting in which the company holds the opportunity to target a wider group of
people in the market.
The company can effectively make use of technology to grow in the business environment. Use
of technology can help the business to effectively operate the online sales in the market.
Technology factor can help the business to increase the revenue from the online market. The
company also holds the opportunity to extend scope of business in diverse market and build the
brand reputation of Coles as well (Carey, Parker, and Scrinis 2017).
Threats: High degree of competition is the biggest threat of the company in the business
environment. The company is struck in the market where slight change in the business model can
highly affect the sales of the company.
New technologies used by competitors are also reducing the efficiency of the company in the
business environment. Coles does not have effective standards to attain productivity using
technology in the environment.
Shortage of skilled and efficient labour is hampering the productivity of the company in the
business environment. It is important for the organization to attain efficient employees in the
business who can share the business’s vision with them (Devin, and Richards 2018).
Conclusion
Thus, by concluding the above mentioned statements the fact should be concluded that the report
detailed about the company Coles supermarket present in Australia. During its course of action,
the business is facing several issues in the business environment. Challenges faced by the

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company are highlighted in the paper along with the SWOT analysis of the company. Thus, it is
recommended to the organization that they should make use of people mentioned strategies in
the environment to grow and eliminate the issues from business.
Recommendations
Below mentioned are the recommendations given for Coles so as to grow and achieve growth in
the industry:
Use of Technology: it is important for the business to make use of technology in order to grow
and succeed in the environment. This resource will help the organization to attain sales from the
online market as well. The company is attaining only 2% of total sales from online so that aspect
will increase the satisfaction of the clients and will persuade them to initiate sales online as well.
Market Development Strategies: The Company should focus on expanding the scope of business
into diverse locations so as to increase the revenue in the environment. This aspect will help the
business to rise above competition by increasing the sales into different markets (Munir, and
Terry 2018). The company is aim to make use of market development strategy so as to increase
the level of sales in the market. The company should capture more people using the geographic
locations. This will help them to eliminate the level of competition and mitigate the risk factors
as well.
Attain Efficient Human Resource: the company should adequate skilled human resource who can
help them to build the organization and attain vision in the environment. The efficient and
experienced employees of the company will help them to successfully achieve growth and attain
competitive advantage in the market.

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References
Booth, S. and Coveney, J., 2015. ‘Big Food’—The Industrial Food System. In Food
Democracy (pp. 3-11). Springer, Singapore.
Carey, R., Parker, C. and Scrinis, G., 2017. Capturing the meaning of “free range”: The contest
between producers, supermarkets and consumers for the higher welfare egg label in
Australia. Journal of rural studies, 54, pp.266-275.
Coles., (2019) About Coles [online]. Available from < https://www.coles.com.au/about-coles >
[Accessed from 22 August 2019].
Devin, B. and Richards, C., 2018. Food waste, power, and corporate social responsibility in the
Australian food supply chain. Journal of Business Ethics, 150(1), pp.199-210.
Fels, A. and Lees, M., 2018. Unconscionable conduct in the context of competition law with
special reference to retailer/supplier relationships within Australia. In Abusive Practices in
Competition Law. Edward Elgar Publishing.
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.
Grimmer, L., 2018. The diminished stakeholder: Examining the relationship between suppliers
and supermarkets in the Australian grocery industry. Journal of Consumer Behaviour, 17(1),
pp.e13-e20.
Mortimer, G., 2017. Why Australian supermarkets continue to look to the UK for leadership. The
Conversation, (20).
Munir, R. and Terry, C., 2018. Accountants and the Ethics of Profit: The Case of the Australian
Retail Industry. Journal of business ethics education, 15, pp.327-348.
Phillipov, M., 2016. ‘Helping Australia Grow’: supermarkets, television cooking shows, and the
strategic manufacture of consumer trust. Agriculture and human values, 33(3), pp.587-596.

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Price, R., 2016. Controlling routine front line service workers: An Australian retail supermarket
case. Work, employment and society, 30(6), pp.915-931.
Pulker, C.E., Trapp, G.S.A., Scott, J.A. and Pollard, C.M., 2018. What are the position and
power of supermarkets in the Australian food system, and the implications for public health? A
systematic scoping review. Obesity reviews, 19(2), pp.198-218.
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.
Xu, E. and Lee, T., 2019. Supermarket magazines and foodscape mediation in
Australia. Communication Research and Practice, pp.1-14.

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References