Strategic Innovation and Business Development for Coles Group

This report provides a strategic assessment of Coles Group's potential for business development through online marketing, focusing on expanding its reach to New Zealand. It identifies the problem of declining market share in the face of competition from Woolworths and other retailers, emphasizing the importance of innovation. The report analyzes the benefits of an extensive online marketing strategy, including increased sales, widened customer base, and enhanced government revenue. It recommends utilizing platforms like YouTube and Facebook, considering the usage habits of the target audience. The analysis includes strategic options, stakeholder identification, and an evaluation of social, environmental, and economic impacts, alongside financial analysis and risk assessment. The report concludes with a deliverability assessment, including implementation strategies and a proposed schedule for the recommended online marketing approach.

Running Head: Strategic Innovation and Business Development 1
Strategic Innovation and Business Development
Name
Institution
Date

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Executive Summary
Online marketing is a powerful tool that can help a business to realize desirable outcomes from
its undertakings over a long period of time. The above tool is vital in widening the market for a
company’s products and services because of the easily accessible and convenient online
platforms. In regards to Coles Group, implementation of an online marketing strategy will help it
to widen its base by attracting potential clients from New Zealand. Currently, Coles operates
only within Australia and so adoption of an extensive online marketing strategy will help to
expand its operations abroad particularly New Zealand. Moreover, Coles has failed to overpower
Woolworths in the retail industry due to the fact that Woolworths operates both within and
outside Australia. As such, implementation of an extensive online marketing technique is likely
to widen Coles’ customer base, sales and profits both in the short run and long run. The report is
directed to the management team at Coles Group to adopt online marketing by devoting all the
necessary resources like finances and labor to ensure that all the associated benefits of the project
can be realized. In spite of the risks that are associated with the project, proper coordination and
collaboration during execution of the processes among the implementation team will minimize
the project risks.

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Table of contents
Contents
Executive Summary.....................................................................................................................................2
Table of contents.........................................................................................................................................3
1. Problem...................................................................................................................................................5
1.1 Background.......................................................................................................................................5
1.2 Definition..........................................................................................................................................5
1.3 Evidence............................................................................................................................................5
1.4 Timing...............................................................................................................................................6
1.5 Context..............................................................................................................................................6
2 Benefits....................................................................................................................................................7
2.1 Benefits..............................................................................................................................................7
2.2 Importance of the benefits to Government.........................................................................................7
2.3 Evidence of benefit delivery........................................................................................................7
2.4 Interdependencies..............................................................................................................................7
3. Strategy...................................................................................................................................................8
3.1 Approach...........................................................................................................................................8
3.2 Strategic options................................................................................................................................8
3.3 Recommended strategy......................................................................................................................9
4 Options analysis.....................................................................................................................................10
4.1 Project options considered...............................................................................................................10
4.2 Stakeholder identification and consultation.....................................................................................10
4.3 Social impacts..................................................................................................................................11
4.4 Environmental impacts....................................................................................................................11
4.5 Economic impacts............................................................................................................................12
4.6 Financial analysis............................................................................................................................12
4.7 Risks................................................................................................................................................13
5 Deliverability of recommendation..........................................................................................................14
5.1 Recommendation.............................................................................................................................14
5.2 Implementation................................................................................................................................14

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5.3 Management....................................................................................................................................14
5.4 Schedule..........................................................................................................................................15
Business canvas model..........................................................................................................................15
Value proposition canvas.......................................................................................................................16
References.................................................................................................................................................17
Appendix...................................................................................................................................................19

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1. Problem
1.1 Background
Innovation is an element that can help a business entity to flourish from its undertaking due to
the fact that it makes complicated processes easier, cheaper and accessible by the target audience
(Hughes et al., 2018). An organization may engage in an innovative approach to sustain its
competitiveness in the market through enhancing the quality and promoting its products and
services (Micael, 2010).
1.2 Definition
Online marketing is one of the major techniques that are being used by firms within Australia as
a way of promoting their product and services through bridging information gaps among the
target audiences. In such a case, the target audiences are able to access information about
available and new products and services of a company that engages in online marketing so as to
make their final purchase decisions (Micael, 2010).
1.3 Evidence
A multiple of rival companies in retailing industry of Australia like Woolworths, Coles, IGA,
and Aldi are making use of online marketing as a way of boosting their competitive advantage.
Due to competition, Coles Group which is Australia’s second biggest retail firm behind
Woolworths experienced a decline in its market share from 29.2% to 27.6%. In order to
rejuvenate its competitiveness and market share against its rivals, it would be necessary for Coles
to also attract clients from outside Australia through extensive online marketing approach.
Moreover, Woolworths Group has been able to maintain a large market share (34.0%) in the
retail industry due to an effective online marketing which has attracted client both within and
outside Australia (Statista.com, 2019). Therefore, management at Coles should undertake

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extensive online marketing strategy for enhancing its market share and competitiveness in the in
the retail industry.
Figure 1: A graph showing the total grocery market in terms of the percentage market share of
2017 and 2018
Source: (Statista.com, 2019).
1.4 Timing
Due to the fact that Australia's retail industry is shifting from oligopolistic market structure to
perfect competition, there is likelihood that the number of entrant into the industry will continue
increasing over time. Management at Coles will thus need to establish a sound reputation of its
firm so that its market share can be maintained over time (Claire, 2012).
1.5 Context
The entry of rival firms like Aldi and IGA into the retail industry is posing a series threat to
Coles Group as far as market share is concerned. As seen from the above graph, Aldi is
increasingly becoming competitive in the retail industry due to increase in market share from
10.9% to 11.4% over 2017 and 2018 periods. From this point of view, it would be necessary for
management at Coles to undertake extensive online market as an innovative approach for
boosting and sustaining its market share (Dorie, 2012).

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2 Benefits
2.1 Benefits
Extensive online marketing is likely to management at Coles to realize increases in sales due to
widened customer base. For example, the customer base will be widened through attraction of
new and potential clients from outside Australia say from New Zealand through extensive online
marketing (Christensen and Duncan, 2016). Therefore, Coles is likely to realize improvements in
its profit margins and market share due to widened sales and customer base respectively.
2.2 Importance of the benefits to Government
Government is likely to reap significantly high revenues through taxation on Coles Group’s
widened undertakings within and Outside Australia. These additional revenues attained by
government from Coles will help to boost its economic growth and development by investing it
into other development projects like infrastructure (Sakas and Kavoura, 2015).
2.3 Evidence of benefit delivery
Measures of benefit delivery will be in form of attraction of new clients, increased sales and
profits. The main key performance indicators to the above measures will be online traffic
sources, brand awareness and return on investments. Online traffic sources will help to indicate
the effectiveness of Coles Group’s website in building and finding out experience of new clients.
Brand awareness indicator will help to reveal the knowhow of the target audience about Coles’
products and services that will be depicted in form of increases in sales (Green, 2013). Also,
return on investment will basically measure the capability of extensive online marketing in
delivering desirable profits to Coles (Parmenter, 2011).
2.4 Interdependencies
High prospects of new entrants into Australia's retail industry should be basic factor of
consideration by Coles' management due to the fact that the industry is transforming to a perfect

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competition market structure. However, changes in macroeconomic indicators like inflation and
unemployment should also be considered by management at Coles (Parmenter, 2011).
3. Strategy
3.1 Approach
Management should consider features that define habits of the target audience when it comes to
making use of the multiple online platforms. Some of the online platforms that can be used by
Coles to market its products and services outside Australia include; YouTube, Pinterest, Google-,
Facebook, Instagram, Twitter, LinkedIn, SnapChat, WeChat and Whats App among others
(Edison, Ali, & Torkar, 2013). The target audience for this innovation approach is New Zealand
so management at Coles will need to consider the frequency of usage of online platforms in New
Zealand so as to allocate its resources effectively (Chaffey and Ellis-Chadwick, 2012).
3.2 Strategic options
Strategic options will basically involve considering the frequency of usage of online platforms
for making of purchase decisions by potential clients outside Australia particularly New Zealand.
Below is a figure indicating the most widely used online platforms in New Zealand.

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Source: Statista 2019
From the above graph, it is evident that management at Coles should prioritize YouTube,
Facebook, Instagram, Pinterest, Google-, LinkedIn, and Twitter for undertaking its extensive
online marketing for its products. The above strategic option exclusion of SnapChat, WeChat
and Whats App as ways for conducting online marketing in New Zealand because they are not
some paramount (Statista.com, 2019). Among the seven feasible online platforms, Coles’
management should devote much focus and resources on the use of YouTube and Facebook as
they are the most frequently used online platforms in New Zealand.
3.3 Recommended strategy
This report recommends Coles to continue making use of its existing online marketing platforms
like websites as a complement to use of YouTube, Facebook, Instagram, Pinterest, Google-,
LinkedIn, and Twitter for its target audience (Sakas and Kavoura, 2015).

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4 Options analysis
Just like any other innovative investment, management at Coles would prefer to incur less
operational costs of undertaking extensive online marketing aimed at attracting potential clients
from New Zealand. Among all the online platforms, Coles should make use of YouTube and
Facebook as part of cost saving technique because they are the most used platforms in New
Zealand. In such a case, available resources like human resource, finances, and information
technology personnel will be effectively used to undertake online marketing due to exclusion of
less effective platforms like SnapChat or Whats App. Due to the fact that the report is targeting
potential clients from New Zealand, online marketing platforms like SnapChat, Whats App and
WeChat can continue to be used to target potential clients within Australia (Sakas and Kavoura,
2015).
4.1 Project options considered
A direct method was used to select the above project options for conducting extensive online
marketing for Coles to attract potential clients from New Zealand. The above methods involved
identifying already established and frequently used online platforms that are being used by the
target audience. They include; YouTube, Facebook, Instagram, Pinterest, Google-, LinkedIn, and
Twitter which are mostly used by persons aged 18 and above years. Among the above available
options, the report informs Coles’ management to focus on using YouTube and Facebook
because they are likely to attract huge number of potential clients in a short period of time (Sakas
and Kavoura, 2015).
4.2 Stakeholder identification and consultation
The table below shows the stakeholders and position in regards to implementation of the project
Personnel Responsibility
Management Team Provides necessary resources like labor and

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finances for execution of project activities and
processes
Information Technology Specialist Creates, maintains and updates the software
system for Coles’ online marketing initiative
Project Manager Coordinates and controls all the resources that
will be used in executing project activities
from the start to the end.
Consultant Offers professional advice and guidance on the
project processes
4.3 Social impacts
The project will help Coles to create and maintain relationship with its clients outside Australia.
The above merit is likely to be achieved through interactions that the team at Coles will hold
with its clients via various online platforms like YouTube and Facebook. Moreover, these
platforms are essential in capturing and responding to feedbacks from clients in the comments
and rating sections (Sakas and Kavoura, 2015).
4.4 Environmental impacts
Communication is a vital element which helps to ensure that the quality of information that is
exchanged among the public concerning products and services offered by a company is reliable
and accurate. As such, the project will help to ensure better quality flow of information and
experience across the target audience due to the fact that online platforms are easily accessible.
Experience of clients will be enhanced through use of Cookies and quality of information will be
enhanced by prioritizing privacy of clients whilst undertaking online marketing (Sakas and
Kavoura, 2015).

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4.5 Economic impacts
The project is likely to yield high returns to Coles in form of increased sales due to widened
customer base. Also, the tax base of the government is likely to be widened whereby the overall
contributions of the retail industry to Australia’s Gross Domestic Product will be increased
(Sakas and Kavoura, 2015).
4.6 Financial analysis
Financial analysis for Coles is based on the digital marketing budget plans for over 3,347
companies across the world which was established in 2017 (Mazzaferro, 2018). It is from this
point of view that the number of components needed to develop the project will be derived. In
order to complete the extensive online marketing project, Coles will need to consider a multiple
of elements and cost estimates as depicted in the table below.
Component Cost Estimate
Social media marketing A$ 3000
Content marketing A$ 1200
Personalization A$800
Video advertising A$ 1000
Lead generation A$ 700
Market analytics A$ 1600
Mobile marketing A$ 1000
Email marketing A$ 500
Marketing automation A$ 2000
Natural search A$ 500
Lead management A$ 1300
Webinars A$ 900