1. Situation Analysis
Australia’s grocery giants go head-to-head before a panel of industry judges to determine which supermarket is winning the marketing war. Coles, is one of the giants in Australian supermarkets industry, which always compete price of products with its main competitor, Woolworth. In 2012, the market of supermarket had grown compare to 2011, while customers go to supermarket two to three time a week in average (Kruger, 2012). Coles and Woolworths hold 56% of the Australian grocery market. The concentration of competition has made the rivalry palpable. Meanwhile, Coles aims to continue a price war it kicked off in 2011, recently Coles is confirmed that it is continually close the gap with Woolworths. Other than the supermarket business, Coles also operates liquor, online, fuel and convenience store. In 2012, the food and liquor market shares in price of Coles and Woolworth are 30% and 42% relatively. Compared to 2011, Coles has an increased in sales growth and business growth in most of their business line in 2012. Richard Goyder, Chief executive of Coles, said Coles will continue to have a very strong focus on delivering value for its customers and persistently put effort on price, as long as the company can get more customers, and sell more product, get efficiencies in business and also through the supply chain (Courtney, 2013).
1.1 SWOT
Strengths Opportunities
• Domestic market
• Loyalty: Flybys
• Physical location
• Pricing power
• Ambassadors and sponsorship
• Exclusive products • Adding new services
• Prospect of supermarket is favorable
• Increasing globalization of food production and retail markets
• Income level at a constant increase
Weaknesses Threats
• Weak cost structure (high cost)
• E - commer...
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...r Devondale would feel pleased and happy for this deal since it enables them to supply more dairy products (Coles’ home brand and Devondale). This has the potential to lift the returns for farmers by maybe two or three cents per liter and reduce the volatility of farm gate prices.
In conclusion, Coles has to stop using coercive power on the suppliers and stop unethical or illegal activities, which contribute to build trust with its suppliers and beneficial for their long-term business. At the same time, it can increase the price of its home brand milk, by using strategic methods to attract more customers. Other than the fair trade label, Coles could state that they would donate 10 cents to charity if a customers purchase their home brand milk to boost their purchase pattern, as well as a good opportunity to develop its reputation.
Devondale is an Australian company that specialized in selling wide span of dairy categories, such as, milk, spreads, and cheese products. This company is formed in 1950 with dairy farmers as their major suppliers. In 2013 – 2014, Devondale is contributing around 3.4 billion liters of milk or estimated around 37% of the Australian market, and generating $2.9 billion dollars as the revenue in excess.
The targeted goal set by Joe’s is to reach an increase of organic product by an outstanding 30%. A selling point for many people in today’s market is whether or not the food or the product is safe for them. Recently people have discovered that organic foods tend to be much better for the body and give more nutrients than inorganic does. So by achieving the goal of increasing organic products by 30% Joe’s will be targeting a much larger market to whom people only consume organic products, also they will see an increase in their target market, due to the stigma behind organic food within younger
Additionally, ‘extreme value’ retailers also impact the rivalry among competitors. Recently, Target, Kroger and others have added dollar sections and major bargains to their format. Price sensitive consumers are attracted to the dollar store grocery deals; also, discount stores such as the 99 Cent Only stores compete on perishable items, such as produce and dairy. They seem to be affecting the supermarkets market share, as described in Retailing in the 21st Century:
The framework that will compare Publix Super Markets and its competitors is the Five Forces Model of Competition. The five aspects that will be discussed are the threat of new entrants into the market, the bargaining power of suppliers and buyers, threat of substitute products and rivalry among competing firms. Striving for the optimal position in each of these categories has given Publix Super Markets the reputation it has pride towards earning. It is important to every compa...
This report explores the marketing channel problems that David Jones, a high-end Australian department store chain, is currently experiencing. Since it was founded in 1838, David Jones has expanded to the 35 stores, two warehouse outlets, and the online site that it now operates. It is Australia’s second-largest department store chain and sells a range of the finest national and international brands. After suffering from a substantial decrease in sales and profits, David Jones implemented a Future Strategic Direction Plan in 2012, which saw its successful transformation into an omni-retailer, which consistent increases in the online sales since the new channel’s establishment. Woolworths Holdings Limited offered a takeover bid in 2014 which has been accepted by David Jones under reasons to more adequately compete with international leading retailers, which raises issues of whether this is the best course of action for David Jones. After considering the advantages and disadvantages of alternative solutions, including a merging with Myer and remaining as a self-owned department store chain, it was ultimately deduced that perhaps proceeding with Woolworths takeover would provide David Jones with the most benefits in its current situation in concurrence with their future goals.
The Article "Flanking in a Price War" discusses how an economic experiment and data were used effectively in the Quebec grocery industry. The beginning of the article gives some history of the industry, introduces the major participants, and describes how one firm in particular, Steinberg, used a price cutting strategy to became the dominant player for 30 years.
Some dominant economic features of this industry include the number of rivals, the number of buyers, vertical integration, and supply/demand conditions. The number of rivals in this industry varies on the scope of how large or small the firm is. Larger rivals include Whole Foods and Walmart and smaller rivals include Lucky’s Food Market and Pathmark. For example, Walmart has a highly differentiated product selection. it offers various forms of products that are ‘identical’ to better convenience its consumers. Walmart also has large channels of distribution where its “shippers are always on the lookout for ways to speed product from source through supply chains to the consumer” (Walmart, 2014 Pg.1). The number of buyers in this industry is consumers who are buying large volumes of products, where these buyers do not necessarily have any buying power. The majority of of grocery stores are in the retail industry, where larger involvement occurs from integrating operations, and suits the industry as a competitive
I thinks Wal-Mart’s normal marketing strategies are traditional marketing strategies, ideal for the Australian culture. Australians expect the quality they need at the prices they can afford.
It should capitalize on the cost-leadership strategy and improve its customer service to edge out Ace and steal a chunk of its market share. Lowe’s should also seek to negotiate for favorable contracts with the major Australian suppliers on a cost-advantage level and thus increase its bargaining power. Moreover, such a strategy would create an entry barrier for Australian start-up competitors who might seek to use their home advantage to outcompete
Wal-Mart’s competitive environment is quite unique. Although Wal-Mart’s primary competition comes from general merchandise retailers, warehouse clubs and supermarket retailers also present competitive pressure. The discount retail industry is substantial in size and is constantly experiencing growth and change. The top competitors compete both nationally and internationally. There is extensive competition on pricing, location, store size, layout and environment, merchandise mix, technology and innovation, and overall image. The market is definitely characterized by economies of scale. Top retailers vertically integrate many functions, such as purchasing, manufacturing, advertising, and shipping. Large scale functions such as these give the top competitors a significant cost advantage over small-scale competition.
The competitive pressures that Oliver’s Market must be prepared to deal with are the pressure associated with the market maneuvering and jockeying for buyer patronage that goes on among rival sellers in the industry and the pressure associated with the threat of new entrants into the market. They must be prepared to face with the rival stores, Trader Joe’s, Costco, and Whole Foods who had recently entered in the sales territory with brand new stores and so far Wal-Mart and Target also had announced plans to develop regional supercenter, that is, large –format discount center into their territory.
The major players of retailing industry include Coles , Franklins and 7-Eleven. Obviously, Coles and Franklins are the major competitors of 7-Eleven. Coles is a full service supermarket operating 431 stores throughout Australia, its offers
The food and staples retailing is an increasingly competitive industry. The market giants (competitors) are Coles (owned by Wesfarmers) which has 741 stores across Australia and plans to add 70 m...
At present they Coles are regularly checking 8000 product to ensure that they remain in the lowest possible price. At the same time, Wesfarmers must come out with a different segment of own individualistic product lines where they will focus on lowest profit margin. The segment can’t be big at first. But within 10 years, they can have a reasonably strong product line consisting of 1000-2000 products. Remembering the huge market capital they have, it is not a big problem. For any foreign competitors like Aldi, it is difficult to adopt local culture completely. Wesfarmers in that case have a big advantage. Supermarkets must contain products based on the region they operate and local mangers and employee must have some freedom regarding selection of these products. At the same time, they can look out for product of local entrepreneurs representing local culture and it can increase revenue. At the same time, that will be very effective as a patriotic campaign and the image developed by such step will help to further enhance its position as the no 1 conglomerate in
Imlay, T. (2006). Challenges in today’s u.s. supermarket industry. Microsoft Retail and Hospitality, Retrieved from http://msdn.microsoft.com/en-us/library/aa479076.aspx