Grocery stores and supermarkets are one of the most competitive and emerging industries in Australia. However, with the ramified changes, supermarket business industry is highly dominated by the cost leadership and product differentiation strategy followed by the different organization. It shows the key implication of the bus detailing the business operations of a well-known supermarket chain of Australia named as Coles group. Nonetheless, it is evaluated that Western Australian is one of the biggest supplier of Australia in terms of online shopping and holds more than average 11% to 20% market share.
Analysis of the v Industry
The supermarket industry employing a
significant amount of population around the world. Price competition in this industry is expected to remain strong in the next coming years. The recent development of private label brands and online shopping trends has altered in the operating landscape of the industry in a significant manner. The main organisations working in this industry include Coles Group, Woolworths along the individual Australian farmers and sone direct IGA retailers (Parker, et al., 2018). The estimated growth of the industry in 75.9% for the next five years. Western Australian is considered as the biggest supplier of Australia in terms of online shopping and holds for more than 11% revenue of the total profitability. The product range offered by the giants working in the supermarket industry has evolved in some past years due to the increased demand for organic food products. The customers are becoming more concerned about their health and prefer to purchase such products that may eliminate the chances of occurring severe health issuesand challenges. The increased demand for fresh food products is also impacting the demand for organic food production and thus helps in employing the farmers and other individuals (Corlett, et al., 2019). In this line, the online grocery selling sector develops a misappropriate revenue share in Western Australia due to the restrictive working and trading hours as specified by the government. The organisations are required to invest in the store systems, online platforms, and mobile applications to increase customer reach. In addition to this, some personalised consumer marketing strategies are also being used by organisations to attract potential customers.Nonetheless, the market is highly dominated by the strong rivals who are leading the market with their product differentiation and strong market trade name.
There are some main features of this industry that can be defined as follows:
Offering a large variety of goods: The supermarket and grocery industry of Australia offers almost all types of products and services related to their daily use. Thus, customers are becoming more dependent on this industry in order to get products easily. The main production provided by supermarkets includes food, vegetables, apparel, footwear, cosmetics, stationery, household items, utensils, cosmetics, and other related accessories. It indicates that customers do not need o visit multiple stores to get different things. Switching online business is providing more convenience to the customers as it can be considered as a unique feature of this industry (Pulker, et al., 2018). This shows the implication of the business cost leadership strategy which company has followed to strengthen them market share and competing with the other rivals in market.
Prices are lower: The supermarkets purchase products in bulk quantity and at discounted rates. This enables them to provide the products at lower prices in comparison to the other local and small level retailers. The final benefit is derived by the end consumer. However, the profit margin is also low but there is an increase in the total number of potential customers that can be seen in the increased number of market share of the organisation continuously. Low pricing strategies also enables the middle- or lower-income group customers to purchase from the supermarkets (Duong, 2016). With the low price, companies in industry are dominating the other rivals and grabbing more clients with the effective strategic plans. Nonetheless, it also impacts the gross profit and other return on capital employed of the company.
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