Market structure is considered to be the way or nature of a market which is determined by the creativity and characteristics of those that subscribe to it. It is perceived to be influenced by pricing and non pricing factors regardless of the level of competition. Market structures involve various factors. ALDI and Coles are two unique organizations working in a similar market structure. They bargain in similar products. Be that as it may, their valuing and non evaluating approaches reciprocally contrast. The report contains both essential and optional information gathering strategies and investigation forms which are connected. The findings evaluate the same level of success for the grocery businesses except at different time intervals. The recommendation for the future study is the application of all stakeholder companies in the same market structure. This enables a reliable and realistic evaluation of the results.
An Investigation on Market Structure, Growth, Pricing and Non-Pricing Strategies
Market structure is best understood as the attributes of the market and how it is organized. The focus is placed on those attributes that potentially impact on competition prevailing in such a market or pricing. In order to understand the term market structure, we need to consider a few features. First and foremost is the number of companies involved in the business. This may also involve the completion scale or level as well as the extent to which the competition reaches. Secondly is the ratio that the largest firms dominate in the market. Other factors include the type of costs involved, the vertical integration of the business entity within the industry, the level to which the products are separated or rather differentiated due to the effects on cross-price elasticity with regard to demand, as well as the prevailing customers or buyers prevailing in the industry. In a nutshell, these are described as the major determinants of how a market is structured in any business environment. The structure of the market is known to impact on how any company or business would supply its services and goods, or how the entity manages to work with the exit or entry obstacles, including the company’s ability to conduct its business activities. Every business looks at growth. However, the manner in which this can be attained is entirely dependent on several factors, some of which include pricing and non-pricing policies of the business (Hendershott & Menkveld, 2014). It is noted that for every business to make profits or rather be considered as a successful entity, it must focus on profit maximization. However, this cannot be realized without strategic analysis and consideration of the market and the structure pertaining to it. In Australia, there are businesses that value such mentioned concepts. An example of these businesses includes the grocery business. In this case, the report will evaluate the market structure of Australia thus elaborating on how the major grocery retailers apply pricing strategies in order to win over the market and boost sales
In Australia, the grocery and supermarket business is one of the most booming ventures in the country. As a result of its booming nature, it has enrolled the most astounding number of the new organization or rather business passages after some time. ALDI's development and extension has definitely changed the manner in which staple business is done in the nation of Australia. It is noticed that ALDI had figured out how to develop and extend because of its strategies on the structure of the market. For instance, it has had the option to turn out to be prominent because of its key rebate issuance. Accordingly, the market and basic supply industry in Australia has seen real contenders, for example, Coles and Woolworth thinks about a decrease in costs of basic need items in order to remain pertinent in the market just as support clients. For this situation, littler players in the basic supply business have seen hardships as far as rivalry with the real players which makes the market structure progressively entangled to work in. This has been confirmed by the fall in benefits to all market players because of rivalry (Elfenbein et al., 2015).This implies that no business has accepted to leave the market but rather decided to cut prices and bear with the outcomes. This is done in a bid to lure and sustain customer. This, consequently, characterized the market structure as an aggressive one with numerous of all shapes and sizes donors who yawn for the piece of the pie. ALDI's ongoing extension and development in both south and Western Australia have energized different business players into the market. The expansion came as a result of an increase in population in the eastern part of New South Wales. It is also noted that the supermarkets were initially positioned in the shopping centers or shopping strips. However, the occurrence of such business is noted to have increased over time especially in the Central Business District of Australia. This presents an analysis with regard to the countries market structure and policing. Research experts note that there are various major factors for a business to operate especially in an Australian market setting. These incorporate the capability of controlling the stock available, displaying the item in a progressively alluring way, just as utilizing the most adroit and experienced group of specialists who comprehend the market and carefully exploit different players in the market.
ALDI has ruled the market extra time against its real rivals like Coles. It has been broke down that it constantly controlled the estimating power which set it in charge of the Australian market concerning basic need sells. As of right now, the element had made more stores that were intended to serve clients all the more effectively and determinedly with the best valuing arrangement. Subsequently, the organization won itself more customers to the detriment of its rivals, for example, Cole and Woolworth. Thirty premises indicate were estimated be the range by which ALDI would lead its rivals in the whole market that was cost aggressive. To be increasingly key, the organization further clarified that the returns coming about because of the additional sells would be directed into a back system for the organization to use as a cut-evaluating technique against its rivals, for example, Coles. For this situation, subsequently, different organizations would battle with operational expenses yet ALDI would be only taking advantage of its strengthening monetary fund’s (Cubbin, 2013). This inevitably puts it at the highest point of the market. Research specialists note that there was at one time a negative observation as to Cole's general store and its accomplishments. This was trailed by an examination clarifying how the costs were going down because of the value war with its significant rivals like ALDI. Numerous guides appear to comprehend that Coles would happier quit playing the value war yet rather set out on quality and administration for every single thing they effectively auction. In such a market structure with high challenge, it is very unavoidable to confront a stale development. This isn't just experienced by Cole's grocery store yet in addition different players, for example, ALDI, Conto, and Woolworths among others. Each basic supply shop or general store has actualized vital methods for beating the Hazard's engaged with the structure of the market. Coles has made a move to sell its basic need items on a vibe decent note while sitting tight for the financial limits of the family to recuperate. In a persistent examination of Cole's valuing power, the Australian parliament raised worry about why the top organizations were commanding the market by deciding the costs that clients needed to however at. This implied the littler organizations needed to pursue the costs set in spite of the mind-boggling expenses of activity. The suggestion was that Coles and other significant players delighted in the market benefits while the littler basic supply grocery stores endured. In any case, in an ongoing report did by the Australian Council for Small Business, the issue has been tended to. ALDI had begun before on enlisted a nine percent showcase esteem because of its estimating. Truth be told, it had been evaluated to move towards a fifteen percent record mark as it attempted to extend its activities all through the South and Western Australia. Be that as it may, things a very extraordinary now as the duopoly intensity of valuing appears to lapse or get over. As Cole and ALDI attempt to intensely keep running on a premise of value being offered rather than the cost, yet with ALDI endeavoring to reestablish the greater part of its real store the nation over with the point of pitching crisp sustenance’s to the overall population, the whole demonstration could appear like a triopoly. This is subsequent to believing other market players to be a consistent factor. Cole appeared to have had progressively key methodologies with regards to valuing. It is noticed that when ADLI chose to cut its costs that appeared lower than those of Coles, Coles chose to put limits on the majority of its real things which incorporated the Sunrise, Colgate just as Kleenex (Hatch, 2017). This saw the costs of perishables return to those of the dry staple passageways along these lines bringing down the costs of the crisp sustenance most loved chicken. Both chicken costs were seen to have gone low when the value war was in progress. This was in an offer to win more customers to them at a slight expense of activity.
The report presents concepts regarding pricing between two identified companies, that is to say, ALDI and Coles. This is done in a bid to win over the Australian market structure. The concepts explore the pricing competition between the two companies and how they have struggled to stay on top of each other in the market. The study has been undertaken by collecting data. However, the methods used to collect the data in this context are through tow mediums which include primary and secondary data collection. These are exploited as below;
Primary Method of Data Collect
Using the primary data approach involves evaluating concepts using a much more quantitative method. For example, exploiting this research report is done by evaluating concepts using a case study format. The case study involves an assessment of ALDI and Coles grocery entities in Australia.
Both companies apply a pricing strategy coupled with other methods of market sustenance such as price skimming and product-line pricing among others. Considering ALDI and Cole as the case study, their price related concepts seem to vary yet sometimes repetitively applied to challenge their opponents. In this case, an analytical overview of how both companies price and non-price is undertaken. Ascertaining ALDI and Coles grocery entities requires a consideration of factors such as the advertising medium, operational methods and working time among others. These results are derived from an evaluation of both companies’ marketing strategies and the creative means in which they try to beat their counterparts in the grocery business. The data collected is secondary data and it involves ascertaining alternative methods of market capture other than pricing for the two companies competing in the same market
Secondary Method of Data Collection
ALDI and Coles are companies that are well profiled basing on the level of popularity as well as their indulgence in the most lucrative sector of the grocery business in Australia. Compiling information regarding the state of competition in Australia was carried out using a secondary data collection. In this case, the information collected was majorly from peer-reviewed sources. These resources were critically identified and evaluated thus extracting the most relevant and required data which has aided in the completion of this report. The data collection methods ascertain the structure of the market in grocery supermarket business in Australia which is deemed to be competitive. In addition, the major retailer's strategies used by both entities to grow their business is also identified
The quantitative approach to the data collection for this research report indicates that the competition between the two companies or rather business entities is tight. It is denoted that ALDI and Coles are both instrumental players in the market. That is to say, they both lead and determine the market prices interchangeably (Campbell et al., 2015). However, this happens at different points in time especially when one of the companies introduces a new concept to the market. Considering the non-pricing strategy as used by all companies, they both fight to overtake in the market by introducing new products and ideas as it is observed in the case of ALDI. It is easy to think that ALDI holds a bigger advantage over Coles in the history of the grocery business in Australia. However, it may be wrong. This is due to the fact that Coles has taken on other competitors in both pricing and non-pricing activities. These other companies may include Woolworth which also trades in groceries and other related items. In this case, there are points in time where Coles claims the top position better than ALDI, thus commanding the market prices and enjoying the returns. Considering the findings from the research conduct, it is noted that the companies in the competition are many. The companies with the best product and service potentially determine the price for the rest of the market players. However, it is not a guarantee that these top companies will enjoy the monopoly. This is backed by the fact that the Australian parliament holds the capacity to interfere in unhealthy competition
Conclusion & Recommendations
To close, market structure is characterized as the business idea that contains the idea of the market just as its qualities, for example, evaluating, showcasing procedures, and numerous others. There are factors that establish a market structure. These are thusly recorded and quickly clarified. All together for any business to develop, they need to spread out methodologies particularly in an aggressive domain where the two organizations bargain in a similar product like on account of ALDI and Coles. Considering Australia and the basic supply general store business, it is viewed as a standout amongst the best and worthwhile space of business in the nation. This has been confirming by the aggressive idea of evaluating and non-estimating systems that have been connected in order to remain significant in business. The information gathering techniques in this are two. The first is the essential information gathering criteria and the second is the optional one. Be that as it may, these are assessed in subtleties. Discoveries from the investigation demonstrate that the challenge is the bottleneck. This is confirm by the between changing business sector administration for both ADLDI and Coles. The recommendations of the study in future include a consideration of all market player companies such as Woolworth and Conto among others. When this is done, the results that may be derived thereafter are more likely to be accurate as compared to those limited to only two companies such as ALDI and Coles.
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