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    Supermarket Assignment Help

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    Supermarket Assignment Help


     Supermarkets

    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 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 issues and 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. 
     
    Features 
    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. 
     
    Answer to question no-2
    PART B
     
    The buyer's bargaining power –
    The existence of diverse supermarkets and the grocery stores in the Australian results in the shift of powers in which the power goes in hands of buyers where they can opt for the products whose prices are relatively cheaper providing daily use products. Moreover, the online business assists the customers to choose the best affordable options among all (Easton, & Sommers, 2018).
     
    The supplier's bargaining power-
    The power goes in the hands of suppliers when Western Australia raises it’s pricing, supplies goods of poor quality or doesn’t provide the goods of daily use to supermarkets industry and grocery stores. Hence, the companies buy the goods/services of daily use in a bulk quantity that gives them an advantage of saving their costs and time.
     
    The new entrant's threat-
    The cost leadership strategy and immense positioning in the market by the existing companies for instance- the supermarket namely the Coles group made it a bit difficult for the new entrants to establish their supermarket industry or the grocery stores. Hence, threats are relatively low in this sector. 
     
     
    PORTER’S FIVE FORCES MODEL
     
    The substitute threat-
    The daily use products available by the supermarkets for instance- milk, butter, bread are basic items that the human consumes regularly hence, the low-cost strategy by supermarkets assists in the purchase of products by the consumers thereby retaining and attracting for the long run (Alexander, 2018).
     
    The existing rivalry-
    There exists higher rivalry in the supermarket industry although the cost leadership strategy used by the supermarkets and grocery stores assists in dominating existing rivals and gain a competitive advantage as well as attract the target customers thereby gain market share in Australia that also impacts industries profit and ROC. Moreover, online convenience makes it easier to reach and provide products/services to its consumers. Coles group and Woolworth are some instances of the supermarkets based in Australia.
     
      
    In context with the supermarket industry, the main competitors include the Coles group, IGA, the Woolworth supermarket, Aldi and the Wesfarmers based in Australia as depicted in the above diagram. All of them use strategies for gaining market share and competitive advantage for instance- cost leadership strategy and product differentiation strategy (HU, & XIANG, 2019). Moreover, there exist tough price wars between Coles and Woolworths for capturing the market share and attracting the customers in the long run. Additionally, the supermarket's industry provides fresh and organic products at affordable rates for ensuring maintained health of its target consumers and gaining loyalty. Moreover, the diagram portrayed the fact that the Coles group and the Woolworth are dominant with around 79.9% dominance in the market of Australia.
     
     
    EXPLANATION-
    The theory came into existence in the year 199 and enacted by Barney that aims at the acquisition of the required resources- natural resources at cheap rates and then convert them into useful resources. Additionally, the implementation of the strategies is vital for growth and establishing a business in a competitive environment (Alexander, 2018). In context with the supermarket industry, the strategies such as pricing strategy and product differentiation strategies are used by leading supermarkets based in Australia for instance- Woolworth and the Coles supermarket for gaining the market share and purchasing of required resources at bulk quantity are done by supermarkets from Western Australia providing them with resources needed. Hence, it can be said that the resource-based theory emphasizes that acquisition and utilization of required resources are a must for gaining a competitive advantage from the existing rivals. Moreover, the purchased resources must be sold at a high price which can be more than its actual pricing for generating high- profitability in the competitive market. 
     
    SWOT ANALYSIS
    Strength-
    The strength of supermarkets lies in profits generated by the cost leadership strategy and increased demands of fresh and organic products to its target customers at low rates hence, it assists in attracting and retaining its consumers in long run. Moreover, the consumption of daily products such as- bread, milk is easily available by the supermarket industry at affordable rates that strengthen its presence and profits in the Australian market (HU, & XIANG, 2019). 
     
    Weaknesses-
    The Government tight policy for the Coles group and Woolworth supermarket in regards to non-flexible working and dealing hours restricts the growth of the supermarket industry. Moreover, problems arising from west Australia suppliers and the management weakens the industry.
     
    Opportunities-
    Supermarket industry can follow the trend and preferences by its consumers such as – organic products, gluten-free products that assist in attracting its customers and gaining a competitive edge in the market.
     
    Threats-
    The government interventions in Australia regarding fixed dealing and working hours and price-wars between the rival's presents as a major threat in the supermarket industry both online and offline.
     
    PART C
    IDENTIFICATION OF MAJOR ISSUES
     
    The governmental intervention-
    In context with Western Australia which is a major source supplier for the supermarket industries. Hence, the rules and regulations as per the Government of Australia regarding labor rights and rigid working hours act as a major obstacle for the supermarket industries based in Australia such as the Coles and worth wool. Hence, as a result, the grocery market generates embezzle profits. On the other side, abiding by the Australian Governmental new set of policies and regulations becomes a challenging task for the supermarket industry hence, the major issue of governmental intervention identified (Porter, 2019).
     
    Increased competition-
    The positive economic conditions give lucrative opportunities for the industries to establish and expand their own business at large. Similarly, in regards to the supermarket industry based in Australia, there exist cut-throat competitions between the competitors including the - Coles group, IGA, the Woolworth supermarket, Aldi and the Wesfarmers. Therefore, all of them use competitive strategies for capturing the market share and competitive advantage for instance- cost leadership strategies and the product differentiation strategy (HU, & XIANG, 2019).On the other hand, there exist tough price wars between the Coles and Woolworths for capturing the market share and attracting the target customers in the long run. Therefore, it can be said that the neck to neck competition is a key issue that can hinder the growth of the supermarket industry (Woolworths Company, 2019).
     
    Lower margins-
    The availability of the products and services at cheap rates allows in attracting and retaining the target customers for a long run but, this can be a key issue as the profits margin will be lower and to survive in the competitive market the, the price has to be even more lowered, therefore, the cost leadership strategy might result as a failure for the supermarket industry pertaining in the competitive environment (HU, & XIANG, 2019). On the other hand, the offers and discounts provided to the end-customers help in attracting them but again accumulates low profits. Hence, it can be said that the lucrative opportunities are relatively lower because of the low cost of the daily use products being available at the supermarkets and the groceries.
     
    THE STRATEGIC CHANGE-
     
    The technological strategically change-
    In context with the supermarket industry particularly the Coles group, it should adapt to the new technological changes to improve its productivity and survive in the competitive market. On the other hand, The IS system named the information system can be developed by the Coles Group to improve the business operations and gaining a competitive advantage from its competitors namely Wool worth, IGA, and the Wesfarmers. Moreover, the DSS system namely the decision support systems can be developed by the firm to enhance the decision making. Hence, technological barriers can be removed further by the adoption of the above systems (Davis, 2013). The strategic planning will be helpful to meet the strategic goals of the business and also helps in accomplish the set goals and objectives. Nonetheless, the advancement in the technology would be useful to strengthen the business and developing the business core competency.
     
    Employee’s capabilities to change-
    While implementing the planned strategies the Coles group's major disadvantage could be the lack of skilled workforce hence, the smooth operations cannot be performed. Moreover, Cole's group needs to adopt the latest technologies but that requires training which will be a costly affair in terms of time, money and efforts. Therefore, training and lack of required workforce for adopting the latest technology will increase the cost of operations and the labor cost (Competitor analysis, 2019). Additionally, adoption of the latest technologies is a bit difficult task and if the employees cannot handle the complex systems then, it will be indicated as a red flag for the organization thereby, hiring experts and fresh talents for operating the technical system is need of the hour (Beauchamp, Bowie, & Arnold, 2014).  Hence, it can be observed as a major key issue while implementing the business strategies in the organization. 
     
    RECOMMENDATIONS-
    Adoption of the latest technologies, for instance, the DSS and IS systems is strongly recommended for the supermarket industry especially the Coles group for ensuring smooth business operations and enhanced decision making in the organization.  However, lucrative opportunities are relatively lower because of the low cost of the daily use products being available at the supermarkets and the groceries which is one of the main attractive point to grab more clients. On the other hand, there exists cut-throat competition in the supermarket industries based in Australia hence, the cost leadership strategy is not enough to survive and compete in the existing market hence, it could be recommended that the industries need to implement policies and robust business strategies along with practices of good corporate governance for meeting the long term targets of the organization. There exist tough price wars between the Coles and Woolworths for capturing the market share and attracting the target customers in the long run  which could be more developed through the rapid development in the technology. Additionally, updates technology will assist the firm in improving productivity, gaining the lucrative opportunities and competitive edge in the market hence, strongly recommended. Online convenience is the best way for reaching the target customers hence, the implementation and active engagement through posts is highly recommended for reaching customers and spreading awareness regarding the respective products and services. The updating in the technology and system process would be the best option to accomplish the set goals and objectives. The strategic planning undertaken would help to meet the strategic goals of the business and also helps in accomplish the set goals and objectives. Nonetheless, the advancement in the technology would be useful to strengthen the business and developing the business core competency. It is advised that the core competency in the particular field by the company helps in mitigating the business issues and problem in determined approach.