There are various supermarkets in Australia that sell goods to the public. They do sell various types of goods ranging from consumables to non-consumable goods. Some of the supermarkets found in Australia are; The Woolworths, Coles supermarket, the IGA supermarket, Star Mart supermarket, Shop-Rite supermarket, Friendly Grocer among others.
For our case, we are going to look at the Coles supermarket.
There are a number of challenges that are facing not only the Coles but also almost all supermarkets in Australia, some of these problems are, theft and shoplifting by some of the customers, competition from the continually growing retail ventures among others. There is, therefore, need to carry out an analysis on various sections so as to determine the appropriate way to deal with these challenges (Hill, 2017 p.67)
The macro environment refers to all the factors without an organization that affects its general operations and well-being. Some of these factors are; the demographic factors, economic factors, political/legalA factors, technological factors and social-cultural factors. The macro environmental analysis provides a means of understanding each of these factors and identifying the existing trend in each of them. It is by identification of the trends that exist that actually provides opportunities for the company (Hill, 2017 p.197)
For our case, for instance, we are going to look at these factors and identify the changes taking place in each of them so as to notice the current trend. With the establishment of the trends, then this would put the Coles supermarket in a better position of fully utilizing the available opportunities (Robson, 2015 p.89).
Demographic changes -Some of the changes are; changes in rural-urban migration, changes in the general ethnic composition of the population, changes in birth and death rates, changes in the life expectancy etc. Economic Changes-Changes in interest rates offered by banks and other financial institutions, changes in inflation rates, changes in the exchange rates etc.
Political/Legal Changes-Changes in the taxation policy of the country, changes in the environmental protection laws, changes in laws regarding amalgamation and merging etc.
Technological changes-changes and increase in data distribution means and methods by means of various communication systems (Freeman, 2010 p.45).
Social-cultural changes-Changes in gender and their involvement in the task force, changes in concern for customers, changes in concern for the environment etc. The above factors and each of the changes taking place in them have a great implication on the Coles supermarket. The changes in the taxation policy for instance under the political/legal factors put the Coles supermarket in a very uncertain position. When the taxes are increased this means that they would be making much fewer profits than they already are. This will make them increase their prices to cater for the extra fees. Increasing their prices, on the other hand, will tend to affect their relationship with their customers (Moutinho & Vargas, 2018 p.212).
Changes in the rural-urban migration will also have an implication on Coles supermarket, an increase in rural-urban migration will mean that a lot of people will be shifting to the urban centers and since Coles supermarket is located in the urban areas this will mean an increase in the number of customers. From all the above factors, it is important that Coles supermarket looks at each of the changes and trends taking place in them so that they can take advantage and utilize the available opportunity maximum by adjusting and changing some of their priorities so suit and fit into the identified trends.
The life cycle stage of the industry
When the performance of a product is plotted against time, it assumes various stages of development that tend to change when the product is first introduced to the market to the time it is withdrawn (Freeman, 2010 p.61).
Introduction stage -This is when the product is first introduced to the market, the customer has no knowledge of the product and during this stage, the company makes no profit at all or they may even make negative profits since the product is not purchase.
Growth stage-At this stage, the customers start to become aware of the product. Knowledge about the existence of the product spreads and this increases its sales. The competition also becomes aware of the existence of the product and start coming up with ways of countering the product.
Maturity stage-At this stage, the customers become fully aware of the product in the market and the sales of the product reach its peak. Performance curve of the product is usually at its peak during this stage the competition, however, considers your product as a threat and the come up with ways of countering it (Eden & Ackermann, 2013 p.122).
Decline stage-The performance of the product starts to decline. There are no new customers purchasing the product apart those from the category of laggards.
There 5 factors that were proposed that helps in this, they were referred to as porters 5 forces model. They are clearly explained below;
The threat of segment rivalry- This refers to a situation where each of the available company tends to want to be known as the best producer of goods and services. They, therefore, tend to increase their costs of operation. Increased segment rivalry has an effect of making the cost of operation in a certain industry so high (Cohen &Roussel, 2013 p.301).
The threat of new entrants into the Industry-This refers to the entrance of totally new members in the market. Well, new members tend to bring new products that are even much developed and at a much cheaper price but still targeting the same market. This increases competition and makes a certain industry undesirable (Hill, 2017 p.307)
The threat of customers increasing their bargaining power- This refers to a customer or a group of customers acting individually or even collectively to advocate for changes in aspects about the products being offered, some of these aspects are; the price of the product, the packaging etc.
The threat of suppliers increasing their bargaining power- This refers to the suppliers of goods avoiding and resisting to supply goods so as to demand things like contracts etc.
The threat of substitute product-A substitute product in a product that serves the same purpose as the product that exists in the market.
It is important to note that these were proposed by Michael Porter. They are used to determine the attractiveness of a market of a particular market segment (Eden & Ackermann, 2013 p.102).
Cole’s supermarket has the available resources and the appropriate capabilities to aid in achieving its goals and objectives of profit maximization. Cole supermarket does not only sell food, it also sales home supplies and stationary which is a great advantage to them. Their prices are not so high which attracts so many customers. Their stores are well organized and neatly arranged (Freeman, 2010 p.108). It is also strategically located which is among one of its major advantages. Its location plays a very crucial role in making Coles supermarket achieve its strategies and objectives.
As far as environmental factors are concerned, it was noted that demographic factors such as changes in rural-urban migration are likely to have a great impact of assisting Cole supermarket to achieve its goals since a lot of people will be traveling to the urban areas thus the company is likely to have so many customers.
Competitor analysis
There are some competitive threats that Coles supermarket needs to address. From the Porters five forces model, it was noted that there are some threats that when not well handled then they are likely to cause some serious problems (David, 2011 p.79). The issue of the threat of substitute products, it was noted that a lot of substitute products are being introduced in the market and these newly introduced products are being sold at a considerably cheap price by the competitors (Wheelen & Hunger, 2011 p.67). This brings about competition since almost all customers are going for the new product which is way much cheaper.
There are a number of strategies that can be proposed for Coles Supermarket. Strategy formulation is always conducted at the corporate level which consists of the top management such as CEOs and other top managers. They are usually tasked with the formulation of a company’s mission and therefore formulate the strategies that are to be implemented at the business level (David, 2011 p.109).
The proposed strategy for Cole’s supermarket is the generic/porter generic strategies. They are strategies that aim to achieve a competitive advantage against all the other supermarkets in the industry. These strategies are; the cost leadership and differential strategy.
Analysis if it is working out or note
The above-mentioned strategies are working out for Coles supermarket, as we know the cost leadership is a strategy aims at seeing the supermarket is considered as a cheap pest of goods and services, by producing goods at a very low price. This is so since Coles supermarket sales goods at a considerably low price and still manages to make a considerable amount of profit.
Suggestions for improving current strategies
It can be suggested that Cole’s supermarket also incorporates the differential strategy in its system; this will tend to make its products much more preferred over the other competitors in the industry since they would be unique and so different. This is likely to make Coles supermarket among the leading supermarkets in Australia.
Conclusion
From the above-mentioned facts, it is clear that Coles supermarket is not a bad position. Its situation is well identified and there are great chances of improvement. There are different general stores in Australia that pitch products to people in general. They do offer different sorts of products running from consumables to non-consumable merchandise. A portion of the general stores found in Australia are; The Woolworths, Coles market, the IGA grocery store, Star Mart general store, Shop-Rite market, Friendly Grocer among others. There are various difficulties that are confronting the Coles as well as all general stores in Australia, a portion of these issues are, burglary and shoplifting by a portion of the clients, rivalry from the ceaselessly developing retail wanders among others. There is hence need to complete an investigation into different segments in order to decide the proper method to manage these difficulties. The full-scale condition alludes to
As in the current position of the Coles supermarket, there are a number of recommendations that can be made;
References
Cohen, S. and Roussel, J., 2013. Strategic Supply Chain Management: The Five Core Disciplines for Top Performance, Second Editon. McGraw-Hill.
David, F.R., 2011. Strategic management: Concepts and cases. Peaeson/Prentice Hall.
Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management. Sage.
Freeman, R.E., 2010. Strategic management: A stakeholder approach. Cambridge university press.
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function. Macmillan International Higher Education.
Moutinho, L. and Vargas-Sánchez, A., 2018. New performance measurements. Strategic Management in Tourism, CABI Tourism Texts, p.212.
Robson, W., 2015. Strategic management and information systems. Pearson Higher Ed.
Wheelen, T.L. and Hunger, J.D., 2011. Concepts in strategic management and business policy. Pearson Education India.
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