Coles Supermarket In Australia: Overview, Market Positioning, And Strategy

Positioning of Coles in the Market

Coles is one of the most famous supermarkets in Australia. Founded in 1914 at Melbourne, the company has a wide spread business in Australia. The online presence of Coles is also prominent and caters to a large number of customers in and around Australia. Coles is a part of the Western Australian cooperative and grew to be a successful conglomerate.   

Positioning of a company is one of the most important strategies for any FMCG company. The positioning of Coles is in the market place of the famous cities of Australia. The position of the company assists the potential customers and buyers to buy the products of Coles easily, due to their position of the stores. Moreover, a prominent online presence also assists the growth of the company (Bailey and Bailey 2016).    

According to the financial report of 2016, Coles had a high return to the Wesfarmers. The company had delivered $579 million to its shareholders, with a 50-cent dividend. As a supermarket giant, Coles had an annual growth by 6% and the profitability grew to $ 2.26 billion (Bogomolova et al. 2016).  

The five forces include the following:

Bargaining power of the suppliers: Since Coles is a famous FMCG company; hence it has a wide variety of suppliers. The supplier’s power is strong enough, since the company has the fear to lose the suppliers to its competitors (Devin and Richards 2016).

Threat of New Entrants: The threats of the new entrants are strong enough since many new FMCG companies such as Woolworths have been developing science the past decade.

Bargaining power of the buyers: The bargaining power of the buyers is negligible. This is because Coles is spread across Australia, and the same products have the same price across all the stores. Hence, the chances of bargaining are mitigated (Gettler 2014).  

Threat of Substitutes: The threat of substitutes such as Woolworths is a strong threat, as the company has been gaining power over the few decades. Thus, the customers of Coles might be attracted to buy their daily products from Woolworths.

Threat of competitors: The threat from the competitors such as Aldi and Woolworths might result in significant decrease of the sale of Coles, thus giving a strong blow to the production of Coles.

One of the strongest competitors of Coles is Aldi and Woolworths. All of these FMCG companies are competitors of each other. Coles needs to constantly monitor the rise of the competitors such that Coles remains the leaders of the retail and FMCG market of Australia.   

In order to conduct the micro environmental factors, a PESTLE analysis is to be done.

Political factors	The changes in the political party in Australia, or political instability in the country affects the business of Coles negatively.
Economic factors	The economic instability such as inflation or recession in Australia, decreases the productivity of Coles, as the customers might not engage in buying. However, since Coles is a seller of FMCG products, hence even during economic turmoil, the customers engage in buying their daily products (Richards et al. 2016).
Social factors	The changes in the lifestyle of the people of Australia change the kinds of products that are sold by Coles. With the increase in the use of organic food products the customers were in demand of the organic food products. Thus, Coles started selling more organic food items and groceries. Thus, the company and its sales is highly affected by the social factors.
Technological factors	The technology factors such as use of ICT and e-commerce affects the business of Coles. With the advancements in technologies Coles has increased its online presence and upgraded its e-commerce site. Thus, the technological factors have a significant effect of the business of Coles (Wardle and Chang 2015).
Legal factors	Coles is an established FMCG firm. Hence, the licensing and legal framework is quite strong. However, the company needs to abide by the legislation of Australia to avoid legal complexities.
Environmental factors	Coles need to take care such that it does not cause environmental pollution. The reduction in the usage of power consumption and water consumption needs to be reduced such that the environmental factors are met.

The corporate strategy of Coles highlights the achievements and maintenance of the satisfaction of the customers. This is ensured by offering superior quality customer services, along with selling fresh products. The corporate strategy also includes strategic planning for new stores across Australia, to provide a stronger competition to Aldi and Woolworths.   

The business strategy of Coles includes offering heavy discounts to the customers and giving special price of the products for the loyal customers. This business strategy is an effective one in order to attract customers (Jie et al. 2015).

Analysis of the Five Forces: Coles’ Competitive Environment

Currently, Woolworths have overpowered the position of Coles. The market shares of Coles have decreased significantly, with the rise of Woolworths. Woolworths have been rising gradually and steadily as FMCG giant, thus, decreasing the market position of Coles (Greenland et al. 2016).

Conclusion

Thus, it might be concluded that though Coles have been one of the most widely spread across the various cities of Australia, yet another able competitor Woolworths has overpowered it.  

In order to regain the lost position of Coles, a few changes might be incorporated. These changes include the reduction of the checkout time of Coles, along with changing the roles and responsibilities of the employees. Moreover, enhancement of the shopping experience of the customers might also be considered as future prospects of the company.

Woolworths is one of the largest Grocery chains in Australia. It is specialized in selling groceries and stationery items. The company is wide spread across Australia and provides fresh and safe vegetables and food products to its customers. Woolworths is far more than just a supermarket chain in Australia. It operates 837 supermarkets along with liquor shops and petrol outlets (MacMahon et al. 2015).  

The positioning of the company is strategic since the company is positioned beside large market places and areas of public gathering. This is important since the customers are able to find the stores easily. Moreover, the online presence of the company makes it even more easily accessible (Metzger 2014).      

According to the annual sales report of Woolworths group, th sales from the continuity operations are $58 billion. However, the sales from the Australian food and petrol are $39,410 million.  

The five forces of Porter’s are as follows:

Bargaining power of the suppliers: The suppliers have a strong bargaining power, since Woolworths select the best suppliers of the town and they have a risk to be lot to the able competitors such as Asda or Coles.

Threat of New Entrants: This is a major threat faced by the company is the threat of new entrants. Since small grocery shops have been growing constantly, hence the threat is a strong one.  

Bargaining power of the buyers: The bargaining power of the buyers of Woolworths is very low since the prices of the products are fixed across the stores of Australia and there is less or no scope of bargain among the buyers.

Threat of Substitutes: The threats of substitutes are low, since Woolworths is already an established grocery chain in Australia. However, the toughness of the competition might rise with the introduction of new substitutes (Richards et al. 2016).

Threat of competitors: The threat from the competitors such as Asda and Coles is quite strong.

Analysis of the competitors such as Asda and Coles is important to remain in a leading position in the industry of FMCG.  The rise in the power of the competitors is important to be analysed, such that Woolworths might be able to devise itself with new business strategies.

Political factors	Woolworths is affected by the foreign import and export policies. Moreover, new regulatory bodies and changes in the governmental policies also affect the business of Woolworths (Smith 2016).
Economic factors	The economic instability such as inflation or recession in Australia, decreases the productivity of Woolworths as the customers might not engage in buying. However, the economic instability might decrease the sale of Woolworths significantly.
Social factors	The brand image of the company, along with the product demographics act as social factors that affects the business of Woolworths.
Technological factors	The technology factors such as use of ICT and e-commerce affects the business of Coles. With the advancements in technologies Coles has increased its online presence and upgraded its e-commerce site. Moreover, the use of modern technologies such as barcode scanners and QCR code scanners enhances the business of Woolworths. Thus, technological advancements affect the business significantly.
Legal factors	Woolworths needs to abide by the legislation of the country, such that it might be able to avoid legal complications. Significant changes in the legislation affect the business of Woolworths.
Environmental factors	The environmental factors include minimizing the carbon footprints of the organization. the organization has also been engaged in various activities to reduce the amount of wastage in landfills.

PESTLE Analysis of Coles’ Micro Environmental Factors

The corporate strategies of Woolworths focus on satisfaction of the customers. In order to give adequate priority to the customers, the company builds a customer and store-led culture. Woolworths generates sustainable sales momentum in food. Empowerment of the portfolio business is also a part of the corporate strategies (Hol et al. 2014).   

The business strategies include efficient business foundation and serving the best quality products to the customers. Attractive and high discounts are given to the loyal customers of Woolworths such that they can attract more customers (Sutton et al. 2015).  

At present, Woolworths is one of the most famous and largest grocery chains in Australia, with new stores opening all around the world. Moreover, the company has been venturing into areas of liquor shops as well as clothes. Presently, Woolworths is an unbeatable leader in the FMCG and grocery industry of Australia.    

Conclusion

In might be concluded that Woolworths is a wide spread company that has ventured into various industries such as FMCG, liquor and fuels.

With the increase in the use of the organic food products, Woolworths have been venturing in increasing the organic products along with venturing into countries where it is not made its appearance.  

The competition between the companies Woolworths and Coles have been a constant issue and both the companies remain hostile towards each other. Each of the companies have their own business and corporate strategies and have been in tough competition with each other (Thyil 2014). Coles have been ahead in competition until the past decade when Woolworths overpowered Coles. Thus, from being a leader in the FMCG industry, Coles have received a backseat in the recent years (Thornton et al. 2017). The scores received from the suppliers of Woolworths is far better than the score received by Coles from its suppliers. Moreover, from the perspective of the employees, Woolworths have scored the highest in having the friendliest staffs. Thus, an in depth analysis of Coles and Woolworths highlights the fact that Woolworths is the best FMCG and grocery chain in Australia.

The above figure highlights the fact that Woolworths have the freindiest employees and staffs and a comparison of the in-store issues have been made among the two companies. Hence, it might be concluded that Woolworths have been dominating the FMCG market of Australia and almost monopolized the market with its efficient customer services as well as superior quality products.   

References

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