Competitive Strategy refers to long term plan in relation to a company that can help a company in gaining competitive advantage over the competitors within the industry. It can help in the creation of a defensive position within the industry that can help in generating superior Return on Investment. Coles Group is the name of Australian public company that is instrumental in the operation of different retail chains within Australia (Colesgroup.com.au 2018). This report discusses about the strength, opportunity, weakness and threat in relation to Coles Group in Australia. It also talks about the Porters generic strategies and how it helps the company in attaining competitive advantage.
Strength- Coles Supermarkets has the largest share in relation to domestic food along with liquor market owing to its long history within Australia. It makes use of patriotic slogans like ‘Proudly Australia since 1914’ that helps in appealing to the people living in Australia. The attracting pricing strategies of the company helps in drawing people towards the brand. The company is instrumental in offering cost saving products along with services that acts as a strength for the company (Verhoef, Kannan and Inman 2015). The company takes into account the issue of sustainability that helps the company in rising above the competitors.
Weakness- The negative publicity in relation to the company was owing to hard-line negotiation with the suppliers of Australia. It has hurt public sentiment in relation to the company. The company is operative on that of low margins that acts as a weakness for the company (Burke, van Stel and Thurik 2016). The company also suffers from the brunt of management issues that acts as weakness for the company.
Opportunities- Greater control in relation to supply chain can help in funnelling the aspect of produce and bring profit at that of the multiple points. The geographic expansion of the company can help the company in reaching out to the new regions within the global arena. Sponsorship along with marketing exercise can help in boosting the business for the company that can help in opening opportunities for the company (Carré, Tilly and Appelbaum 2014). The opportunities that the company gets is due to the fact that it has private label strategy that can be useful for the company. The company has insurance along with finance sector opportunities that helps the company pertaining to its operation in Australia.
Threats- The threats that the company faces is owing to the fact that intense competition within supermarket space has dropped the prices of the food prices and it has reached dangerous low level. The consumers in the present age are becoming confused in relation to various generic brands owing to lack of the aspect of distinctive communication. The threat of the company arises due to the fact that a large number of buyers are opting for the independents and small retailers instead of Coles. Coles Group in Australia perceives threats because food market within Australia is undergoing constant evolution because the competitors come up with innovative business models that threatens the presence of the company.
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Strength |
Weakness |
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· Largest share of domestic food and that of liquor market within Australia · The patriotic slogans of the company plays an important role in attracting the customers · Offers cost saving products · The company makes use of sustainable practices that act as strength for the company |
· The company operates on the low margins that is a weakness in relation to company · Company faces a lot of management issues · The company faces difficult negotiation with suppliers that acts as a weakness for the company |
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Opportunities |
Threats |
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· The control that the company has pertaining to supply chain helps in bringing profit for the business · Geographical expansion in relation to company helps in throwing open opportunities for company · The superior marketing techniques employed by the company acts like an advantage for the company · Private label strategy can be useful for company |
· The competition occurring in the arena of supermarket can drop prices of food prices · The presence of small retailers within Australia · The evolution of food market in Australia is a source of threat for company · The competitors having innovative business model is instrumental in threatening the future of the company. |
Cost Leadership- Coles Group has been able to win the market share by attracting the customers who are cost-sensitive. The products that are offered at Coles Group like the household essentials along with grocery items are offered at very low prices in that of target segment that helps in drawing a large number of people towards the popular brand (Jary and Wileman 2016). The firm operates in lower cost as compared to the rivals like Woolworths Group, Distributors and Costco. A large segment of the population in Australia buy the gourmet foods and that of the household essentials owing to its pricing strategy (Wilson 2015).
Differentiation Strategy- Coles Group is involved in producing innovative products that helps the company in competing successfully within that of the Australian market. There are many initiatives that are undertaken by the Coles Group that helps in meeting needs of present day customers (Nagle and Müller 2017). Coles Group diversifies the products and improves the on-shelf availability of the products that helps in providing a superior experience to the consumers. The company takes care of the hygiene factors and checks for the smooth trolleys that sets it apart from the other retail companies operating within Australia (Mehra, Kumar and Raju 2017). The food and the dairy products offered at the Coles Group are fresh that helps in drawing customers.
Focus Strategies- Coles Group focusses on the aspect of segmentation strategy for drawing the customers. The primary target group that is targeted by the company is the middle income and the upper income group. The company keeps different kinds of products having varying prices that makes it convenient for the customers. Product innovation is practiced by the company that helps it in catering to the needs of large group of people. There are variety of grocery items along with other essential that helps the company in meeting needs of the people.
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Cost Leadership |
Differentiation Strategy |
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The products of the company have low prices that helps in appealing to people |
Produces products that are innovative that helps the company in setting itself apart from that of the competitors. |
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Focus Strategies |
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There are products of different kinds that can be bought by people belonging to various kinds of income groups. |
Conclusion:
Competitive Strategy is indicative of long term plan that can help a company in remaining competitive within the market. Coles Group makes use of slogans that helps in retaining and attracting customers. The pricing strategies of the company are very attractive that can serve needs of people. The management issues that the company faces becomes weakness for company. Geographic expansion pertaining to company can help the company in getting hold of new customer base. The company faces threats because there are many buyers who opt for the independents and the small retailers in Australia. The company have been able to win a large market share by taking into account the needs of the cost-sensitive customers. The company makes innovative products that helps the company in surviving with competitive environment of Australia. Initiatives have been taken by company that can meet the needs of the customers present in Australia.
References:
Burke, A., van Stel, A. and Thurik, R., 2016. Testing the Validity of Blue Ocean Strategy versus Competitive Strategy: An Analysis of the Retail Industry. International Review of Entrepreneurship, 14(2). Retrieved from: https://web.a.ebscohost.com/abstract?direct=true&profile=ehost&scope=site&authtype=crawler&jrnl=20092822&AN=117432396&h=md7Y4Gs1KPoQh3nryhh2KwJo2Qqlb90BAG2fJrzYYWS3%2b5BSHnfISNCup4KylTkoIqgPK59Np7vdlPvFtvN%2b2A%3d%3d&crl=c&resultNs=AdminWebAuth&resultLocal=ErrCrlNotAuth&crlhashurl=login.aspx%3fdirect%3dtrue%26profile%3dehost%26scope%3dsite%26authtype%3dcrawler%26jrnl%3d20092822%26AN%3d117432396
Carré, F., Tilly, C. and Appelbaum, L., 2014. Competitive Strategies and Worker Outcomes in the US Retail Industry. Members-only Library. Retrieved from: https://www.lerachapters.org/OJS/ojs-2.4.4-1/index.php/LERAMR/article/view/1723
Colesgroup.com.au (2018). Coles Group | A trusted retailer, delivering quality value and service. [online] Colesgroup.com.au. Available at: https://www.colesgroup.com.au/home/ [Accessed 5 Dec. 2018].
Jary, M. and Wileman, A., 2016. Retail power plays: From trading to brand leadership. Springer. Retrieved from: https://www.springerprofessional.de/en/retail-power-plays-from-trading-to-brand-leadership/10524590
Mehra, A., Kumar, S. and Raju, J.S., 2017. Competitive Strategies for Brick-and-Mortar Stores to Counter “Showrooming”. Management Science. Retrieved from: https://pubsonline.informs.org/doi/abs/10.1287/mnsc.2017.2764
Nagle, T.T. and Müller, G., 2017. The strategy and tactics of pricing: A guide to growing more profitably. Routledge. Retrieved from: file:///C:/Users/USER/Downloads/9781315185309_googlepreview.pdf
Verhoef, P.C., Kannan, P.K. and Inman, J.J., 2015. From multi-channel retailing to omni-channel retailing: introduction to the special issue on multi-channel retailing. Journal of retailing, 91(2), pp.174-181.Retrieved from: https://www.sciencedirect.com/science/article/abs/pii/S0022435915000214
Wilson, J.P., 2015. The triple bottom line: Undertaking an economic, social, and environmental retail sustainability strategy. International Journal of Retail & Distribution Management, 43(4/5), pp.432-447. Retrieved from: https://www.emeraldinsight.com/doi/abs/10.1108/IJRDM-11-2013-0210
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