Evaluate the Fierce Competition of Woolworths and Coles.
In order to execute the business processes effectively, it becomes very crucial for any of the organization to analyze the requirements and needs of the targeted market areas. This research paper will help in explaining the desired race between two of the companies Coles and Woolworths which has already begun throughout the Australian supermarkets. Both of these companies have captured almost 80 percent of the entire Australian supermarket. Coles is the part of Wesfarmers, which is western Australian cooperative that mainly grew highly profitable conglomerate (Zhai, 2017). The firm owns Coles, Bunning consisting of 223 warehouses and 63 small-format stores, Office works and Kmart. On the other hand, Woolworths is supposed to be more than a supermarket chain which is operating 873 Woolworths supermarket, 527 Liquor outlets along with 327 other licensed outlets consisting of Dan Murphy’s and BWS, 600 Caltex Woolworths different co-branded petrol outlets etc. The competition between these two firms, Coles and Woolworths remained constant as well as is often hostile.
Macro environmental factors
This analysis critically includes those factors which generate great amount of impact on the execution of the business processes belonging to a particular type of the industry such as Australian Supermarket in this particular case. Moreover, the immense competitive level throughout the industry has been set by Woolworths and Coles. Porter’s five forces, competitor’s analysis will help in evaluating the desired rise in the competition throughout the concerned market areas.
Porter’s five forces
The profitability of both of the companies is merely dependant on the effective marketing strategies as well as the brand name developed throughout the concerned market segments. The use of the five forces helps in identifying the desired needs and the demand of the customers throughout the concerned Australian market segments.
Figure: Graphical representation of Porter’s five forces
The power of suppliers: This reflects the fact that the suppliers for Coles and Woolworths retain the desired power in the hands regarding the purchase made by the consumers (Wardle and Chang, 2015). They can attract any customers by the superior quality of goods and services towards the purchasing of the respective product. It has been evaluated that the offering of the uniqueness in the respective products concerning the build quality of the product helps in retaining the desired power in the hands of the consumers concerned.
The threat of new entrants: The threat of the new entrants to the Australian Supermarkets have strived both Coles and Woolworths to establish their respective stores at different places throughout the Australia (Aoude, 2016). Metcash is the third player which is operating as the wholesale distributor, as well as the marketing business, is somehow generated a great impact on the execution of the business processes of the above two mentioned companies throughout the Australian Supermarket concerned. The use of the mobile technology and the social media has been effectively used by the new entrants in order to execute their respective marketing process which diverts a large number of the customers (Trevena, 2015).
The threat from substitutes: Rise in the number of the wholesale distributors and retailers throughout the different parts of Australia have significantly affected the execution and evaluation of the business processes by any of the companies concerned. The increase in the number of the lucrative and attractive products at different affordable prices has generated immense impact on the minds of the customers (Bonoli, 2017). Moreover, the collaboration of the new entrants with global firms in order to produce high-quality substitutes critically affects the execution of the business methods by these two firms that are Coles and Woolworths.
Industry Rivalry: The rivalry among the existing firms, especially among the bigger brands such as Coles and Woolworths can easily be seen. The contribution in increasing the significant level of competition has been seen from two larger brands such as Wesfarmers and Asda. These firms are competing against each other to achieve the leader position which will finally help in evaluating their desired success and profitability (Australia, 2014). Recent years have shown the rise in the preferred competition level between these firms and they reflect the rivalry among them after the advancement of the new gadgets which are effectively used as the vital marketing and promotion tools.
Bargaining Power of Buyers: Coles is engaged in providing some of the unique quality of the products, whereas Woolworths are offering different types of the products and different prices, therefore, the entire power under this segments goes into the hands of the buyers as they have wider options to select from. The availability of the same type of the products at affordable ranges makes it easier for the concerned customers to choose from different retailers regarding their particular products. Moreover, there has been the significant rise in the evaluation of the latest technologies and gadgets which make it suitable for the consumers to select their respective products from a number of the available retail outlets (Mhurchu, 2016).
Competitor analysis: Woolworths and Coles act as the strongest competitor and are in the race to win the desired competition throughout the Australian market segments concerned. These two brands are recognized s to be the leader of the Australian supermarket but there has been a significant race among these two organizations regarding capturing the most of the share markets (Price, 2016). Coles holds more than 100,000 employees along with 700 outlets throughout different parts of the country. It was supposed to be the first supermarket that was opened in Melbourne in the year 1960. On the other hand, Woolworths is a positioned brand holding more than 870 stores throughout the nation. These two companies capture 80% of the Australian supermarket’s share (Cameron, 2015). They are engaged in producing unique products concerning latest technologies in order to boost the desired growth and development of their respective organizations (Lewis and Huber, 2015).
Woolworth’s group has the strength to reduce their cost but if the performance level is compared between two companies then Coles has improved a lot than Woolworths. The core competencies of this both super market are the product availability and their cost (Cameron, 2015). Coles have the capability of controlling their great size supply chain so that the produce and the harvest profit can be achieved. Woolworth’s resource is in their human resource department for their promotion along with the sustainable competitive advantages. And for Woolworths they have 800 stores in all over the country, whereas Coles have a huge brand name and their promotional capability is also huge for their products and services. The core competencies of both the super market are their service and their quality of products that are available in their different stores. They provide a huge discount on their various products and for Coles they most of the time to enhance their competencies provides various offers and competition in their super market to attract more and more customers for their super market (Grant, 2016). Both the company is essentially using their resources and their capabilities to grow in the market and them providing a huge competition to each other.
Corporate strategy of an organization is directly concerned with the procedure of creating a value of that company across the various businesses. The main strategy of Woolworths is to build the store led culture and customer culture in the organization as well as to generate sustainable sales momentum in the quality and quantity of food market. They also have the corporate strategy to evaluate their drink business so that they have the ability to provide more value to their customers. Their new strategy to win over the grocery stores is that they place customers on a top priority list of their strategic plan. Furthermore, it can be seen that the strategy of Coles is to provide superior quality of products to their customers and allow them to have best customer experiences (Molinillo, 2014). Here it can be seen that is the super market both the company kept their customers in the place of first priority and for that they are providing best to their customers. The various kinds of shop and other retail stores in the super market allow both the super market to maintain their value in the corporate business world.
Business strategy is the process of formulating, evaluating and implementing the cross functional decision of a business enterprise. Woolworths have the business strategy to be the customer centric business along with that they want to be the brand value business for the supermarket in Australia (Sutton-Brady, 2015). Their one more strategy is to grow product dominance clothes as well as the general merchandise. They also have the strategy to allow a multi channel world where they offer online marketing facility for their customers. Their strategy involves the expansion of their business into Africa and also lowering their business cost. They have the strategy that is more beneficial for the customers and this helps them to attract more and more customers. Cole’s supermarket has the strategy to grab more customers for their organization is to provide superior quality of products at a low cost. They also do not provide a limited brand for their product which actually attracts customers as they are able to get good quality of product from this supermarket. Cutting down the price is the best policy that Coles used for their supermarket so that more and more customers are attracted towards their product and services.
The principles for being the good strategic leadership is to distribute the responsibility equally, always be honest as well as open about the information, provides the access to the other strategies, develop opportunity, a creation of the multiple paths for raising ideas, etc. From analysing both the companies it can be said that both have a quality of being a good strategic leadership but analysing the present status of Woolworth it can be said that Coles has a better strategic leadership for their supermarket (Fleisher, and Bensoussan, 2015).
The current position of Woolworths is not so good as the market shares of this company is gradually decreasing and for that Coles got the preceding lead to the market (Akbar, and Ahsan, 2014). From the figure below it is clear that at present the market position of Woolworths is not so good and they are having a reduction in their market price also. In the core competencies, it is also clear that the Woolworths is facing a huge problem in their supermarket filed.
Figure: Woolworths vs. Cole’s data
Conclusion
Woolworths and Coles both are the famous supermarkets of Australia and both of them together holds almost 80 percent of their market shares. This paper concludes that Woolworths at the present time is facing a loss in the market share and for that Coles is getting the lead to spread their market in Australia. Both the company play with great strategy and it can be understood from their resources and capabilities as well as from their business strategies. Woolworths made new strategies to attract more customers for their grocery stores. The company is presently upgrading their business so that they are able to compete in the market and for the future growth they are in the strategic planning of their products and other services. Coles and Woolworths both the company is the leading competitors and provides the best quality of products with varieties of offers and discounts on their products.
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