Discuss about the Marketing and Strategy Plan Of Coles Group Limited.
The main aim of this report is to describe the issues in four factors related to the business environment. It is required for the management to focus on the internal as well as external factors that can impact the business. The purpose of this report is to understand the positive as well as the negative effect of business environment on an organization to become an idea regarding the functioning and the management of the business environment. There is a number of factors that can influence the success of the business that is why it is required for the business to be alert against them and take appropriate actions (Temporal, 2011). The discussion will be made on major factors of the relevant responses to the different kinds of factors that may impact the environments in which the business operate. After that, comprehensively respond will be made with an explanation to all of the environmental risks and challenges laid out in the previous assignment.
Coles Group Limited is a giant retailer in the Australian Market that provides high-quality products and services to the people. However, it has the ability to remain in the competitive market and gain the competitive advantages but there are some issues and risks that can affect the growth of the company significantly. The previous assignment had described the political, economic, social, legal, technological and environmental risk in the context of the company and this assignment will help in providing the solution of those risks so that the company can take initiative in order to make improvement in the environment of business in which they operate. This report will specifically deal with the environmental risks to Coles Company as relevant at this point in time. The mitigation strategies will be introduced under this report.
Pestle Analysis
Economic factor
It has been found that the expenditure over consumption is reduced due to downfall in the Australian Market. the nature of consumer behaviour towards purchasing become more price sensitive and that is why the retailers company needed to make amendments in the pricing strategies so that the customer of the Australian market can spend on shopping. Along with the bargaining power of the supplier is reduced due to the duopolistic market, as they are not able to find any other intermediates in the market.
Responses
Political and legal factor
The management of the company has not encountered any barriers of the political factor expect the logistic adherences to the rules and regulations governing the sector. As it has been discussed in the previous assignment, the Australian government has introduced strong regulation to prevent the formation of a cartel in the Australian market. Due to this reason, the consumer market also decreased the entry barrier by different measures to lower the competition hence it has increased the chance of entry of the new players in the same industry.
Technological factor
The Coles Group has involved in the latest technology as it started to do contactless payment to ensure the secured and cashless transactions, which amplify the propensity of spending of its customers (Wu, Neal, Trevena, Crino, Stuart-Smith, Faulkner-Hogg & Dunford, 2015). The customer convenience is an important factor for the company that is why it has introduced the self-checkout facilities in their outlet.
Social factor
It is the major factor that contributes in the success of the company as it has been discussed it the previous assignment that over 100 year Coles Group operating in Australia retail market and perform in well manner with corporate social responsibility. It has been found that the company did a partnership with WWF-Australia in 2011 for the purpose of improving the sustainability of the second supply chain in Australia.
Environmental factor
The company has taken the various initiative in order to make the eco-friendly environment and that is why the company is targeted to the greenhouse emission issue and works to reduce greenhouse emission. To reduce the impact of the carbon footprints, they have introduced package free sustainable products.
Bargaining power of buyers: homogenous products are mostly offered by the Australian supermarket which has the nature of low switching costs between stores. It showed the high bargaining power of buyers, with the exception of the stores modifying their offering to a specific market.
Bargaining power of suppliers:
The bargaining power of the suppliers is significantly dependent upon the brand names of the supplier and the size of the supermarket. There is an example of the British America Tobacco and Coca-Cola that are suppliers who enjoy strong power in the supermarket. Thus, the bargaining power of the supplier is high to moderate in Australia supermarket industry.
Industry substitutes
There is a number of substitutes available in the market of this company such as pharmacies, online stores, groceries store, fresh food markets and delicatessens. It ahs been found that the customers are willing to pay a higher rate for the convenience.
Threats of new market entrants
The threat of new entrants in the market is moderate because of the low price in Australian retail shop and supermarket, it is not an attractive industry to enter with a low-profit potential. The bonding with the big players with the suppliers of owns distribution centers by the new entrants can be the barrier for the company (Gereffi & Fernandez-Stark, 2016).
Rivalry among competitors: The rivalry between competitors in the supermarket industry is strong.
Description of the company
Coles Group limited commenced the business in 1914 and become one of the biggest supermarket retail chains in Australia. the main function of the company is operating the retailing and the departmental stores. There are more than 99,000 workers are employed in this company that operates their diversified business, initiating from retail products of food and liquor to online merchandise. The current amount of revenue earned by the company is around $38 billion annually (Coles Supermarkets Australia Pty Ltd. 2016).
Main risks of Coles
It has been found with the help of the previous assignment that there are many risks encompass in the company that can hamper the position of the company in the competitive market. these risks are mentioned below:
Government regulatory and economic policy
The changes in the government policy can influence the entire industry of retail that can affect the revenues of the Coles company. it has been found that the Coles Company is facing legal challenges from over a period now. The company is not concerned towards their legal matters which may lead the company into an adverse situation (Hilton & Platt, 2013).
Brand identity
The brand identity is the major aspect of any kind of businesses and it is necessary for the company to have the effective strategy so that the brand identity of the company can be maintained in the market (Vidaver-Cohen &Brønn, 2015). The company was involved in the false advertising in which the company has been recovered guilty over false shoppers with claims that the ingredients of making bread were “baked today” through the Federal Court. It has been analyzed that the products were promoted as “Baked Today, Sold Today” while the fact is that to some extent baked and frozen off-site by the supplier, finished and transported at in-store bakeries within Coles Supermarkets.
Growing competition
The competition is growing rapidly and there are various companies that are well established and have become the competitors for this company. Along with that threat of new entrants can be another risk for the company (Weber, Fenchel & Scholz, 2008).
Management issues
It is essential for the company to have the effective management in order to handle the conflicts and because of lack of management ability; the company has the risk of scattered.
Customer behavior
The customer behaviors are entirely dependent upon the quality of the products and services as well as the way of treating the situation with the customer by the management (Manuj & Mentzer, 2008). The image of the company can affect the customer behaviour towards purchasing the products as it has been discussed that the company is facing legal issues and image of the company is affected due to false advertising.
Risk management
Risk management is considered as the process of identifying the potential risks and analyze the issues in a significant manner. The framework of risk management entails five processes such as identity, measure, manage, monitor and report. Coles Supermarket should make the risk management that should be capable of risk identification. The use of key performance indicators is taken to measure and monitor the strategies of the business and the business operation. Performance measurements give the information on the gaps between actual targeted performance and the actual performance (Tang & Musa, 2011). It can be taken in use in order to determine the effectiveness of the organization and the operational efficiency.
There are many risks are identified in the context of Coles company and it is required for the company to take appropriate action so that these risks can be eliminated from the process. The deliberation of the risk management for the consumer can occupy viability risk, design risk, funding risk and commercial risk. With the help of the risk management cycle, the risk can be identified in an appropriate manner that entails in the system of the Coles Company.
Risk mitigation is elaborated as taking steps to decrease adverse consequences. There are major four kinds of mitigation strategies that hold an effective business continuity and disaster recovery. It is vital for the business to improve the strategy that nearly connects to and go with the company’s profile.
Risk avoidance
Risk avoidance is the exclusion of some risk through brings changes in the parameters of the working environment. It seeks to configure again in the tasks such that the risk in question invisible or is decreased to an acceptable value (Webster, 2016). It helps to prevent the effect of one risk to the entire organization and the productivity of the employees (Schenkelberg, 2018).
Risk control
Risk controls consider anticipating a risk but taking effective steps in order to reduce or manage its influences. It is the form of the installing data gathering or early warning systems that give information to assess more effectively the likelihood or timing of a risk. There is an example of the risk control method that is to evaluate the technological development of highly technical one-of-a-kind projects (Braunscheidel & Suresh, 2009). Management control and brand identity is the major risk which should be controlled by the company within the appropriate time.
Responding to the level of uncertainty
The level of uncertainty should be respondent by the company in an appropriate manner there are some illustrations of flexible decision making that can help alleviate risks under circumstances of uncertainty. Defer some decisions, restructure the work process, stage the project, change the scope and analyze the effects of the strategic decisions (Thompson, Isin, Li, Weaver, Weidolf, Wilson & Kenna, 2011).
Conclusion and recommendations
It can be concluded that the role of the marketing strategy in the company is great as it helps in amplifying the revenues of the company. The report has been made as per the previous assignment by taking Coles Company. The pestle analysis and the five force model have been discussed in this paper to elaborate the risks of the company. Risk management is an essential concept for the company as it helps in identifying the risks.
It has been recommended to the Coles Company to work on risk mitigation strategies so that the company can reduce the level of risks and increase the productivity of the employees. There should be a proper structure for the compliances so that every employee of the company follows the rules and regulations without breaching them. Customer behavior is the important aspect for the growth of the company that is why the company should implement the training session in which the dealing with customer criteria can be entailed in a sophisticated manner so that the customer loyalty can be maintained.
References
Braunscheidel, M. J., & Suresh, N. C. (2009). The organizational antecedents of a firm’s supply chain agility for risk mitigation and response. Journal of operations Management, 27(2), 119-140.
Coles Supermarkets Australia Pty Ltd. (2016). Coles: 2016 Years in Review. Retrieved from https://www.coles.com.au/~/media/files/coles/pdfs/2016/annual%20report/coles_year_in_review_2016.pdf needs and wants of Coles’ customers
Gereffi, G., & Fernandez-Stark, K. (2016). Global value chain analysis: a primer.
Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
Hilton, R. W., & Platt, D. E. (2013). Managerial accounting: creating value in a dynamic business environment. McGraw-Hill Education.
Manuj, I., & Mentzer, J. T. (2008). Global supply chain risk management strategies. International Journal of Physical Distribution & Logistics Management, 38(3), 192-223.
Schenkelberg, F. (2018). 4 Effective Risk Mitigation Strategies. . Retrieved from: https://accendoreliability.com/4-effective-risk-mitigation-strategies/.
Tang, O., & Musa, S. N. (2011). Identifying risk issues and research advancements in supply chain risk management. International journal of production economics, 133(1), 25-34.
Temporal, P. (2011). Advanced brand management: Managing brands in a changing world. John Wiley & Sons.
Thompson, R. A., Isin, E. M., Li, Y., Weaver, R., Weidolf, L., Wilson, I., … & Kenna, J. G. (2011). Risk assessment and mitigation strategies for reactive metabolites in drug discovery and development. Chemico-biological interactions, 192(1-2), 65-71.
Vidaver-Cohen, D., &Brønn, P. S. (2015). Reputation, responsibility, and stakeholder support in Scandinavian firms: A comparative analysis. Journal of Business Ethics, 127(1), 49-64.
Weber, O., Fenchel, M., & Scholz, R. W. (2008). Empirical analysis of the integration of environmental risks into the credit risk management process of European banks. Business Strategy and the Environment, 17(3), 149-159.
Webster, L.R., 2016. Risk Mitigation Strategies. In Controlled Substance Management in Chronic Pain (pp. 163-180). Springer, Cham.
Wu, J. H., Neal, B., Trevena, H., Crino, M., Stuart-Smith, W., Faulkner-Hogg, K. & Dunford, E. (2015). Are gluten-free foods healthier than non-gluten-free foods? An evaluation of supermarket products in Australia. British Journal of Nutrition, 114(3), 448-454.
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