Australian Supermarkets Acquisition and Structure

Document Type:Thesis

Subject Area:Management

Document 1

com. au (2018) and other reputable sources. The giant players in this industry keep competing and lowering the prices for Australian supermarkets, with the prices for good and nonalcoholic beverages decreasing by 0. 7% by September 2017. On the other hand, Australia’s Consumer Price Index has recorded the growth of about 1. Whereas the largest supermarkets, including Woolworths, Coles, IGA and ALDI, dominate in revenue, the smaller ones such as Foodworks find it difficult to remain in competition. The supermarket industry is one of the most enormously competitive industries in Australia, together with the grocery stores. For the past five years, ALDI has grown in popularity, majorly owing to its discounts in private-label products. This has resulted in the two giants, which dominate the grocery retailing industry in a very spectacular way, being forced not only to lower their prices but also expand the ranges of their private-label products.

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Because the players have reduced the prices and accepted lower margins in order to remain competitive, industry-wide profit margins have dropped over the past five years (Bankwest, 2018). The players tend to possess enormous sets of resources that resemble both tactical and strategic actions taken fast. As this is essential to survive in the industry for a long time, the players have no other option but compete in the shared market (Akhtar, 2016). However, any competitive advantage a player had in the industry is but for a short time. Coles and Woolworths have a strong corporate backing through Wesfarmers and their corporate group respectively. Any possible buying experience in each passing da, ranging from groceries to general merchandise and alcohol, are covered by these two major supermarkets.

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Actually, The IGA group can best compete only in marginal areas. ALDI's strategy is offering lower cost thus running a more different model. Although the market share is constantly being increased, it cannot compete for the primary locations which are Coles' and Woolworths’ principal resources (Gunarathne, 2015). Coles, currently, is on a program formulated to win back customers, including slashing prices as well as cutting down the number of brands on shelves. In one strategy briefing, Wesfarmers said that Australia is still an attractive market in spite of the household budget being under pressure. As this is a very competitive market, they intend to keep on investing in value, fresh food quality, innovation and market leading service. This way they stay at the top despite competition.

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On the other hand, Woolworths outlined its strategy to win the trust of its customers through low prices and improving every aspect of shopping experience. Placing their customers at the beginning of everything they do is another strategy to increase the share of the amount spent by customers on products as well as extend their leadership. This strategy is expected to lower prices, enhance superior freshness make offers more compelling and improve innovation (Grimmer, 2017). This helps them know what works well and where they need to work harder to improve customer experience (Grimmer, 2017). Furthermore, Woolworths Customer Talkback is an initiative where customers focus groups are held throughout the country. This gives customers a chance to give their feedback directly to their store thus providing a better understanding of what they like and what Woolworths need to improve.

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To add, Woolworths made a few changes that can make bigger improvements including better bag packing, larger bags at self serve checkouts, more half sized trolleys, up-to-date store directories in every aisle and improved information on fresh food seasonality. Lastly, they keep track of trends to ensure better brands and products are provided (Phillipov, 2015). ALDI should also implement the strategy of building smaller ALDI to stand out against IGA. ALDI should also take advantage of their low cost and discounts on home based brands to market their products even internationally. All Australian supermarkets should take advantage of the advancement in technology to market their products and increase profits. List of References Akhtar, S. Retail outlook: big retailers feel the pressure of new challengers.

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