...Name Examining the Australian Supermarket Industry under Porter’s Five-Force Model comprising of: 1. 2. 3. 4. 5. Internal Rivalry Entry Substitutes and Complements Supplier Power Buyer Power And their impact on the profitability and welfare of different stakeholders in the market. In the big bad world of inflation, “Cheap Cheap” and “Everyday lower prices” have been the only words of solace. For the past 3 generations, Australians have relied on the consistent comfort of competitively low prices at supermarkets. It is no wonder then, that the supermarket industry has caught the eye of everyone in the spectrum – economists, global retailers (like ALDI, Lidl, Walmart, etc.) and (inspections by) the regulators alike. Even though the market life cycle is developed, the outlook for the market looks positive, propelled by external factors population growth (1.6% YoY in 2014) and rise in average weekly earnings1. But the long-run duopoly in the market is witnessing a change in landscape with international competitors (like Aldi) swelling their market share in the subcontinent. This makes the supermarket industry in Australia interesting to analyse under Porter’s 5 Force Model Analysis. Defining the Market This analysis set geographic boundaries for the supermarket or grocery retail industry over the Australian subcontinent. Given their large population size and concentrated pockets of inhabitancy, supermarkets are generally populous in the states...
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...Submission to the Competition Policy Review made by ALDI Stores 10 June 2014 1. Introduction ALDI Stores Australia welcomes the opportunity to make this submission to the Competition Policy Review (the Review). Since ALDI opened its first stores at Marrickville and Bankstown Airport in January 2001, our rapid growth has meant that an estimated 4.2 million people shop with us in an average four-week period 1. Our arrival in Australia has helped redefine the retail landscape, introducing a new and higher quality standard in private-label groceries. In focussing relentlessly on delivering exceptional quality products, matching that of the market leading brands but at prices significantly lower, ALDI provides a unique alternative to the Australian consumer. Our strong sales growth is testament to customers voting with their feet and embracing the very fact that we offer something different. Despite ALDI’s successful establishment in Australia over the last 13 years, the fact is that our expansion has been considerably slower than planned due to regulatory constraints. These take the form of rigid and overly-prescriptive land use planning and zoning rules at state and local government levels that have resulted in a chronic shortage of suitably zoned land for small format supermarkets in many built-up areas. The direct consequence of this significant barrier to expansion is that fewer Australians are able to benefit from the competition, lower prices...
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...Submission to the Competition Policy Review made by ALDI Stores 10 June 2014 1. Introduction ALDI Stores Australia welcomes the opportunity to make this submission to the Competition Policy Review (the Review). Since ALDI opened its first stores at Marrickville and Bankstown Airport in January 2001, our rapid growth has meant that an estimated 4.2 million people shop with us in an average four-week period 1. Our arrival in Australia has helped redefine the retail landscape, introducing a new and higher quality standard in private-label groceries. In focussing relentlessly on delivering exceptional quality products, matching that of the market leading brands but at prices significantly lower, ALDI provides a unique alternative to the Australian consumer. Our strong sales growth is testament to customers voting with their feet and embracing the very fact that we offer something different. Despite ALDI’s successful establishment in Australia over the last 13 years, the fact is that our expansion has been considerably slower than planned due to regulatory constraints. These take the form of rigid and overly-prescriptive land use planning and zoning rules at state and local government levels that have resulted in a chronic shortage of suitably zoned land for small format supermarkets in many built-up areas. The direct consequence of this significant barrier to expansion is that fewer Australians are able to benefit from the competition, lower prices...
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...repositioning efforts have added Coles future growth. Thus, Coles create more customer focused, value driven operation and improved business performance. • Strong Market Position - Coles considered as one of the largest full line retailers in Australia. The company have more than 2,400 Supermarkets ,liquor and convenience stores in Australia and New Zealand. Coles have 450 Kmart, Target and Officeworks stores that sells apparel and general merchandise. Coles operates 750 stores across Australia with over 11 million transaction a week. • Strong Brand Name - In the Australian retailing business Coles is recognized as a strong brand name. Their housebrand product offering have increased 14% of sales year on year. For several years Coles has been a leader of private brand it also operates stores under popular brand names like Target, Kmart and officeworks. Coles brand potential attract more customers therefore strengthening its bargaining...
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...nothingAnswer No 3 Retail food industry of the Australia has been changing over recent decades, affecting consumers, suppliers and traders. These changes have increased the efficiency of different aspects of the retail food industry. Shifts in market power, change in customer’s preference and taste, change in demographic population and industry concentration in food retailing could also have an influence on further capturing the potential efficiencies in this sector. The Study conducted by Andrew J and Don G (2005) shows that retailing food industry in Australia covers roughly 46 per cent of the food industry Australian food industry was stimulated after the Second World War. The industry advanced rapidly due to the new and urgent demand for unfamiliar service rations to precise specifications. Existing technologies were reorganized and additional ones developed. Scientific wartime innovation gave rise to improved processes, products and product applications. Today the food industry is a vital component of the Australian economy. The industry makes a significant contribution to the economies through employment, business and service opportunities. Many new industries were inaugurated in the late 1980s and 1990s to take benefit of emerging market opportunities. The trends on Supermarket and grocery store market concentration The Australian Competition and Consumer Commission (2005) reported that the national grocery market shares of Woolworths, Coles and Franklins raised 40...
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...* APP update for ALDI * ` * Executive Summary This report involves how information system solves the issues experienced by a leading global supermarket chain and how the proposed plan will be enforced its targets of capturing more market shares and increasing company’s profits. Firstly, our team will describe the main problems to be confronted by ALDI. Then the goals and objectives of the project will be clarified, and the crucial factor for business future development is also listed. The following sector offers a full view of the business case. Specifically, this part contains the reasons and motivations for exploiting the new project, and the business case organizer. Additionally, the relevant environment conditions are described from several aspects in detail. Meanwhile, the current situation and opportunities are analyzed via SWOT model. After that a detailed description of assumption and obstacles about present condition and future projects is shown. Next, we provide two feasible options for ALDI, and we adopts several elements and methods to weigh both options. Then a constructive and enforceable recommendation and opinion is given through previous analysis. Finally, the implementation strategy of project will be identified briefly. * 1. Introduction Nowadays, online shopping in brick-and-mortar stores is a common consumer practice. Mobile devices, especially smart phones, have become a key tool for web shoppers (Turban, Volonino and R. Wood...
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...1. Currently, the food retail industry is a highly competitive market in Australia as a great number of retail supermarkets are competing for the largest market share in this market, with giant retail companies such as Woolworths, Coles, IGA and Aldi sharing the main market. More so than ever, organizations need to offer customers value for money. Customers want the best quality products at the lowest possible prices. With such tough competition it is vital for organizations to understand what their customers want. Strategy management refers to the process of identifying, choosing and implementing activities that will enhance the long-term performance of an organization by setting direction, and by creating ongoing compatibility between the internal skills and resources of the organization, and the changing external environment within which it operates. Strategy competitiveness illustrates company’s outstanding competitive edge compared with its competitors due to the use of successful and suitable business strategy in terms of the business management, this is achieved when a firm successfully formulates and implements a value-creating strategy. Aldi has a no-nonsense approach to running its business. Whereas other food retailers have elaborate displays, additional services and promotions that draw customers into the business, Aldi’s core purpose is to ‘provide value and quality to our customers by being fair and efficient in all we do’ . Everything Aldi does is focused around...
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...Canstar Blue’s Most Satisfied Customers Award – Supermarkets for the third time in four years. It is also the fourth consecutive year the discount supermarket chain has received a five star rating from the Australian public for offering value for money. Of the other supermarkets mentioned in the study, Foodland received five star ratings for quality of products, customer service and accessibility of staff, layout of store, and freshness of fruit, vegetables and meat. Coles earned top marks for quality of products, range of products, customer service and accessibility of staff, and layout of stores, and Woolworths saw five star ratings for range of products and layout of stores. The Canstar Blue survey, of 2500 Australian adults, shows that 53 per cent are loyal to their supermarket. Of those, 66 per cent cited familiarity with the store as the main reason for their loyalty, while 56 per cent said it was closest to their home and 53 per cent said they have a loyalty card and enjoy collecting reward points for their loyalty. About a third of respondents (35 per cent) also said they prefer the products they buy there to any other supermarket. Sixty five per cent of survey respondents believe their usual supermarket offers the best value for money, while 58 per cent find the quality of supermarket private label brands to be as good as the big brands and 46 per cent believe they could get their groceries cheaper at a different supermarket but prefer the convenience of the one they...
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...BE PHOTOCOPIED OR DISTRIBUTED. Woolworths Limited TABLE OF CONTENTS TABLE OF CONTENTS Company Overview..............................................................................................3 Key Facts...............................................................................................................3 SWOT Analysis.....................................................................................................4 Woolworths Limited © MarketLine Page 2 Woolworths Limited Company Overview COMPANY OVERVIEW Woolworths Limited (Woolworths or 'the company') owns and operates retail stores that sell food, liquor, fuel, general merchandise and home improvement products in Australia and New Zealand. It is headquartered in Bella Vista, Australia, and employs more than 197,000 people. The company recorded revenues (excluding financial income) of A$58,921.7 million (approximately $60,506.7 million) during financial year ended June 2013 (FY2013), an increase of 6.9% over FY2012. The operating profit of the company was A$3,594.6 million (approximately $3,691.3 million) during FY2013, an increase of 7.4% over FY2012. The net profit was A$2,259.4 million (approximately $2,320.2 million) in FY2013, an increase of 24.4% over FY2012. KEY FACTS Head Office Woolworths Limited 1 Woolworths Way Bella Vista New South Wales 2153 AUS 61 2 8885 0000 Phone Fax Web Address http://www.woolworthslimited.com.au Revenue / turnover 58,921.7 (AUD Mn) Financial...
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...outcome for countries and nations. Globalisation encourages international partnership but extraordinary cognitive skill in risky decision-making required for domestic competitiveness. In Australia, competition is one of the key priorities in Business strategies for long-term success. Thus to be competitive in the market, it is crucial for Malaysia Giant Company to study the Australian business external environmental factors. The three most relevant macro environmental factors that will affect Giants discussed below. ECONOMIC FACTORS Businesses analyses economic factors and its determinants as they play a vital role in determining where an economy might move. These economic factors are not limited to economic phenomena such as tax policy, inflation and many more (Ho 2014). In February, Reserve Bank of Australia (2016) highlighted the economic growth in 2015 is a bit low on average compared to previous years. However, the Supermarket and the Grocery Market Revenue is projected to increase by 2.5% in 2015-16 (IBIS 2016) and 82% of the supermarket expected to get more earning (Delloite 2016). Since these factors affect Giant’s success, Giant should study the factors and draw strategic plans accordingly for a successful business. Firstly, since there is a fierce competition in Australian supermarket and grocery Industry, a success of a new firm will be highly impacted, as market share will be shared among competitors whilst prices dropped as, more suppliers supplying closely substitute...
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...Introduction ALDI is a German discount retail chain which has entered the grocery market in Australia since 2001. ALDI provide low prices but high quality groceries to consumers. Although there are two major retail grocery chains which are Woolworths and Coles in Australia, ALDI has becomes another force by its low price products. This critique will analyse both micro and macro marketing environment. It will then demonstrate the current marketing approach of ALDI in Australia and redesign its marketing mix by 7Ps. The last, it will outline several recommendations. 1 Marketing Environment Analysis – Micro Trends 1.1 Trend One: Competitors A firm need to provide more consumer satisfaction than its competitors if it desires to be successful. Therefore, marketers need to modify the market strategy for the target customers. Each company should consider its position and size which are compared to its competitors (Kotler & Armstrong, 2012, p. 92). ALDI, the German discount store chain, intended to enter Australia market in 2001, they have to attract Australian customers’ attention and encourage consumer to purchase products in ALDI (ALDI, 2013). There are two major competitors of ALDI, including Woolworths and Coles, they have been occupied the top of Australian retailers for few decades in Australia. In addition, Australian brands are lack the capability of competitive and Australia was a monopoly market until 2005 (Ritson, 2013, para. 6). For this reason, ALDI must have more...
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...spending on clothing increased by 12.5% between 2006 and 2010, which was slightly below the rate at which overall consumer expenditure increased (12.9%). In 2010, it was estimated that the clothing retailing market was worth £41.9bn, which was the highest value seen over the review period. Key Note believes that supermarkets have increased their share of the clothing market, now accounting for around 25% of the total market. Supermarket retailers have witnessed a large increase in sales since the recession, as consumers became more cautious about unnecessary spending, and turn to cheaper alternatives available in the supermarkets. There has also been a decline in specialist companies operating within the clothing retailing industry, with figures from National Statistics indicating that, in 2010, there were 11,800 shops, compared to 12,700 in 2009; this represents a 7.1% decrease over the course of that year. This phenomenon is visible in many UK cities, where an increase in empty high-street shops is apparent. Many independent shops were forced to exit the market after the recession, as they could not compete with the larger well-known retailers and supermarkets. The cost of clothing is expected to rise, shaping the industry over the forthcoming years. On the 4th January 2011, VAT increased to 20%, while the rising cost of cotton will continue to increase the retail price of garments. Other issues, such as the weak pound affecting imports and the costs of...
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...6 4.1.3 Social and cultural factors 7 4.1.4 Technology factors 8 4.1.5 Environmental Factors 8 4.1.6 Legal factors 9 4.2 Key Trends affecting the industry 9 5. SWOT Analysis 10 5.1 Strengths 10 5.2 Weaknesses 11 5.2 SWOT Table 12 6. Identification and evaluation of the Strategies pursued by Aldi 13 6.1 Strategies implemented by ALDI 13 6.2 Critical Evaluation of the Strategies 14 7. Conclusion 16 8. References 16 1. Introduction Albrecht Discount Inc., globally known as Aldi, is a German based family owned global discount chain of supermarkets. Aldi constitutes of two independent groups, that are Aldi Nord (North) and Aldi Sud (South) legally and economically independent but family related (Aldi Sud Business, 2013). It is the market leader in the industry of international grocery retailing and owns and operates chain of discount grocery stores in Europe, Australia and United States. It’s stores retail and supply general merchandise and food including meat products, fresh meat, frozen and refrigerated foods, sweets and snacks, dairy and bakery products, beverages and pantry items in addition to home care and personal care products (Report Linker, 2013). In the present Aldi Inc.’s strategic analysis is carried out to identify and evaluate its strategies against its business environment to critically analyze whether the strategies pursued by Aldi are effective in maintaining its market leader position or not. In doing so environmental analysis...
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...Woolworth is a household brand in Australia. The company operates in the retail industry and is one of the two largest supermarket chain store operators. The other one is Coles. Woolworth has a long business history. The company was founded in 1924 and has now grown into a retailing giant. The company has 197,111 employees all across the nation and serves almost every Australian. As the largest chain super market operator in Australia with long history, the influence of Woolworth’s business operation extends far beyond the profit made for shareholders. Rather, the company has become an important member of the society and functions strongly as a service provider for access to groceries. This report identifies five most important aspects of Woolworth’s non-financial achievements which would be discussed in details here. Contribution to Local Market Operation Woolworth plays a vital role in the local market operation and improves the market efficiency. This could be explained from three perspectives. Firstly Woolworth directly creates jobs and provides employment. Secondly Woolworth sources most of its supplies from local suppliers and contributes to local economy development. Thirdly Woolworth is committed to provide affordable and high quality products to Australian customers to transfer value to customers. Contribution to Community Woolworth highly values the relationship with community in which it operates and continues to invest in support to our communities. Woolworth...
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...TESCO PLC is a British multinational grocery and general merchandise retailer. It is a third largest retailer in the world. It has stores in 12 countries across Asia and Europe and is the grocery market leader in the UK, Ireland, Hungary, Malaysia, and Thailand. Mission Tesco’s business was built with a simple mission – to be the champion for customers, helping them to enjoy a better quality of life and an easier way of living. This hasn’t changed. Customers want great products at great value which they can buy easily and it’s Tesco job to deliver this in the right way for them. That’s why we’ve chosen ‘Serving Britain’s shoppers a little better every day’ as the new core purpose. As a business, serving customers is at the heart of everything we do – from colleagues in its stores to those of its in supporting roles. In the UK, Tesco serve some 66 shoppers every second, so it’s Tesco goal to ensure every one of those customers experiences just a little better service on each visit. PESTLE Using PESTLE analysis to analyse to business environment of Tesco. Political Many governments encourage retailers to create more career opportunities for the domestic population. So Tesco plays its role in providing employment opportunities, it also increases the demand for its products and diversifies its workforce. Economic Tesco is concerning any changing in policies, such as taxation. Although Tesco is growing internationally, it is still concern the UK market where it has...
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