Growth Factors of Australian Retail Industry
Discuss About The Discovery And Coordination In Management.
The retail industry of Australia has shown high growth in the past few years. The industry has continued its growth which has been further driven by the social and economic developments. The key factors that have affected the growth of the retail industry in Australia are related to the rise in the population, the robust growth in the economy and the rise in the purchasing power of the consumers. The industry is expected to show higher growth in the future due to the high flexibility of the market. The low rates of interest have been able to provide a huge relief to the retail sectors of the country (Hill, Jones and Schilling 2014). The retail sector of the country is rising with the help of high disposable income, confidence of the consumers and the rise of the high (Wheelen et al. 2017).
The case study that will be analysed in the report will be based on the external analysis of the environment of Australia. The retail industry is also discussed in the case study based on the five forces of the Porter’s framework that affect the operations of the organizations in the country. The various organizations in the Australian retail industry provide tough competition to each other which is discussed in detail in the report. The capabilities and the resources that are owned by the organizations are also analysed in the case study. The different strategies of the three organizations are a part of the case study analysis.
The corporate strategy is based on the direction and scope of the corporation and the way by which the different business operations work in a collaborative manner so that they can achieve the goals. The corporate level strategies of the organizations are mainly based on the plans that are related to a specific target to achieve the goals of the business. The organizational structure helps in the implementation of the corporate-level strategies (Meyer, Neck and Meeks 2017).
The major corporate strategy that has been implemented by Woolworths to operate successfully in the Australian retail sector is based on keeping the customers 1st across all the brands. The main aim of the company is to build the culture based on the customers and generating the momentum in sales. The company further aims to deliver value to the shareholders by empowering the portfolio of the business (Woolworths.com.au 2018).
Case Study Analysis of Major Players
The distinctive approach of Aldi is based on the focus of its operations to provide the customers with various quality products. The organization achieves this objective with the help of the efficient operations by adhering to the core values of consistency, simplicity and responsibility. The new strategy that has been implemented by Aldi to face the fierce competition in the market is termed as “Good Different”. This strategy is based on maintaining the pressure of its competition in the industry to set its operations apart from the other traditional supermarkets (Aldi.com.au 2018).
The corporate strategy of Coles is based on the value that is provided to the customers with the help of reducing the prices of the weekly shopping basket of the customers. The organization aims at producing the best products to the customers and deliver them an easy experience of shopping in the retail markets. The values of the company are mainly known for underpinning the strategies and drive the behaviours which help them in building the long-term relationships with the suppliers. This helps the organization to provide the best experience related to shopping to the customers and create passion and care among the members of the team (Coles.com.au 2018).
The primary determinants of the profitability of the organizations is related to the attractiveness of the industry in which it has the operations. The industry generic strategies are implemented by various firms for the purpose of achieving growth in the market. The organizations try to position themselves with the help of the strengths of their operations in the market. The three types of the Porter’s generic strategies are differentiation, cost leadership and focus. The strategies are applied at the unit levels of the business. These strategies are termed as generic strategies as they are dependent on the industry (Michael, Storey and Thomas 2017).
The cost leadership strategy is based on the low cost producers who charge low amounts from the customers for their products. The prices can be same as that in the industry or lower which can help them in gaining a major share in the market. These firms are able to acquire cost related advantages by improving the efficiencies and gaining access of the low cost materials. The internal strengths of the organizations are able to assist the organizations in gaining cost advantage in the market (Morschett, Schramm-Klein and Zentes 2015).
The products or services of an organization which offer unique attributes that are valued highly by the customers are based on the differentiation strategy. The uniqueness and the quality of the products or the services are given much more importance as compared to the prices that are provided to the customers. The suppliers also tend to increase the prices of the raw materials due to the unique products that are developed by the organizations. The product development team of the organizations need to be highly skilled and creative in nature. The organizations which apply this strategy are based mainly on the innovation and quality of the products (Frynas and Mellahi 2015).
Corporate Strategies of Woolworths, Aldi, and Coles
The focus strategy of the organization mainly concentrates on the narrow segments in the entire market. These segments are further targeted by the products and the services that are offered by organizations. The segment of customers in this narrow segment is mainly a combination of the differentiation and the cost advantage based strategy. The needs of the particular group can thereby be satisfied in an effective manner by focussing the efforts of the company entirely on them (Stead and Stead 2014).
The generic strategies that have been used by Woolworths in its operations in the Australian retail sector is the focus strategy. This strategy is used by focussing the efforts on the selling of clothes and the food products. The products that are manufactured by the organization are also a major focus of their sales. On the other hand, the differentiation strategy is used by Woolworths to distinguish the services and products from the other retail organizations in the market. Woolworths has also distinguished itself with the help of its environmental friendly approach in maintain business activities (Woolworths.com.au 2018).
The customer satisfaction is created in Aldi by applying the differentiation strategy which relates to the premium range of products that are offered to a particular group of customers. The economy products are offered to the middle class customers of the organization. The cost leadership strategy is also implemented by Aldi to provide products and services to the customers based on low cost raw materials that are procured by the organization. The low price philosophy is implemented by Aldi to attract a larger number of customers towards the organization. The cost focus strategy is further implemented by Aldi in the rural and the sub-urban areas by offering them with the low price offer products (Aldi.com.au 2018).
The generic strategy that has been implemented by Coles is based on the lower prices that are offered to the customers. The loyalty programs are also formulated by the company to attract more customers towards the organization. The low prices of the services and the products of the organization are able to increase the share of Coles in the industry. The “Australia first” sourcing policy is also implemented by Coles drive the growth of fresh food and extend the concept that is based on value based leadership (Coles.com.au 2018).
International business strategies are based on the plans which guide the commercial transactions that take place between the various entities present in different countries. The international strategy refers to the actions and plans that are formed by the privately owned organizations to increase their growth and profitability. The organizations which operate on a global scale need to deal with many international entities at some point in the supply chain. The plans that are made by the organizations to deal with these international entities are a part of the international strategy that is developed by them (Durand, Grant and Madsen 2017). The methods of conducting the business activities are different for the various international areas where the organizations have their operations. The developing countries are more open to the various organizations which are planning to enter the market for the purpose of conducting their business activities (Trigeorgis and Reuer 2017). An organization which has its operations in many countries are known as the multinational corporations or MNCs. The international strategies can be divided into three different types which are, multi-domestic strategy, global strategy and transnational strategy. The organizations tend to adopt the strategy that is best for increasing their revenues and profits in the international market (Aguinis, Edwards and Bradley 2017).
Porter’s Generic Strategies and Its Implementation by Major Players
The recent international growth strategy that has been implemented by Woolworths is based on the Lean retail model. The company thereby aims at improving the experience of the customers by reducing the costs that are related to the operations of the organization in retail industry of Australia (Woolworths.com.au 2018). The key areas which will be addressed by the successful implementation of the lean retail based strategy of the organization are, improving efficiency, investing more in the customer experience related activities of the company and growing the share in the retail industry of the country. The international related strategies that have been implemented by Woolworths in the different countries are also a part of the growth of the organization (Karadag 2015).
The discount based grocery store has a long history in the Australian retail market, however the company has started growing in the recent years of its operations in the country. The organization has been successful in expanding its operations in various other countries of the world and currently has its stores in more than 18 countries. Aldi had faced an adverse situation in the global operations due to the low priced products that the organization offered to the customers. The products were considered to of low quality by the customers as the low price is often associated with low quality in the retail sector (Aldi.com.au 2018). The company thereby had to prove the worth of its products to the customers and the stakeholders to create its own position in the market. The organization has its origins in the United Kingdom. The company had planned to expand its operations in Australia and this made the company one of the biggest retail players in the country. The low pricing strategy that had been implemented by the company had finally clicked with the Australian retail customers. The company introduced new formats of its stores to start operations in South Australia and Western Australia (Engert, Rauter and Baumgartner 2016).
Coles is a major part of the Australian conglomerate named Wesfarmers which operates in the retail market of Australia. The organization has planned for its international expansion in the other countries of the world. The major strategy of the conglomerate is thereby to increase its growth in the retail market of the country. The company has concentrated its resources towards increasing the value that is offered to the customers in the stores. The increase of online operations is a major part of the international strategy that will be implemented by Coles in the retail market (Coles.com.au 2018).
Conclusion
The report can be concluded by stating that the three Australian organizations have been successful in increasing its revenues with the help of their effective strategies that have been implemented in the retail industry. The three companies however provide tough competition to each other in this sector and this huge competition further leads to the development of higher quality products to the customers. The strategies that have been implemented by the organizations are thereby different from each other.
References
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