The report provided focuses on the key aspects of the competitive dynamics of the three companies named Coles, Woolworths and ALDI. It has been found that the companies Woolworths and Coles have been the biggest competitors and the retail industry dominators in Australia. Both of these companies are on the constant practice of outpacing each other and focus on maintaining the momentum of their market dominance. With the entry of the new retail organisation ALDI, they have been finding it difficult to gain a place in the retail industry of the company, and it has been said that Woolworths would continue to outpace these companies due to the high quality of their services and products.
The firms that are operating in the same market and are operating the same kind of products and targeting the same kind of customers are known as competitors. The case study of Australian Supermarkets has been chosen to focus on the understanding of the competitive dynamics, which would allow in forming an opinion on the extent of the rivalry going on among the biggest supermarket chains of the country such as Coles and Woolworths.
They have great dominance in the Australian market, and thus, this report will focus on their dynamics with their competitors and the ways they use to improve their marketing strategies.
Hence the retailers and the prominent supermarket chains in the country are facing a huge amount of competition. Initially, the competition was mostly between the companies Coles Supermarket chain and Woolworths Group. Both of these companies have managed to gain a competitive advantage on the domestic level and have gained the loyalty of the customers as well. Both of these companies have also managed to ensure their presence in some of the most remote towns to make their products more accessible and increase their customer base on a wider scale (Chen and Miller, 2015). With the entry of the new competitors, it is relevant that the companies would probably have to make some changes to maintain their market dominance and articulate the business in the same manner as usual.
A brief overview of the performance of ALDI
Both the companies Coles and Woolworths are the giant competitors in their home, and the competition between them is so intriguing that one does not let the other to go ahead of them. Hence the supply chain management of these markets is very stiff and functioning as well. Hence in the currents scenario, ALDI is trying to gain some market share in Australia and is looking forward to enticing potential employees with the bait of multiple workplace benefits.
Present Competitive Dynamics
The company also ensures its operations in places where it is easier for the people to access the products (You and Barry, 2016).
Since in the recent case, ALDI has accused both the supermarket chains of using their shopping lease agreements to control their tenancies by demanding a huge amount of reduction in a rental if a competitor is being provided with access.
Value of Products/Services
Therefore it is of prime importance to the company to understand the value of the products to their customers. Therefore understanding the needs and requirements of the customers would allow the company to identify the different components of their businesses that the people find admirable. Since all of the products of the three different companies have their value.
Some of the primary reasons why the company has been able to gain market dominance are because of the following:
- High standards of food safety
- The stores of close to home
- The stores are tidy and organised
- The trading hours are properly scheduled and organised
- The prices are convenient, and the quality of the products are good as well
- The company generates the fresh fruits and vegetables from the farmers
- Sustainable practices
Therefore the above factors indicate that there are enough reasons for the company to gain popularity among the customers. However, the other companies such as ALDI and Coles have not been able to gain much market dominance as Woolworths. Since it has been found that 12% of the country’s fruits and vegetables are being sold at Woolworths. The company abides by the voluntary code of conduct in for maintaining a sustainable relationship with the suppliers.
Hence the report presented above provides with the idea of competition that might occur in multiple industries and among various companies. Hence the report cited the importance of understanding the difference between competitive dynamics and competitive rivalry. The competition between the two companies has been going on for decades, and ALDI has not yet been able to be a part of the competition due to their limited expansion of stores and operations across Australia. Due to the competition already existing between Coles and Woolworths, the marketing strategies of ALDI has turned out to be ineffective. The company Woolworths has been able to gain an advantage in the market due to the value of their products and services that generated a substantial amount of customer attention.
List of References
Business Insider Australia. (2017). Hot competition is back in Australian supermarkets. [online] Available at: https://www.businessinsider.com.au/hot-competition-is-back-in-australian-supermarkets-2017-10 [Accessed 17 Sep. 2018].
Chen, M.J. and Miller, D., 2015. Reconceptualizing competitive dynamics: A multidimensional framework. Strategic Management Journal, 36(5), pp.758-775.
Egan, C. (2008). Aldi slams competitors. [online] The Sydney Morning Herald. Available at: https://www.smh.com.au/national/aldi-slams-competitors-20080629-gdsk1n.html [Accessed 17 Sep. 2018].
Geyskens, I., 2018. 18. Retailer power in the grocery industry. Handbook of Research on Retailing, p.399.
NewsComAu. (2018). Why Woolies is beating Coles, Aldi. [online] Available at: https://www.news.com.au/finance/business/retail/why-woolworths-is-beating-coles-and-aldi-in-australias-ongoing-supermarket-war/news-story/7c0e1ea754035499f71e6364b465345e [Accessed 17 Sep. 2018].
SmartCompany. (2015). Coles and Woolies: super heroes or bad guys? – SmartCompany. [online] Available at: https://www.smartcompany.com.au/finance/economy/coles-and-woolworths-super-heroes-or-bad-guys/ [Accessed 17 Sep. 2018].
Sutton-Brady, C., Kamvounias, P. and Taylor, T., 2015. A model of supplier–retailer power asymmetry in the Australian retail industry. Industrial marketing management, 51, pp.122-130.
You, K. and Barry, M., 2016. Intra-industry competition among employer associations: a case study of the retail sector. Labour & Industry: a journal of the social and economic relations of work, 26(2), pp.120-137.