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Analysis of Supermarket: Woolworths, Coles & Aldi

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Carolina Ordonez

on 26 January 2016

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Transcript of Analysis of Supermarket: Woolworths, Coles & Aldi

Introduction
• The fundamental concept of supermarket businesses is to offer a variety of products for a daily consumption of costumers.

• A significant characteristic is to provide quality of the product for the best price. (the lowest, the better )

• Grocery industry generate a high volume of cash flow to cover their operational and capital expenditure.


• Supermarket industries are competitive in Australia market even the constant challenges in the market due to the high amount in new entrants.

History of Coles, Woolworths and Aldi
Coles
• Woolworths and Coles are recognized for be the strongest leaders of the industry. Aldi became in a big challenge by the lowest prices as a German chain.

• Coles brand is recognized for be one of the biggest leaders with its roots in Australia in which 80% of the market, having Woolworths as a strong competitor.

• Coles hold 100,000 employees and has over 700 outlets in the country.

• Cole’s first supermarket was opened in Melbourne in 1960.

• In 2010, Coles created another slogan “Down down, prices are down” thinking in low prices in order to reach leadership.

Woolworths

• Woolworths is a positioned supermarket brand in Australia that hold over 870 stores.
• Woolworths and Coles brands hold been sharing the market close to an 80%, however Aldi have been challenged the leadership.

• The brand had been gaining reputation and affectioning from market and costumers denominated under a short name “woollies”
• The organization created their own Woolworths brands such as Woolworth’s “Home Brand” and “Select”.

Aldi

• Aldi is global brand across 18 countries which their original base is located in Germany. (Bird, J. 2011).

• The organization has presence with 374 stores across Australia. It also had been reaching markets in France, Denmark, and UK. Aldi counts with 10,370 supermarket across the wold. (Taya, Ganesh an, & Magazine 2012).




Strategic Differences Between the Companies
• Woolworths and Coles apply for different strategies to attract customers. Woolworths implement rewards cards, Qantas Flyer points and Coles’ Flyboys have also played a vital part in attracting customers in addition to fuel discount offers and “buy one get one free” liquor deals.

• Coles is number 1 in online shopping context.

• Woolworths do not extra charge for online shopping and had been follow to Cole’s strategy.

• Aldi beats prices presented by Coles and Woolworths by a substantial margin.

• The two brands are over 100 supermarkets, 700 service stations and close to similar amount of hardware stores in the country.

• The price difference vary from 113 for a basket at Woolworths and 114 in Coles while in Aldi could cost $87 (Wong et al 2011).

• Woolworths and Coles are implement similar strategies such as concentrates on rising the variety and freshness in fruits and vegetables of food stuff while Aldi on costs and high volume of discounts.

• Woolworths and Coles apply for sustainable advantage strategy on short period while Aldi’s strategy in prices in the long period.
• Aldi hold one brand, size and kind of product instead proposing a diversity of brands.
• Aldi is continue expanding in the Australia market in price strategy and it could reach the to the top for 85 million in supermarket industry.
• In the next 3 years Aldi can reach the 350 million dollars from the sales of Woolworths and Coles.

• . Aldi strategy focus on fixed cost advantage system to price its things.
• Woolworths and Coles have differences in reach and scope of the companies as they function on the day-to-day basis (Levchenko et al 2011).

• Woolworth’s concentrates on their slogan the fresh food people” with relevant advertisement costs while Coles implement the advertisement: “there is no freshness like Coles freshness”.

Value Chain Analysis
Due to modern consumerism major grocery players increase sales each year.

Through hard work on differentiation strategies in stores and prices, Woolworths, Coles and Aldi achieved an increase in sales; focusing its work on increasing the space platform products and other premium features like wi-fi products and pizzas and takeaway.
Woolworths, Coles and Aldi base their growth prospects depending on the ability to capitalize on the innovation in stores.
A great approach is needed to improve the customer experience, convenience and cost reduction in stores.
The marginalized in this industry area is customer loyalty. With high focus on growth, Woolworths, Coles and Aldi have made the central market price. To change this situation, Woolworths, Coles and Aldi can focus on generating other values such as comfort and quality, and the overall customer experience.

Demand Chain Analysis
In Australia a more accurate option to get more customers in the supermarket sector is the internet.

Woolworths and Aldi have used this option offering online shopping customers at no additional charge.

Coles is not as flexible in terms of prices, charges an additional fee for online shopping

The inventory is also seen as the biggest investment opportunity in the industry that results in these companies that store large quantities of products in its stores and warehouses. This protects companies of unpredictable future events.

Thanks!!
ANALYSIS OF SUPERMARKET:
Woolworths, Coles & Aldi

Chamila A.H. Wehellage 123641
Lina Arteaga 120375
Carolina Ordóñez 121895
Managing a Value Chain

Supply Chain Analysis
Coles has 24 distribution centers in Australia with more than 2,200 outlets to service the products regularly.

Coles has introduced performance indicators in order to identify areas that lack of efficiency and optimize time and transaction cycle.

Woolworths is planning to spend $ 1 billion in renovations supply chain, which reduce the cost of transport and goods throughout the country, delivering productivity gains. They also use the joint venture.

Aldi focuses on the competitive relationship rather than trade relations and maintains a strong cash flow.
Aldi’s brand value is currently about $12 billion.

Woolworths brand value is currently around $11 billion, which makes it the most valuable brand in Australia. The company is also now ranked as 109th supermarket in the world, a jump from its previous year’s ranking of 113 (Dos Santos 2011).

Coles is the fourth most valuable brand in the country with a brand value of around $8.3 billion and a global ranking of 140 (Ahi & Searcy 2013).

Enterprise Value

References
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