Per an IBISWorld report, the Australian Supermarket industry is one of the most fiercely competitive industries in Australia. Although, good news joins that last statement; over the next five years, projected through the reporting period of 2021-2022, industry wide revenue is projected to grow at an annualised rate of 2.9%. This translates into roughly 121.3 billion dollars.
Accompanying the growth in revenue are growth in population and growth in disposable income. The population increase in Australia is forecasted to hover around 1.9% over the next five years. This combined with real household disposable income hovering around 1.9% as well should be music to our ears. Consumers are becoming more health conscious which means there should …show more content…
This has caused Woolworths and Coles to slash prices as well to remain competitive. One could argue that ALDI is borderline engaging in predatory pricing. This is a tactic where a company slashes prices so low, often, below their marginal cost, to drive other companies out of the industry or to create barriers to entry within the industry. The idea is after the competition is gone, a company can slowly increase prices and keep the threat of predatory pricing to force competition to refrain from entering the industry again. However, ALDI is still maintaining a solid profit margin on their goods. In response, Woolworths and Coles have slashed their prices as well to try to regain some of their market share, but it is hurting their …show more content…
The employees would constantly greet their customers with a genuine smile on their face. I would suggest finding a place in the competitive supermarket industry by providing better service and reasonably priced items relative to the going rate on the retail market.
Cutting direct costs will be difficult, but bringing in a consultant on supply chain management would be the ideal situation. This consultant would find flaws in our current process and would provide insight on how to correct the flawed methods. The same can be said of indirect costs. Lowering the fixed overhead while maintaining scaled growth would be the ideal situation.
It is imperative for the company to stay on top of what is going on in both the macroeconomic and microeconomic realm. Econometric techniques can also be employed to provide regression analysis on forecasted numbers. Using a statistically adjusted engineering approach would be my recommendation when using econometric techniques. It allows the independent variables to interact with one another to forecast the dependent variables. For example, it would allow population growth and household income to interact with one another to help predict forecasted
Accompanying the growth in revenue are growth in population and growth in disposable income. The population increase in Australia is forecasted to hover around 1.9% over the next five years. This combined with real household disposable income hovering around 1.9% as well should be music to our ears. Consumers are becoming more health conscious which means there should …show more content…
This has caused Woolworths and Coles to slash prices as well to remain competitive. One could argue that ALDI is borderline engaging in predatory pricing. This is a tactic where a company slashes prices so low, often, below their marginal cost, to drive other companies out of the industry or to create barriers to entry within the industry. The idea is after the competition is gone, a company can slowly increase prices and keep the threat of predatory pricing to force competition to refrain from entering the industry again. However, ALDI is still maintaining a solid profit margin on their goods. In response, Woolworths and Coles have slashed their prices as well to try to regain some of their market share, but it is hurting their …show more content…
The employees would constantly greet their customers with a genuine smile on their face. I would suggest finding a place in the competitive supermarket industry by providing better service and reasonably priced items relative to the going rate on the retail market.
Cutting direct costs will be difficult, but bringing in a consultant on supply chain management would be the ideal situation. This consultant would find flaws in our current process and would provide insight on how to correct the flawed methods. The same can be said of indirect costs. Lowering the fixed overhead while maintaining scaled growth would be the ideal situation.
It is imperative for the company to stay on top of what is going on in both the macroeconomic and microeconomic realm. Econometric techniques can also be employed to provide regression analysis on forecasted numbers. Using a statistically adjusted engineering approach would be my recommendation when using econometric techniques. It allows the independent variables to interact with one another to forecast the dependent variables. For example, it would allow population growth and household income to interact with one another to help predict forecasted