Introduction
A company’s strategy is the set of actions that its managers take to outperform the company’s competitors and achieve superior profitability (Thompson et al 2016). In other words, a company must have a well-planned strategy if it aims to gain competitive advantage in its industry. The top level managers are the ones who usually make strategic decisions and they are constantly looking to gain company’s success and profit in the long run. Managers of every company must be keen and prepared to alter the strategy in response to changing market conditions, technological advancement, unforeseen changes in competitors, changing consumer needs and emerging market opportunities. They should also look for new ideas to improve the existing …show more content…
Industry
In Australia, major players in Grocery industry are Woolworths, Coles, Metcash and Aldi. The main activity of this industry involves operating supermarkets and grocery stores trading a range of groceries and food products, including fruit and vegetables, bread, cigarettes, canned goods, toiletries, dairy goods, delicatessen items and cleaning goods. .(IBIS World 2015).
Metcash operates in the industry under its IGA and Supa IGA brands. Metcash's market share is calculated using the aggregate revenue of all IGA-branded stores nationally. Over the last five years, IGA-branded stores have lost market share due to strong competition and less number of stores than the other big companies such as Woolworths and Coles which occupy 40.2% and 33.5% respectively. According to the below figure Metcash occupies 9.0 % of Grocery Market share whereas
Aldi comes in fourth occupying 8.1% of the industry. …show more content…
Aldi’s low price strategy has forced Woolworths and Coles to engage in price war both trying to outperform each other in terms of lower price in numerous product ranges where as IGA-branded stores have suffered due to the ongoing price war between Woolworths, Coles and ALDI. Consumers have been drawn to lower prices at the other major supermarkets. As a result, revenue across IGA stores suffered particularly in 2011-12 as the price war heated up.
To sustain its position in the market in the coming years, Metcash increased its advertising and discounting efforts however profit margins are anticipated to have fallen over the past five years. Metcash started a strategic review in June 2013, to address the declining sales and competitive pressures in its food and grocery operations. Following the review, Metcash announced in March 2014 it would launch Project Diamond, a five-year transformation strategy aimed at achieving efficiencies through operation consolidation. The project will cost an estimated $675 million to implement, with up to $180 million in capital expenditure allocated to supply chain
A company’s strategy is the set of actions that its managers take to outperform the company’s competitors and achieve superior profitability (Thompson et al 2016). In other words, a company must have a well-planned strategy if it aims to gain competitive advantage in its industry. The top level managers are the ones who usually make strategic decisions and they are constantly looking to gain company’s success and profit in the long run. Managers of every company must be keen and prepared to alter the strategy in response to changing market conditions, technological advancement, unforeseen changes in competitors, changing consumer needs and emerging market opportunities. They should also look for new ideas to improve the existing …show more content…
Industry
In Australia, major players in Grocery industry are Woolworths, Coles, Metcash and Aldi. The main activity of this industry involves operating supermarkets and grocery stores trading a range of groceries and food products, including fruit and vegetables, bread, cigarettes, canned goods, toiletries, dairy goods, delicatessen items and cleaning goods. .(IBIS World 2015).
Metcash operates in the industry under its IGA and Supa IGA brands. Metcash's market share is calculated using the aggregate revenue of all IGA-branded stores nationally. Over the last five years, IGA-branded stores have lost market share due to strong competition and less number of stores than the other big companies such as Woolworths and Coles which occupy 40.2% and 33.5% respectively. According to the below figure Metcash occupies 9.0 % of Grocery Market share whereas
Aldi comes in fourth occupying 8.1% of the industry. …show more content…
Aldi’s low price strategy has forced Woolworths and Coles to engage in price war both trying to outperform each other in terms of lower price in numerous product ranges where as IGA-branded stores have suffered due to the ongoing price war between Woolworths, Coles and ALDI. Consumers have been drawn to lower prices at the other major supermarkets. As a result, revenue across IGA stores suffered particularly in 2011-12 as the price war heated up.
To sustain its position in the market in the coming years, Metcash increased its advertising and discounting efforts however profit margins are anticipated to have fallen over the past five years. Metcash started a strategic review in June 2013, to address the declining sales and competitive pressures in its food and grocery operations. Following the review, Metcash announced in March 2014 it would launch Project Diamond, a five-year transformation strategy aimed at achieving efficiencies through operation consolidation. The project will cost an estimated $675 million to implement, with up to $180 million in capital expenditure allocated to supply chain