Markets Segments and Decision Making

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Online shopping in grocery and retail industry has a significant development over Australia because it reduces the time, reduces over crowd at stores, convenience for customers, better prices and so on.

The CEO, Roy Morgan Research, says: “With so much choice available to them, Australian supermarket shoppers are in a position of power. As Woolies discovered last year with its disastrous ANZAC campaign, and as ALDI is discovering now after refusing to heed the call to phase out caged eggs (as Woolworths and Coles are doing), the consequences of alienating consumers are very real – and very public.”

To conclude, grocery and retail industry in Australia has a big competition in a sustainable political environment plus fluctuation in economy with huge market players include WOOLWORTHS, COLES, and ALDI. Entering cost into this industry is more expensive, and marketing strategy of this industry is lower price because of these reasons newcomers are not taking a huge risk to enter into this industry.

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PESTLE

Identifying factors that affect to macro environment in industry is important for each and every organization and for that most of players use important analytical tools such as PESTLE and Porters five forces. In this report, application of PESTLE analytical tool in Australian retail and grocery industry (Coles) is performed as follows;

- Political- the political environment of Australia impacts the retail industry as well the routine level of Coles. Even though Australia has a stable political level without any up and down between two parties, the legislations rules and regulations for this industry is bit strict specially on big players,” Attempting to contain the dominance of the country's two largest supermarket chains - Coles and Woolworths, who control approximately 70% of the market between them, Australia's Federal Government amended the Trade Practices Act to give more authority to the ACCC authorising it to prevent large companies from acquiring smaller rivals. “(Companies and markets: Australia food and drink report Q3 2010 -2010, May 24)

Government’s competitive policy which prevent major market players include COLES and WOOLWORTHS competition help to small market players in industry to come forward. This policy has helped to many retail and grocery shops which located on Dandenong (MKS, MARMARA) area also to develop and attract and retain customers.

Government policies affect on business most of the time negative manner but, even though there are some positives side as well which will increase companies profit on top level. But these factors are not helping directly towards company but indirect since, the retail industry relies on these facilities provided by government to transport goods and walk in customers to supermarkets. Examples are government supported railways, road and water transport infrastructure.

- Economic- This is one of the most important factor that affect on this industry hence retail and grocery industry sales are more driven by the economic environment .A good (robust) economy will increase the purchasing power of consumers then it will increase the sales of company and if there is down ward economy with more fluctuations in currency, high taxation, import and export laws and inflations can lead to decrease the consumer purchasing power. And in Australia the taxation amount have to pay by companies are bit high this will affect on Coles performance as well. “The government has dismissed the need to spell out the economic benefits of its company tax cuts because they already pass the pub test.”(Financial review/ www.afr.com) apart from that, the fluctuation of currency and weakening of dollars in Australia has affected the performance of COLES.

- SOCIAL- There is no doubt that social factors also play a significant role in companies’ macro environment performances. “The social aspect focuses on the forces within the society. Family, friends, colleagues, neighbors and the media are social factors. These factors can affect our attitudes, opinions and interests. So, it can impact sales of product and revenues earned.” (pestleanalysis.com/social-factors-affecting-business/). The growing popularity for social media, (such as Face book) has increase among younger generation across Australia and this will impact on Coles supermarket in Dandenong as well. Since the majority of people who are living in this area are independent youth (refer 1st part) and they used to grow with gadgets like phone, computers such as with digital media and most of them will prefer to online shopping and older people will be strike on traditional method like walk in to shopping centre. Coles maintain an attractive online shopping website people who prefer purchase online. Older generation of Australia is increasing and while doing business companies have to focus on themselves as well.

Dandenong is a multicultural area different nations of people are living across city and a supermarket like Coles have to focus on taste of each people not only Australian consume products. For example that Cole’s supermarket has segment their products for different nations is you can find Halal yogurts in Dandenong Cole’s supermarkets since there are Muslims majority.

- Technology- The task of technology is not only invents new products for sale in companies, but also plays huge responsibility while sell products to customers. Such as online shopping facility, self checking counters at supermarkets have made life easier for customers. There is huge development in supermarkets technology in Australia, example from Coles is Corbug north supermarket is first soar powered supermarket in Victoria. (Coles website) and use flybuys cards when doing transactions with them.

- Environmental- This factor is also affect the entire industry and COLES supermarket all over Australia because in this era companies cannot ignore the environment and do business and this will affect on profitability. Therefore Coles even follow the same rule “using line reusable plastic crates to transport broccoli”(coles website) and this will eliminate the use of polystyrene.

- Legal- the carbon tax implemented all over Australia has also impact on retail industry as well as Coles.

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Competitors analysis

Competitors are in terms of internal environment factor that affect to an organizations performance and to analyse this factors commonly use SWOT analytical tool which stand for Strengths, Weakness, Opportunities and Threads. The application of this tool use to Cole’s