Environmental Scanning and Organization †Free Samples to Students

Question: Discuss about the Environmental Scanning and Organization. Answer: Introduction The present report focuses on the importance of strategic management in todays organization. Strategic management refers to the formulation as well as adoption of major initiatives and target taken by the enterprises management (Alkhafaji and Nelson 2013). This study analyzes on the strategic management of Australian Coles supermarket. Australian Coles Supermarkets,trading asColes, is one of the biggest supermarkets, consumer services chain and retail company, situated in Melbourne and owned by the parent organizationWesfarmers. Coles has near about 100,000 employees and with competitorWoolworths, it accounts for about 80 per cent of the market in Australia. For over the last few decades, this enterprise has continued to deliver exceptional customer service, good quality products and huge value to the people residing in this nation. Their long term commitment is to help this nation grow towards sustainable future, build relationship with the Aussie farmers and support local jobs within this food industry (Babatunde and Adebisi 2012). Their mission statementis to become innovative leaders in the industry and provide their consumers with convenience, value and good service. Their positioningstatementis to serve in better way by focusing on consumer proposition, operating excellence and innovation. In fact, they strive to provide value to their customers by reducing price of shopping basket, improving product quality through fresh manufacture and delivering easier as well as better shopping experience per week. The sector is one of the concentrated sectors in Australia, with Woolworths and Coles accounting for about 65% of sectors revenue i n present year. Huge growth of the existing companies over the last few years has considerably altered this industry (About Coles 2018). Small Supermarket Company struggles to compete in this increasingly price-intense sector. Recent facts reveals that sector-wide profit margins have declined over the last few years since players have decreased their prices and accepted low margins for staying competitive. One of the challenges that this industry has been facing is price deflation occurring from intense price competition. Macro environmental Analysis Macro environmental analysis is important for every business as it helps to observe certain factors that influence Coles business in Australian market. These external factors facilitate to identify several problems that Coles faces while operating in this industry. Moreover, this analysis is essential method of observing industry conditions that impacts the business. The macro environmental factors that affect this enterprise are explained below: The population in this nation increases by about 2% per year and most of these people reside in urban areas. The total population in Australia involves individuals belonging from various backgrounds as well as cultural groups. As the population in this country consists of large number of young customers, Coles faces challenges of innovating new products for matching up with youth customers. As high density regions are basically major cities in Australia, they face issues of attracting large number of customers. Thereby , Coles is targeting customers whose age is between 15 to 65 years in order to attract more customers (Eden and Ackermann 2013). Australia has all types of developed technologies to support requirements of Coles. Recent facts reflect that young aged population in this nation uses more internets with respect to other people. In fact, social media growth has turned television advertising media an obsolete technique. Moreover, enhanced environmental concern enforces Coles to utilize less energy and this creates issues within the business. In addition, Coles supermarket are adopting new marketing methods as well as introduces developed technology for meeting with varying requirements of these customers. Although integration of new technology creates several problems for Coles, it helped them to innovate new products. The Australian economy has been one of the most developed economic countries. Presently, fluctuation in foreign financial market has affected Australias economic condition. Moreover, Australians purchasing power also declined from past years owing to financial crisis and high unemployment rate. This decline in economic condition in Australia has increased competition level in this industry. As a result, Coles faces several challenges owing to this economic condition. The management of this enterprise thereby strategizes to lower their product price for making it affordable to their customers. Socio- cultural factor The Australians have become highly conscious about their heath as well as well-being. This trend also offers huge opportunity for this enterprise since there are less number of players in the industry that offers organic products. However, Coles benefits from this factor as the organic food sales increases over long term. On the contrary, it constitutes huge threat in niche supermarkets that specializes in these products. One of the influencing factors that control purchasing habit of customers in Australia is culture. As Australian consists of individuals belonging from ethnic backgrounds and various cultures, the purchasing habits of customers also varies. Due to this varying culture, Coles faces several issues regarding sell of their product. However, the management of this enterprise strategizes to diversify their product and offer wide product range to their customers for meeting this challenge. Thus, Coles faces huge difficulty in working in this multi- cultural environment of this nation. A considerable change in legal as well as political environment in Australia might affect Coles operations in this industry. The Australian government developed Australian Competition and Consumer Orientation( ACCC) for governing this industry. However, ACCC has adopted new policies, which in turn enhances the competition level in this industry. Variation in taxation policy as well as environmental regulations by Australian government makes it highly difficult for Coles to operate in this environment. Additionally, it also decreases the purchasing power of customers, which in turn influences revenue framework of this enterprise. Owing to this, Coles adopts flexible marketing strategy for meeting with changing political factors of this industry. Industry Analysis The retail industry life cycle stages mainly comprises of four distinct phases based on both the sales as well as profit growth. The theory of retail competition states that the retailing institutions such as the commodities they distribute mainly pass through identifiable cycle. This cycle is basically divided into four stages that involve- innovation, development, maturity and decline. Innovation stage- At this stage, the retail store tries to innovate new product in order to attract large number of customers. The firms in this industry implement new strategy for expanding the business in the global market. Few Retail experts have found out that the business owners often reenergizes their failing business by returning to this stage. Development stage- In this stage, the retail businesses starts to grow and attain higher profits in their business. In fact, the competitors create several challenges for new retail business (Stead and Stead 2014). The challenge that enterprise faces in this stage is to continuously innovate product in order to retain their customers in competitive marketplace. Maturity stage-At this maturity stage, the retail firms faces intense competition owing to overexpansion of industry. As a result, the firms face decreasing profits as well as declining customers loyalty. Owing to this condition, prices begin to decline since the rivalries strategize to retain their consumers with large deals. Decline stage-This is the last stage of this retail industry life cycle. The retail firms that fail to innovate new products or services enter this stage. Hence, they lose their share in the market and attain bad reputation. The attractiveness or the profitability of this industry at present times in analysed with the help of Porters five forces. This is followed by analysis of relative position of Coles in this sector. Buyers bargaining power- Although buyers bargaining power has been low in this industry, it might increase in future. As there are few players dominating this sector, the buyers bargaining power is low (Fung 2014). Aggressive policies by ACCC to reduce entry barriers facilitate to increase buyers bargain power in future owing to entry of new entrants. Moreover, their bargaining power might crease to reasonable level in future. Suppliers bargaining power- Bargaining power of the suppliers in this sector has been low owing to huge control of market share of Coles and Woolsworth. However, the suppliers have limited intermidiaries selection from this sector. These companies are the main purchasers in this industry and thus holds significant market share. The current change in policies by Federal government and ACCC helps to decrease entry barriers in this industry. It is predicted by some researchers that suppliers bargaining power might become moderate owing to huge intermediaries range that manufacturers might select from this industry. Threats of substitutes- Threats of substitutes in this industry are generally high. Coles lace several convenience stores, farmers stores and grocery stores. Indirect rivalries basically form threats of substitutes (Fung 2014). In addition, shift of customers preferences as well as tastes towards organic goods signifies that farmers market poses threat to this supermarket. Threats of new players- New entrants threats are also low in this industry. The agreements such as rent, ownership and zoning laws results in deficiency in the retail stores location. Despite reforms in laws adopted by ACCC, the new entrants threat might remain low in future. moreover, Coles, woolsworth will create challenge for the new entrant and thereby the new players might need huge investments(Gamble and Thompson 2014) Rivalry among competitors-Since there is near about 140000 retail stores, huge competition exists in this sector. Woolsworth, Aldi are some of the rivalries of Coles that operates in this market (Porter 2014). Coles faces huge competition from its rivalries in terms of product quality and pricing. Companys analysis The capability of Coles to outperform their rivalries as well as maintain competitive edge basically rests on the resources as well as capabilities. The three vital resources as well as capabilities of Coles involves- Effectual Supply chain-This Companys distribution network is basically a resource as well as capability in both in- bound and out- bound logistics (Grant 2016). This resource helps Coles to save cost throughout the network and compete with their rivalries. Brand Reputation- Coles has attained reputation in terms of quality food over the last few years. Their brand reputation helps them to give differentiation to their rivalries and contributes to customer satisfaction (Wheelen et al. 2017). Effective management-Despite increasing inflationary rates and recessionary pressures, Coles has attained high growth rate owing to effective implementation of strategy by their management (Lasserre 2017). The capability of Coles management steers them through present economic environment. Moreover, continuous attainment of high growth makes it highly valuable resource. Coles capabilities combining in unique as well as sustainable manner helps to generate core competencies for this enterprise. Some of the major competitors of Coles are Woolsworth, Aldi, Costco, IGA. These competitors have transformed this industry over the last few years. Costco and IGA are the new entrants in this industry and thus face huge competition from Coles, Woolsworth and Aldi. In fact, Coles faces difficulty while competing with Aldi in terms of product price since Aldi sales lower price as compared to Coles and wools worth. Coles thereby differentiate itself from producing innovative products at low cost in order to gain competitive advantage over its competitors (Hitt, Ireland and Hoskisson 2012). Strategic Analysis As this enterprise has been facing challenges from its rivalries regarding product pricing and varying demand as well as preferences of consumer, the management of Coles is adopting new strategies for gaining competitive advantage over its rivalries. Internal analysis signifies that Aldi poses threat to Coles regarding product pricing. Owing to this, Coles also strategizes to lower its product price in order to compete with Aldi. Financial analysis also signoifies that Coles profit margins has been under huge pressure owing to fierce marketing, Coles adopt new marketing techniques or campaigns for selling their product. Although these strategizes are adopted by Coles, it has not been working effectively. However, recommendations on further implementation of new strategizes will help Coles to mitigate challenges and attain higher profitability. Coles must build effective suppliers network and increase online sales in order to establish good brand image in the market Coles should also invests in innovative as well as sustainable ventures in order to remain ahead of increasing competition Coles should also implement low cost product pricing strategies in order to compete effectively with new entrants The marketing group of Coles should also interact with their customers for attaining their feedback about the product. This strategy will help them to create products based on their customers preferences. Conclusion Coles has been suggested to adopt online retail advancement of technology measurement. Moreover, they can increase online sales by matching online product price with that of stores. Additionally, varying digital interactions basically for online sites might help Coles to leverage customer loyalty program. Coles should also adopt hybrid cloud framework for attaining reduction in cost of product along with good information management. However, it is predicted that adoption of these strategies will help Coles to increase their sales and attain higher market shares in future. It will also help Coles to achieve success and expand business successfully. References About Coles. (2018).Coles.com.au. Retrieved 20 April 2018, from https://www.coles.com.au/about-coles Alkhafaji, A. and Nelson, R.A., 2013.Strategic management: formulation, implementation, and control in a dynamic environment. Routledge. Babatunde, B.O. and Adebisi, A.O., 2012. Strategic Environmental Scanning and Organization Performance in a Competitive Business Environment.Economic Insights-Trends Challenges,64(1). Coles careers (2018). Colescareers.com.au. Retrieved 20 April 2018, from https://www.colescareers.com.au/about-us/our-brands Drnevich, P.L. and Croson, D.C., 2013. 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