Coles and Woolworths Case Study

1314 words 6 pages
1. The key to Woolworths’ faster growth than Coles Myers may be attributed to several reasons, one of them being its emphasis on diversification which saw it enter markets such as petrol. Woolworths offered everyday low price (EDLP) on established brands, a strategy akin to Wal-Mart in the United States which presents a competitive advantage against Coles Myers’ Kmart and Target divisions which maintained a ‘high-low’ pricing strategy. Woolworths CEO Roger Corbett who had prior experience with the management of Wal-Mart chain in the US, implemented ‘Project Refresh’ in 1999 to restructure the company’s supply chain, and to introduce new technology and the EDLP structure to its supermarkets. Furthermore, Woolworths’ success in entering the …show more content…
Share price rose 29 percent by August 2003 after competitive responses were implemented; this would provide Coles Myers with additional resources for growth and instil greater consumer confidence in the company already present in its’ competitor’s image of The Fresh Food People.

3. The key differences between New Zealand and Australian retail markets would be the size, likelihood of attack and response to market entrants, of which Australia maintains a history of retaliation against newcomers. A competitor analysis show that both Australian and New Zealand markets are somewhat related in terms of technologies used or core competencies needed to develop a competitive advantage. For example, The Warehouse’s strategy of under pricing competitors is similar to Woolworths’ EDLP strategy; this presents itself as a factor of market commonality. In terms of suppliers, political differences play a role as observed from the New Zealand legislation allowing parallel importing which contributed to the success of The Warehouse in its ability to import branded goods from international suppliers at prices cheaper than local brand distributors. This privilege may not be exploited in Australian market where both legislative barriers and customers avoid imported products in favour of local goods in a highly protectionist environment. The differences in terms of competitive dynamics is exemplified in Australia, which is seen as a standard-cycle market, due to the

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