Managing Supply Chain Management: Coles/Woolworths vs. Suppliers Introduction Coles and Woolworths are too leading supermarket giants in Australia. In the world Coles and Woolworths ranked 19th and 15th among the selling retailers (Knox, 2014). Coles has started first supermarket in 1960 and till 1973 company achieved its primary aim of having supermarket in every Australian city. Cole’s service has more than 18 million transactions each week. Woolworths started fresh food stores around 80 years back in 1924 at Sydney Australia (Kahwaji, 2014). Coles and Woolworths are having around 75% market share in Australia grocery market. Coles and Woolworths are sharing too much market power between them. Australian grocery market has the duopoly of …show more content…
The program named Active retail collaboration (Knox, 2014). In that program suppliers are divided into a list of top 50 and tail suppliers were need to pay rebate to Coles for improving their efficiency. Tail suppliers faced the dominance and undue power pressure of Coles. Red bull the energy drink supplier faced a $400,000 cut in supply cost with a rebate of $200,000. On the same lines Coles launched “ARC supply chain boot camp” in the same year. In this camp suppliers were designated into three tiers with tier 3 containing 220 suppliers. More than 30% business of Coles was coming through those suppliers. The tier 3 suppliers faced the harsh and brutal behaviour of Coles’s manager when they threatened suppliers to end their supply contracts and a range review of their current products. 62 suppliers were escalated for either termination of contract or a range review of their products within 35 days. Coles’s manager took decision in hurry for e.g. cancellation of planning and promotion of Stuart Alexander and a range review of Oates cleaning products. The tier 3 suppliers were forced to take on the spot decision for rebate amount. Many suppliers feel disturbed and frightened with Coles’s dominant …show more content…
Food Retail Sector (Government, 2014) Power imbalance between Coles/Woolworths and Suppliers There is a complete imbalance of power between Coles/Woolworths and their suppliers. The Coles and Woolworths have 741 and 840 supermarkets in Australia as of 2011 (Keith, 2012). In 2011, Coles showed their dominance over the suppliers. The company managers were not ready listen to the supplier’s problem. They want negotiation and dealing at their own cost. This power imbalance is creating a mess in the market because suppliers try to negotiate other retailers i.e. Aldi, IGA etc. This increasing duopoly of Coles and Woolworths will make market penetration very difficult for new entrants. At the same time these two will make market anti-competitive and it will leads to three major concerns i.e. Selling power, buying power and retail. a. Selling Power- The consumers will be bound to purchase the product either from Coles or Woolworths. This will decrease the chances of discount on various products. b. Buying Power- When the buyer power will be concentrated only to two major giants. They will overpower the suppliers and producers as Coles already done in 2011. They will display the material in shelves as per their choice (Knox,
Unit 29 – Understanding Retailing P4 - Identify the competitive factors in the retail environment a selected organisation faces. Curry's is a British electrical retailer operating in the UK and Ireland and is owned by Dixons Carphone. It specialises in selling home electronics and household appliances, with 295 superstores and 73 high street stores. Electronics will be the next company that will be affiliated with them. Organisations are effected by many different competitive factors that they are forced to face.
1. In the broader context (not specific to Dollar General), what is KKR’s investment strategy? What are the challenges KKR will encounter to make its investment in Dollar General successful? How could KKR add value to Dollar General?
Thereunto, an important factor in Stila’s approach to its supply chain is the focus on developing strategic relationships with vendors, in which departments inside the company plan carefully to optimize production efficiencies and produce cost savings and manufacturing process stability over time, so long-term relationships are preferred. Price is just one measurement when Stila qualifies contract packagers, for example, as opposed to a more tactical use of vendors, in which a brand owner increases capacity and capability as needed and bases
In this walk through a supply chain, we will start with a package of M&M’s purchased at the retail store Target. Supply chains encompass all the processes, services, back office processes, and subordinate finished goods used to manufacture the M&Ms. What one will quickly realize is that there are multiple supply chains working together to move raw materials from a farm, transporting the goods to downstream supply chain members, and providing supporting services and ancillary products required within parts of the chain like manufacturing or distribution. Interestingly, supply chains can be horizontal (distributed), or they can be aligned vertically, where one entity of the supply chain controls the entire chain. One may suggest that an effective
In order to analyse what extent Tesco U.K’s performance is attributa-ble towards industry characteristics, Porter’s five forces are broken up into competition, potential of new entrants, power of suppliers, power of customers and the threat of sub-stitute products. Below is an image of Porters 5-forces in relation to the U.K supermarket industry. 1. Rivalry amongst competitors The intensive rivalry in the U.K’s grocery sector is remarkably high.
Although the Loblaw has majority market share holds, the company faces intense competition from many types of grocers such as Sobeys Inc., Metro Inc., Walmart; and many types of non-traditional competitors, such as drug stores, warehouse clubs and specialty stores (organics & ethnics). High rivalry intensity makes an industry more competitive and potentially decrease profit margins. Entry Barriers: As there are fierce rivalry between competitors, the barriers to entry in the Canadian grocery market is high. The large food retailers account for the majority of the market revenue in Canada. Thus, smaller interdependent retailers can’t really compete with such-alike Loblaw or Sobeys or Walmart.
A supplier with strong bargaining power has the advantage of charging their price higher or selling low quality of the product to them. The bargaining power of suppliers will be low as there are many suppliers in the market offers similar products and this allows courts to switch to other suppliers that offer lower cost. Intensity of rivalry within industry High Threat Competitors in the industries There are quite a number of businesses involve home furnishing and electrical appliance.
The Pantry’s use of forward integration contributes to this bargaining power. They receive much of their in-store goods from Budweiser, Frito Lay, and Coca-Cola, who in turn provides delivery services directly to stores. Bargaining Power of Buyers Low brand loyalty and minimal switching costs make the bargaining power of buyers high. Buyers make the decision to patronize other businesses when the opportunity to pay lower prices, presents itself.
Considering using more technology inside Trader Joe’s would also speed up business inside Trader Joe’s. 5 – Conclusion This paper has revealed the most powerful and weak spots of Trader Joe’s. Supermarket industry is currently alive and competition between firms are very contentious.
This industry will be faced challenged when the location is not easy to be reached and the population of the areas are not much as expected. For example, the Aeon supermarket at Mid Valley Megamall Kuala Lumpur, the sales of this location is guaranteed as the population daily at Mid Valley Megamall in 120,000 peoples approximately (malaysiandigest, 2014). Other than that, most of the supermarket are operates or leasing in a popular shopping malls. This is because peoples nowadays are not going to supermarket on usual day or without purposes. For instance, Giant hypermarket at Plaza Sungei Wang is a good example.
Another company is Sysco, a food-service distributor in the U.S. Porter demonstrates that “It led the move to introduce private-label distributor brands with specifications tailored to the food-service market, moderating supplier power. Sysco emphasized value-added services to buyers such as credit, menu planting, and inventory management to shift” (Porter, 2008, p. 90). Like Paccar, Sysco knows how to make them different from their competitors in the high competitive industry. In food industry, customers is very sensitive with price because they have many options for substitute, so companies must have a competitive prices. However, Sysco decides that they should add values to their products and improve connection with their suppliers.
The Value Chain 4 4. Operations Strategy Implications (Store level) 5 5. Inventory Management and Demand Forecasting 9 6. Supply Chain Management 9 7. Quality Management 11 8.
Unilever have large suppliers which provide them with the basics of their products. Population of the suppliers have a normal effect on Unilever, they have large number of suppliers they can switch to any other they want depending upon their terms and conditions of desired products. Same as with the overall supply, suppliers for the raw materials of the same product are same for all other companies, if the supplier made some changes it will have a little effect on the Unilever. Thus, from the analysis we can say that bargaining power of suppliers in the Unilever firm is
By this the company emphasizes on the fact that an excellent collaboration with its supply chain partners is vital in order to perform the CSR strategy in its global network. (Tesco and society review , 2014) The important role supply network has on the Tesco CSR strategy is manifested in the essential of trading responsibility. Tesco proclaims about its relationship with suppliers: ‘’Building strong partnerships with trusted suppliers will ensure that we deliver high-quality and safe products that are responsibly produced’’. (Tesco , 2013)
A critical review of the retailer was carried out based on the external factor analysis using PESTLE (Political, Economic, Sociological, Technology, Legal and Environmental) and using Porter’s Five Forces Model of Competition to understand the correlation between suppliers, buyers, competitors within an industry, potential competitors, and alternative solutions to the problem being addressed. Background of the Company Giant was founded by the Teng family as a simple grocery store in one of the suburbs of Kuala Lumpur in 1944. Acquired by Diary Farm in 1999, Giant’s mission was to offer a wide variety of products at the lowest possible prices and closer to residential areas. Key to Giant’s growth is the ability to continuously offer value for money products and the core principles are retained even while pursuing the international brand status.