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This report is about the upcoming business in the supermarket industry. The name of the company is Gros supermarket. The company would be planning to open 3 stores in Sydney and aims at serving the customers with healthy food products. This report argues about the industry situation in Australia as well as the competitor’s analysis for Gros supermarket. It also focuses on description of the plans and strategies that company would be implementing in order to make the business successful in such a saturated and competitive industry.(Caron Beaton-Wells, 2017)The main aim of this report is to analyses the market and to plan out the strategies and processes of Gros supermarket. The last part of the report discusses about the financial requirement for opening the business.
Industry:Supermarket retail industry
Gros supermarket is the company that would be dealing with different food products that are healthy and tasty in nature. As the company is new in the industry, it is launching some of the products to enter the market and after getting the market response it would be releasing some more food products other than those products. The main focus of the company is to provide the people with the products that are healthy as well as tasty.(Editor, 2017)
Supermarket industry in Australia:
Every industry has to face some of the challenges. Supermarket retail is one of the industries that faces fierce competition in the market. This is the most attractive industry in Australia after mining industry. It has been identified that it is a very capital intensive industry. This is because entry to the industry requires a large amount of capital to be invested in the business. In Australia, the industry has some of the top players that have their place I the industry that is very difficult to deal with. Some of the top players are Woolworths and Coles. Other than that, Aldi is one of the foreign player that has entered the industry and achieving continuous growth. Trends in the industry suggests that suppliers have decreased their investment with Woolworths. This is because of the legislations of Australia that has restricted the big firms to acquire small firms in order to enhances the businesses.(Ehrlich and Michael, 2009)
The above pie chart suggests the market share of the different companies or the organisations in the industry. Decrease in Woolworths share results in 0.9% gain in the Cole’s market share but it also has an impact on the increase in market share of Aldi with 0.5%.
Below is the basic organization chart of the company:
The products that would be offered by the company are in following categories:
Food products: Healthy cereals, pulses, grains, biscuits, dairy products
As the company is new in the industry, so it is coming with the small range of products in the market. Further planning of launching the products would be according to the customer’s response and demands. The products can be defined as the goods that have been offered to the people are the food products that are healthy in nature such as low fat butter, protein rich cereals, multi grain food products etc. The company also has its own brand of some of these products known as Gros select.(English and Moate, 2009)
The price of the company’s own products is comparatively low in order to penetrate in the market. Other products have been sold in very competitive prices with the competitors as well as according to the supplier’s profit margin. Overall, penetration pricing strategy have been used to set the prices.
The most innovative strategy that has been used by the company in order to serve the customers is the strategy of online application. The company has the online application that can be accessed on mobiles. The customers can order the products online and can take the delivery themselves or at their place with paying some of the extra charges.
Some of the products like the cereals and grains are sold in the name of Gros select because they are manufactured by the company itself. Other products are acquired by third party that includes some of the healthy brands such as marigold, BAABAN, Alligga etc. the distribution of the products is done by the online application and by the stores.(IBISWorld, 2017)
As far as the products of the company are considered, the market position of the products is budgetary products. This is because the company is providing low price products to the people.
Market research:Many methods have been used to determine the market situation. Surveys, questionnaires, reports of industry in Australia etc. according to all the analysis of the market following plan has been made.
Target market/ customers:
As the company is focusing on selling healthy products, therefore the main target of the company would be middle aged health conscious people. As the prices of the products is low, so the company is trying to serve the middle-class people with the healthy products.(Kenny and Meadowcroft, 2002)
Environment analysis of the company can be conducted by using the PEST analysis tool:
Political factors:Federal Government of Australia has launched a new law recently. That law is related to the competition policy which suggests that top players of supermarket industry cannot acquire the small business. This step by government allow the small and the new retailers to enter the industry and to compete fairly.
Economic factors:Weakening in the Australian Dollar and decline in economic growth of the country is affecting the supermarket industry in Australia.
Social factors:Society is the very important factor that has its impact on the functioning of supermarket industry. The culture and beliefs of the society affect the choice of the products of the people. As Australia is the place with diverse culture, thus the organizations have to release the products accordingly and promote them according to the society beliefs and values.(Supermarket weep, 2017)
Technology:Technology has the great impact on almost all the fields or the industries all over the worlds. Supermarket is the industry that deals with perishable products, thus the organizations have to come up with the use of technology in terms of increasing the life of the products.
The major strength of the company is its healthy products and low prices to penetrate in the market.
The weakness of the company is its brand image and small range of products
Expansion of business by involving another range of products such as toiletries.
Competitors that already have their brand image in the country.
(Onkvisit and Shaw, 2012)
Market share (%)
Value to the customers
Quality and convenience
Range of products is high
Advertising and sales:
Providing ads in new papers about the hourly discounts helps the people to know about the company’s offers
This helps to target the customers who are found to be fitness freaks by sending them special text about the company’s products and offers
“the sign of being healthy”
This vision statement of the company suggests that company wants to serve all the customers with the heathy products.
“low price healthy product”. This suggests that the company has the objective of serving the middle-class people with the low prices of healthy products.
Goals and objectives:
Short term goals:
Creating awareness about the company
Reaching to large customers base
Long term goals:
Enhancing the business by expanding the range of products
Being the preference of the health-conscious people
Encouraging healthy product’s usage
The profit target of the company is to achieve the break-even point early.
The sales target of the company is selling the 60% of the products in 8 months of the business. This helps the business to know about the demand of the customers as well as the choices of the products.
The capital required to be invested would be around $306,000. Half of the funds would be obtained by the owners of the company. It is partnership firm owned by two owners. Another half would be borrowed from the government venture capital funding scheme.
Review of the plan suggests that the company has to invest more in marketing strategies and practices. This is because it is a startup firm and thus requires to create awareness about the company among the customers.(Smith, 2004)
It is very important to develop a business plan. The plan helps in mapping out the activities that needs to be conducted in order to open a new business.(Undertake business planning, 2007) Gros supermarket is the company that will face a fierce competition in the industry. This is because Australian supermarket industry is already saturating with many companies that have already set their businesses and positioned their products in the mind of the customers. This plan helps the company to fight with those competitors and to implement the strategies according to the analysis of the industry and the Australian market.
Undertake business planning. (2007). Cottesloe, W.A.: Innovative Business Resources.
Onkvisit, S. and Shaw, J. (2012). International marketing. London: Routledge.
Kenny, M. and Meadowcroft, J. (2002). Planning sustainability. London: Routledge.
English, J. and Moate, B. (2009). Discovering new business opportunities. Crows Nest, N.S.W.: Allen & Unwin.
Ehrlich, S. and Michael, D. (2009). Business planning. Newark, NJ: LexisNexis.
Pritchard, B. (2009). Australia as the Supermarket to Asia? Governments, Territory, and Political Economy in the Australian Agri-food System. Rural Sociology, 64(2), pp.284-301.
Smith, H. (2004). Supermarket Choice and Supermarket Competition in Market Equilibrium. Review of Economic Studies, 71(1), pp.235-263.
IBISWorld. (2017). [online] Available at: https://www.ibisworld.com.au/industry/supermarkets-and-grocery-stores.html [Accessed 21 Feb. 2017].
Supermarket weep. (2017). [online] Available at: http://www.roymorgan.com/findings/7021-woolworths-coles-aldi-iga-supermarket-market-shares-australia-september-2016--201610241542 [Accessed 21 Feb. 2017].
Editor, R. (2017). Five retail trends for Australia in 2016. [online] Available at: https://www.retailworldmagazine.com.au/five-retail-trends-for-australia-in-2016/ [Accessed 21 Feb. 2017].
Caron Beaton-Wells, T. (2017). Australian supermarket competition is great for consumers but it could ruin the economy. [online] Available at: http://www.businessinsider.com.au/australian-supermarket-competition-is-great-for-consumers-but-it-could-ruin-the-economy-2015-7 [Accessed 21 Feb. 2017].