Coles Myer
by 2006. Is it achievable? The answer is very unlikely, since there are limited opportunities for growth in a retail industry where intense competition is the mainstay. Other then the food business, it seems like there non-food businesses are heading south. Myer Grace Bros has already been identified as a cash cow with no growth opportunities.
Taking the Gulf War into account, consumers will be hard press to source for cheaper buys in their retail experience. Most may feel that this in turn may generate sales growth for Target and K-mart. We believe that the sales growth of the two brands will definitely be positive if all things been constant. What we are unsure of is how much cannibalisation will happen. At present, there is no distinct differentiation between Target, K-mart and Myer-Grace Bros. Without any added value, the overall sales curve of Coles-Myer’s non-food business will not increase.
Their commitments to the non-food business do create a worrisome issue for their food and liquor businesses. In the process of radical changing the ailing businesses, how much focus will Coles Myer forgo to their food business competitors? We feel that this is a area which needs readdressing.
5.2 Technology
The implementation of the fully integrated supply chain system must complement their existing way of competing. Other then the lack of comprehension by investors and shareholders, a rollout in technology does require a re-alignment of business strategies. What we do perceive as a major challenge is the size and the diversified interest of the organisation.
To achieve full integration across the company is risky. Though untethered information flow does allow a competitive advantage in supply-chain management, we feel that Coles Myer should consider running different systems for the three brands. This will allow Coles Myer to have greater flexibility when they do decide to sell off any one of the brands. Furthermore, using different systems or vendors will allow Coles Myer to evaluate, contrast and compare on what serves them best in the future.
5.3 The “Me-Too” Strategy
One of the challenges that Coles Myer will face will be in their attempt to play catch-up to Woolworth in the petrol discount war. As Woolworth’s petrol discount scheme has been in place for a long time, Coles Myer will have to present a strong offering to win back the market share lost to their competitor. This may not be easy as consumers will be reluctant to change if the service, location, value and customer loyalty offered by Woolworth is superior.
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