Internal (SWOT) Analysis Of Coles Supermarkets VRIN Model - Sample

Question: Discuss about the Internal Analysis of Coles Supermarkets. Answer: Introduction Corporations in order to become competitive within the scope of their industry develop various strategies(Stacey, 2007). In order to establish core competencies corporations make extensive analysis of internal and external environment. While external environment helps corporations establish successful strategies, internal capabilities and processes are the determining factors for strategic choices. Strategies help determine long term outlook for organizations and establish the scope of their activities. Thus, in order to address a corporations business environment, resources and competencies are extended which form values and expectations for various stakeholders. There are three levels of strategy that a corporation establishes corporate level strategy, business level strategy and operational level strategy(Ambrosini, 2009). The scope of the current report focuses on development and establishment of operational strategy of Coles supermarkets in Australia. Coles supermarkets are a retail chain business owned by Wesfarmers in Australia(coles.com.au, Retrieved on 17th March 2017). The Company has been established in 1914 and has its headquarters based in Hawthorne East in Melbourne, Australia. The company is operational in Australia and New Zealand, and is currently based across 776 locations with several supermarkets and retail stores. The current Managing Director of the Company is John Durkan and its earns an annual revenue of AUD$ 33.00 billion. The company has over a lac employee and it has extended online shopping experience to its customers based on resources and capabilities. Literature Review Organization forms competitive strategies according to its resources, capabilities and competence such that they can develop sustainable competitive advantage(Miller, 2010). Sustainable competitive advantage can be rendered by an organization when resources or capabilities are valued, rare, inimitability and non-substitutable. Combined criteria which help determine competitive advantage of an organization is through the VRIN model. Value of strategic capabilities is when an organization is capable of acting on an opportunity and reduces its threats(Ireland, 2008). These valued proposition of the organization deliver advantage to customers and potential competitive advantage as well. Such proposition needs to be at a cost that provides the organization with minimum rate of returns. In the VRIN framework to deliver competitive advantage to customers primary activities of the company are integrated into support activities such that tremendous margins can be generated. Rare capabilities constitute those which belong to a particular organization only. While valued items continues to provide benefits to the organization, rare capabilities might be patent, publicity that may be short lived(Su, 2009). Inimitability capabilities constitute those aspects of a business that are not easy imitable by competitors. For a capability to provide sustenance to a particular form of business, competencies need to be linked or integrated in the way such capabilities are rendered. Non-substitutability is an aspect of business that reduces threat from substitution(Paulraj, 2011). These mainly constitutes of skills and competence that are not easily coped to opted by competitors. Internal Analysis- VRIN Model Every business conducts a SWOT (Strength, Weakness, Opportunity and Threat) analysis of its existing capabilities. Post such SWOT for internal capabilities has been conducted can only the organization decided on its VRIN model framework(Knott, 2009). Value-A resource or capability of Coles Supermarkets is its unique store design. The attractive store design of the organization provides opportunities to attract customers to avail the reduced price opportunity. There are a number of multinational retailers in Australia, Coles through its online store and fresh food delivery have been able to reduce threats from them considerably as Tesco, Waitrose, Metro and so on(Luxton, 2015). Coles due to backward integration with Wesfarmers is easily able to provide various raw fruits and vegetables items from cooperative at low costs, at a marginal rate of return. Hence, it provides value additional to the firm along with its other retail products. Rare capabilities of Coles constitute its capabilities to deliver its customers fresh products(Oliver, 2008). This aspect of the business is however not extended to customers who are residing outside of a given periphery. Outside of this periphery the products might lose its freshness and it will no more constitute rare capabilities of a firm. Coles Organic is an unique brand proposition of the Company whereby it is sourcing organically produced and farmed vegetables as well as meat to its customers. These products do not make use of any type of chemicals, fertilizers, pesticides for growing such crops or vegetables. Such products make organically certifies chemicals only. Coles Simply Less has high market share as it has been designed for health conscious customers by providing them healthier alternatives. For Coles, inimitability aspect rarely exists as its business in the retail sector functions according to rest of its competitors. The business sustainable competence is derived from its value chain whereby its suppliers and distributors are tactfully integrated(Uddin, 2010). This value chain of the business exists post Wesfarmers acquisition of Coles and is continuing to provide major advantage to the organization. The Company is based from Australia, hence its cultural integrity as well as adaptation renders it high competitive advantage. Non-substitutability for Coles Supermarket products is very low. In retail businesses most players have developed their private label branded product category in order that they can gain a significant market share(Talaja, 2012). While fresh food and vegetable items are most desired by the consumers of the Company, other products constitute resemblance to other products. Though the product development team within Coles works towards generating value for the Company products, there are almost nil products that are non-substitutable in nature. Coles introduction of mixed clothing range has created a unique buzz in the market and has taken market by surprise. The clothing brand has attracted tremendous attention and is currently competing with major brands in the country. The Company aims to make this brand occupy major market share in the country and create a unique proposition for the business. As the clothing business has already a greater brand extension for the Company. Coles Supermarkets provide maximum value to its customers by means of the integrated value chain present. The Company is located at various points throughout the country and also in New Zealand. It aims to provide unique advantage to it by means of its supply delivery systems. Its unique feature is to provide its customers best of valued products at affordable prices. For this the Company sources most of its products from farmers and producers of goods. Wesfarmers has provided the Company with backward integration that let it become a leading retailer in the country. Customer feedback provides high level of satisfaction associated with products and services at Coles Supermarkets. Customers believe that the price at which the Company offers its valued products is uniquely. Currently the Company holds around 80% of the market share which is on a gradual diminishing state the Company has to innovate in order to further extend its capabilities. Coles adopts aggressive marketing strategy which helps it to increase its brand value and customer visibility. The Company adopts a varied promotional strategy as quiz programs, propagating slogans and other ways to attract various customers. It has offered its customers shopping experience from sitting at the comfort of their homes and getting delivery accordingly. Recently, it has adopted internet retailing as a means to advertise and brand its products. Conclusion Strategic capabilities which are internal to a Company can act in a great way to deliver competitive advantage. Whether such competitive advantages will render sustainable or non-sustainable ways in which resources are organized. Coles has resources as well as capabilities which can help it emerge as a leading retail store in Australia. The Company is also aggressively promoting its private label branded products. Such generic products have a mid-price line that provides budgeted household essentials and grocery items. It has established an array of generic brand names as Coles Smart buy, Coles Finest, Coles Green Choice, Coles Organic, Coles Simply Gluten Free, Coles Simply Less and Mix Clothing to cater to market better. In fresh product lists the Company is also offering halal and kosher products which have high market share. Thus, it is the resource and capabilities of the Company that enable it to exists in the market place and compete with its competitors. Reference Lists Ambrosini, V., Bowman, C. (2009). What are dynamic capabilities and are they a useful construct in strategic management?.International journal of management reviews,11(1), 29-49. coles.com.au. (Retrieved on 17th March 2017). Company Profile. https://www.coles.com.au/about-coles/centenary. Ireland, R. D., Hitt, M. A., Hoskisson, R. E. 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