Business Model Innovation Corporate Sustainability †Assignmenthelp

Question: Discuss about the Business Model Innovation : Corporate Sustainability. Answer: Introduction Coles and Aldi are two most reputed supermarket chains in Australia. Coles with its rival company Woolworths form the duopoly in the Australian supermarket industry. Coles came into existence in the year 1914 in Melbourne by George Coles. It has its own online service system, which it uses to deliver the products to customers home (Keith 2012). Aldi on the other hand is primarily a German company, which found its existence in Australia in the year 2001. It first opened up its store in Sydney and since then it piled up stories of success with passage of days. After duopoly of Woolworths and Coles in Australia, Aldi has the largest market share. Interestingly, the growth of its success in recent time has enhanced the competition to a next level (Dwivedi et al. 2012). Supply chain management is a challenging task, which has grown in its challenge even further with the advent of globalization. Globalization has made the operations complex, which has also troubled the operation of supply chain. Very few companies have been able to solve the criticality of supply chain (Mangan Lalwani 2016). Walmart is one of those companies that have resolved the complexity of supply chain with its strategic planning. Nevertheless, it has benefitted the company significantly, which has helped the company become the largest companies in the world in terms of revenue generation (Stankevi?i?t?, Grunda Bartkus 2012). The success of Walmart on its global supply chain has proved one thing that it is possible to resolve the complexity of supply chain with strategic planning. The main purpose of this assignment is to analyze the supply chain operations of two of the Australian biggest super market chains Coles and Aldi. This paper would also give a comparison between the supply chain operations of both the companies. Cost saving strategy is one of the key points of Coles, which they use to mould the customers interest into their favor. The company has not kept itself confined to the groceries only but it has also targeted a potential market of liquor in Australia. Insurance and fianc sectors have also been felt as potential options. They are in continued search of new market. It is very evident that the company is trying to explore it towards maximum of opportunities (Dwivedi et al. 2012). There customers are in varied range such as little kids, young kids, matured adults, mobile phone users, drinkers etc. It means that the company has targeted perhaps the every category of the society with different range of foodstuffs (coles.com.au 2017). Unlike other companies Coles has believed in the Australian resource for its required products. As per its belief, Australia is one of those few countries that produce best food in the world. They have their relationship with the local farmers, manufacturers and growers. The Coles Nurture Fund support various small medium size companies opportunities to apply for the loans and use it for inventing various innovative technologies. On the other hand, the company had started Coles Indigenous Food Fund in the year 2001 to support the indigenous enterprises (coles.com.au 2017). Their innovative thoughts have worked in an appropriate direction as they had opened up processing facilities in few Australian locations such as New South Wales, Queensland, Victoria and South Australia. It is a unique concept because it produces packaged red meat including beef and lamb. It not only enhanced their sales capabilities as they can now get deeper into the change in sales behavior but it has also enhanced their control on processing, which is very important to give response in real time. Additionally, they can now easily bring changes in the inventories, which depend on the changing behavior of sales (Juan Ding et al. 2014). Coles has indigenous people that supply the company fresh meat. Farmers supply them fresh vegetables and fruits. Twitter has been one of the favorite sites for the company. They used this to perfection as one of their tools for marketing. Private labeling is one key aspect o their marketing strategies, which has provided a unique opportunity to the company. Through this, the company has utilized the opportunities that are available in the supermarket chain industry in Australia. They became known face with this strategy (Icmrindia.org 2017). Description of Aldi The business model of the company is simple and efficient. They have a strategy to offer top in quality products at an unbelievably low prices. They have kept their low pricing strategy intact with all of their business strategies. They offered limited range of such products, which people shop on a daily basis. However, it has targeted probably every segment of customer with different products such as food, household supplies and beverages. They are always focused on giving customers value to their money, which is why they have always maintained high transparency with their products (Careers.aldi.us 2017). Aldi has mainly targeted the daily customers with its limited but high in quality products. It has continually focused on producing high quality products at incredible lower prices. Unlike Coles, Aldi has suppliers from lower level manufacturers to bigger manufacturers. Aldi never compromise on the products quality. Their approach is balanced, which gives values to both their customers and the suppliers. They also offer fair and equal chances to many small suppliers as well. They are just needed to fill up the form supplied at its website and join their hands with the company if they are eligible to become suppliers. They receive materials from its different suppliers that range from small manufacturers to major manufacturers. Once they get the materials from their supplier, they process it in their distribution centre. Food processing is done in the distribution centre. They have smartly managed the complexity of stocking, which has challenged the supremacy of many organisations. Just-in-time approach is the one strategy, which they have used to have their utmost control on their stock. This approach is highly useful in avoiding any wastage of materials, which is very probable with no control on the stock. The product is then sent to the market when it is processed at its distribution centre. Aldi has mostly targeted the low budgeted income; however, it has now started to target the middle budget households as well. Unlike Coles and Woolworths, Aldi has mainly targeted the grocery segments, which is also helping them in gaining a good market shares from the two retail market giants. It likes to do things differently than Coles and Woolworths, which is why they offer plastic bags. It is very clear that Aldi wants to progress differently and earn maximum market shares (Chapman et al. 2013). Comparison of supply chains The entrance of Aldi has shaken the Australian supermarket industry. The market, which was preoccupied by two giant companies Coles and Woolworths. There is little difference in the supply chain of both Coles and Aldi. However, both have separate customer base. Aldi in particular has targeted the budgeted income group of people whereas Coles has maintained a high standard. Supply chain of both the companies is unique as both of them get their materials from the Australia farmers and other suppliers. For fresh vegetables, they receive approximately around 96% from the Australian farmers. On a same note, the resource for meat has been entirely in the country. However, Aldi has acted smartly to cut down the final customer price. In Aldi, multiple products are placed in one single line, which successfully reduces the requirement of floor executive. A reduction in floor executive would mean a cut down on salary distribution, which would enhance the profit level on sales. Additionally, Ald i offers limited range of products in a single store, which make this possible to open up a store in a comparatively reduced area. Moreover, it saves on monthly rental, which is again useful for enhancing the profit margin. However, in such set ups customers might get frustrated because they would require to visit multiple stores of Aldi to purchase their required products. On contrary to this, such products are easily available in a single store of Coles. Time would tell the fate for both the companies. However, both have targeted a separate group of customer (News.Com.Au 2017). The strategy to cut down on prices on some visible and invisible thing is the one major difference between Aldi and the duopoly of Coles Woolworths, which is helping Aldi to offer products at the cheapest price. It is not that they do not force their suppliers to get quality products like Coles does; however, it is some other way, which has benefitted Aldi in offering the cheapest price. One visible example is of trolley, which they offer to the customers after receiving a gold coin against the trolley. However, the gold coin is refundable, which customers can get on submitting the trolleys (Kuys Kyriazis 2015). Another visible move is paying for the plastic bags. It simply saves money on packaging, which could have been incurred in otherwise situation (Verghese et al. 2013). They have limited products to offer in their stores, which is way too low than the giant Coles. However, this has enabled them in limiting the size of stores, which means that they would be required to pay a c omparatively lesser rent. Moreover, this is also useful in saving money (Thain Bradley 2012). Product's arrangement is also different to Coles. They place more products in one single row, which mean a saving on paying to employees, as fewer employees would be required then. Aldi make less investment on advertising as they do not advertise on TV or any other modes. This is another way of cost reduction, which has no matched. Innovative thoughts, which the company has used in each of its strategy from getting products to presenting those to the consumers has pronounced the dominance of it in using strategies (McArthur 2013). Resource based theory is an effective model that helps to analyze the strengths and weaknesses, which its existing resources have. It affects the supply chain operation as well as it includes all the necessary resources, which play important roles in collaborative relationship with the suppliers. Resources are of various types such as physical, financial and human. The first stage in the resource-based theory includes the financial, physical and human resources. Both Coles and Aldi are giant companies in Australia; however, Coles has larger market shares than Aldi. Aldi is still growing with its expansion; however, it is expanding at a more speed rate than Coles. The report is until the end of fiscal year 2015; however, it simply speaks of the dominating effect, which Aldi has produced in the supermarket industry in Australia. It is rather continually incrementing with passage of days. Aldi employs less number of staffs to save money. However, it also provides opportunity for a quick growth in terms of change of position. It is encouraging to staffs, as they can become an assistant manager in a very less span of time. In other words, Aldi has cut down on its expenses on employees by placing fewer employees in a single store (Brandes Brandes 2012). The second stage in the resource-based theory is the capability, which depends entirely on the varied organizational resources. The supply chain strategy and the strategy to cut down the prices by using visible and invisible approach have placed Aldi at the more competitive zone. The rising market shares of Aldi with passage of time have posed serious threats to one of the oldies in the Australian supermarket industry. Aldi is comparatively highly competitive, as it knows well how to cut down the prices and to offer values to the customers money. However, discounted offers might not help to conquer all the time. This is quite evident in France where discounted stores are struggling to maintain the success. Aldi maintains limited stock in its store to cut down on area and on the rental. However, this also means that customers would require shopping for a weeklong to gather the entire required groceries. This can be frustrating to many. In other words, it is designed for budgeted groups in specific. Additionally, offering plastic bags might be cost effective but this is not fascinating to all. Moreover, packaging has an utmost importance in appealing the value of the products to the customers (Mitchell 2017). Some of the weaknesses, which have been highlighted, might ruin Aldi in long run. For a sustained business, they need to come up with some additional strategies that could add additional values to their existing business. Coles along with Woolworths form the duopoly in the Australian supermarket industry. Coles has its own distribution centre, which helps them get deeper into the food processing process. Moreover, it helps them understand the changing sales figure, which is very important to control the inventories. However, they have been challenged by the cheaper pricing offer of Aldi. They like Aldi need to fight hard with the suppliers; however, they lack some strategies that enable Aldi to offer comparatively lower pricings for the products. The innovation is at less exploration in Coles. Cost saving strategy is one of the key points of Coles, which they use to mould the customers interest into their favor. It along with Woolworths has warmed up the supermarket sector in Australia with cheapest pricing for products and services. Unlike many other companies, Coles offer products in its natural form. They do so to construct a different position for the company. This is nothing but their extensive a pproach towards sustainability (Moscardo et al. 2013). Sustainability is a challenge for different companies from different industry (Schaltegger, Ldeke-Freund Hansen 2012). However, Coles has identified the ways to tackle such challenge to the most possible extent. The indigenous products, which the company offers, are one of its moves towards a sustainable business. The company has not kept itself confined to the groceries only but it has also targeted a potential market of liquor in Australia. Insurance and fianc sectors have also been felt as potential options. They are in continued search of new market. It is very evident that the company is trying to explore it towards maximum of opportunities. However, it has faced persistent issues from its suppliers, which is really a challenge as they wish to offer products in its natural form. The negotiation level is low with Coles, which is why it is a challenge to fulfill the commitments (Dwivedi et al. 2012). Coles unlike many reputed brands believe in approaching to the Australian resources, as they believe they can innovate with their supply chain if they rely on countrys resources. Unlike other companies Coles has believed in the Australian resource for its required products. As per its belief, Australia is one of those few countries that produce best food in the world. Importantly around 96% of all the fruits and vegetables have their resource in Australia itself. Additionally, 100% of all the meat they use from the Australian resource only. This in other words means that the company supports small companies and local people of Australia. They have their relationship with the local farmers, manufacturers and growers. The Coles Nurture Fund support various small medium size companies opportunities to apply for the loans and use it for inventing various innovative technologies. This is not helping the Coles to invest on hidden talents by giving loans but it also fostering the success fo r those small medium sized companies. On the other hand, the company had started Coles Indigenous Food Fund in the year 2001 to support the indigenous enterprises. A partial of the revenues generated is used for developing the supplying capabilities of indigenous enterprises (coles.com.au 2017). They are innovative, which is why they continually thought of having their own distribution centre, so that, they could secure their products and also have their deeper control on the food processing. Their innovative thoughts have worked in an appropriate direction as they had opened up processing facilities in few Australian locations such as New South Wales, Queensland, Victoria and South Australia. It is a unique concept because it produces packaged red meat including beef and lamb. It not only enhanced their sales capabilities as they can now get deeper into the change in sales behavior but it has also enhanced their control on processing, which is very important to give response in real time. Additionally, they can now easily bring changes in the inventories, which depend on the changing behavior of sales (Juan Ding et al. 2014). Coles has indigenous people that supply the company fresh meat. The company believes that Australia is one of those countries that offer best in quality foods. Farmers supply them fresh vegetables and fruits. The company is actually favoring the growth of local companies and communities. It has opened up some funds as well to foster the growth of indigenous enterprises. Twitter has been one of the favorite sites for the company. They used this to perfection as one of their tools for marketing. Private labeling is one key aspect o their marketing strategies, which has provided a unique opportunity to the company. Through this, the company has utilized the opportunities that are available in the supermarket chain industry in Australia. They became known face with this strategy (Icmrindia.org 2017). Recommendations and conclusions for Coles Coles is one of the two leading supermarket giants in Australia. It has high market shares only after Woolworths. However, the growth of market shares has now become stiffer as it is receiving a homogenous challenge from Aldi. Aldi has not yet crossed the market shares of Coles but the rate of growth of market shares is quite more to Coles. This is a challenge for Coles now to regain its position and maintain a good growth despite the homogenous challenge posed by Aldi. Coles need to target on the weaknesses rather than competing with Aldi for cheapest price. Coles already offers large range of products in its store. They should continue with the same strategy. Additionally, they should put more focus on stocking large range of products in stores. This would save time for people, which they need to invest while shopping in Aldi as Aldi has limited stocks. Moreover, it means that they need to shop for a long span of time to get their all required groceries. Aldi is famous for cheap pricing with high quality products that gives value to the customers money. Aldi has used various strategies such as offering plastic bags and stocking limited products in stores to attract a significant customer base; however, it has also limited the scope for customers. Customers would now require shopping for a long span of time to visit to significant number of Aldi stores to get the required groceries. The business model of the company is simple and efficient. They have a strategy to offer top in quality products at an unbelievably low prices. They have kept their low pricing strategy intact with all of their business strategies. They offered limited range of such products, which people shop on a daily basis. However, it has targeted probably every segment of customer with different products such as food, household supplies and beverages. They are always focused on giving customers value to their money, which is why they have always maintained high trans parency with their products. The company invests a significant sum on developing various new ideas to develop new properties and suppliers and to offer benefits to its employees. The company has sufficiently controlled its production through implementing lean production technique. Lean production offers reliability on many important factors such as just-in-time production. Just-in-time approach is very helpful for tracking the stock and ordering the required materials quite prior to it gets empty. This also help in avoiding wastages of materials, which is very frequent with over stocking of materials. They do not operate for 24 long hours in a day, which means this would reduce the cost of labor, the cost of rental and energy. Moreover, all the savings from this strategy would be passed to customers to show values to their money (Careers.aldi.us 2017). Unlike Coles, Aldi has suppliers from lower level manufacturers to bigger manufacturers. They probably look for getting the best in quality materials to show values to the customers money. They are very strict with their suppliers on product specification, which is in the line of top brands in the market. Moreover, Aldi never compromise on the products quality. On the other hand, they also know the importance of maintaining a healthy relationship with their suppliers. Their approach is balanced, which gives values to both their customers and the suppliers. They also offer fair and equal chances to many small suppliers as well. They are just needed to fill up the form supplied at its website and join their hands with the company if they are eligible to become suppliers. It gets the required materials from its different suppliers that range from small manufacturers to major manufacturers. They have also opened up ways to many others. They are just required to fill up the forms available at the companys website. Once they get the materials from their supplier, they process it in their distribution centre. Food processing is done in the distribution centre. They have smartly managed the complexity of stocking, which has challenged the supremacy of many organisations. Just-in-time approach is the one strategy, which they have used to have their utmost control on their stock. This approach is highly useful in avoiding any wastage of materials, which is very probable with no control on the stock. The product is then sent to the market when it is processed at its distribution centre. Aldi has mostly targeted the low budgeted income; however, it has now started to target the middle budget households as well. Unlike Coles and Woolworths, Aldi has mainly targ eted the grocery segments, which is also helping them in gaining a good market shares from the two retail market giants. They are mainly focused on cost leadership, differentiation and focus strategy. It likes to do things differently than Coles and Woolworths, which is why they offer plastic bags. It is very clear that Aldi wants to progress differently and earn maximum market shares (Chapman et al. 2013). Recommendations and conclusions for Aldi Aldi is the fastest growing supermarket store chain in Australia. It has challenged the business of two giants Coles and Woolworths. With some of its unique strategies such as plastic bags, trolley on paying gold coins, arranging multiple items in a lane etc., it has hampered the growth of one of the giants of duopoly Coles. However, they might not be able to sustain with the same strategy, as many customers prefer the way, which Coles use such as stocking high numbers of products in just one store. Aldi need to stock large number of products in a single store. This would prevent customers going to multiple stores of it to get their required stuffs. 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