IA2 Investigation
Year 12 Business
IA2 Investigation
IGA Australia
Business Report
Contents
TOC o "1-3" h z u 1Introduction PAGEREF _Toc159482071 h 12Business situation and competitive environment PAGEREF _Toc159482072 h 13SWOT Analysis PAGEREF _Toc159482073 h 14USP Analsyis PAGEREF _Toc159482074 h 25Interpretation of SWOT and USP PAGEREF _Toc159482075 h 36Evaluation PAGEREF _Toc159482076 h 46.1Operational strategy PAGEREF _Toc159482077 h 46.1.1effectivness PAGEREF _Toc159482078 h 56.1.2Competitiveness PAGEREF _Toc159482079 h 56.2Marketing strategy PAGEREF _Toc159482080 h 56.2.1Efficiency PAGEREF _Toc159482081 h 56.2.2Stakeholder satisfaction PAGEREF _Toc159482082 h 67Decision and Recommendations PAGEREF _Toc159482083 h 68Reference List PAGEREF _Toc159482084 h 7
Introduction
IGA has been operating within Australia for over 38 years in the retail grocery industry and is currently in its maturity phase due to its performance indicating a high user share of 28% in the grocery market. IGA must implement marketing and operational strategies to drive in customers due to poor customer loyalty and issues in retaining customers which will increase sales and market share for the business.
Business situation and competitive environmentAs of the 2023 financial year, IGA contains 7% of the Australian grocery market share (Statistica, 2024) and has a yearly sales growth of 2.8%. IGA has focused on opportunities such as further expansion with the aims of introducing new stores, customers, and categories as well as store upgrades. The business shows steady income due to its large network of over 1,600 stores. The business has opportunities for further expansion as their target pan is to have 90% of their current stores refreshed by the 2026 financial year. Large changes in market condition such as the recent covid-19 outbreak, are one threat towards IGA as it has required them to readily adapt. The business model of supplying independent family-owned business continues to be a challenge of remaining competitive for IGA.
This industry exhibits many traits of oligopolistic competition and particularly, is a duopoly. There are only a few highly competitive and hostile businesses within the retail grocery industry across Australia, where the leading four businesses, Woolworths, Coles, Aldi and IGA, account for more than 80% of the total market share and the leading 2 businesses, Coles and Woolworths, have the largest proportion of market share. Any action or strategy initiated by one business will be noticed and reacted to by the others.
SWOT AnalysisStrengths
Place:
1,600 stores operating within Australia (Annual IGA Report, 2023)
Has the widest retail distribution network in Australia (Annual IGA Report, 2023)
Has a social media presence with Facebook and Instagram
Partnership:
The largest supplier to independent supermarkets in Australia (Annual IGA Report, 2023)
Product:
Has their own labelled brand Community Co
Price:
Sales account to $9.6B in 2023 (Annual IGA Report, 2023)
Weaknesses
Promotion:
There is a lack of brand awareness for this business towards customers
Opportunities
Expansion:
The size of each store could be improved in size.
Products:
IGA brand products are less recognised in comparison to major supermarket chains.
Threats
Competition:
There is high competition from the two large supermarket chains (Coles and Woolworths) (Statistica, 2024)
USP Analysis
IGA
(IGA.com.au) Coles
(Coles.com.au) Woolworths (Woolworths.com.au)
Convenience/ Location 1400+ Stores
Click & collect available for selected shores
Delivery available for selected stores
Online presence available for selected stores
Free delivery over $100 850+ Stores
Click & Collect
Delivery
Online Shopping Presence
Free delivery over $250 1,095+ Stores
Click and Collect
Delivery
Online Shopping Presence
Free delivery over $75
Rating 6 7 9
Although, IGA has the highest number of physical stores across Australia, Woolworths has the best online presence with click & collect and delivery followed by Coles.
Loyalty Programs For every $1 spent, 1 point is gained
Point converts to 1c that can then be claimed off a persons grocery bill
Rewards members receive automatic entry into prize draws and exclusive travel deals For every $1 spent, 1 point is collected
2,000 points can be used for $10 off a grocery bill
points can be used to purchase items via their rewards store
points can be used for a vacation For every $1 spent, 1 point is gained
2,000 points can be used to get $10 off a grocery bill
2,000 point can be exchanged for 1,000 Quantas points
Rating 8 9 7
The loyalty program that Coles offers, provides more value and benefit for a customer than IGA or Woolworthss rewards program as Coles offers money off a grocery bill, flybys credits and the purchase of different items through their rewards store.
Operating Hours Slightly varying hours between stores
Each day most stores are open at 6am and close 10/12pm
open everyday including public holidays store hours are the same per store with some variations
Monday Saturday: 7am 9pm
Sunday: 9am 6pm
Open every day except public holidays Varying hours between locations
Monday Saturday: 7am 9pm
Sunday: 9am 6pm
Open every day except public holidays
Rating 9 7 7
Even though all businesses have varying store opening hours across their locations, IGA appears to have the best operating hours due to being open earlier at 6am, later at 10/12pm and on public holidays.
Grocery bill price (29 general items) $142.79 $145.23 $141.83
Rating 7 6 8
Although there was only a slight variation in grocery prices, Woolworths had the slightly cheaper average grocery prices followed by IGA and then Coles.
[Insert graph here]
The unique selling proposition of IGA is its long operating hours that it offers to customers.
Interpretation of SWOT and USP
There is a clear relationship between IGA and the increased ability of the business to compete with competitors. This strategy increased the number of physical stores the business operates
Evaluation
The following strategies should be implemented to assist IGA to raise awareness of the business. This should have the flow on effect of helping to increase the number of people entering the store, increasing sales and market share for the business.
Operational strategy
Total quality management which focuses on the customer and continuous improvement is a strategy that should be implemented by IGA. Particularly, IGA should adopt an improved customer experience by using just walk out technology which allows customers to skip checkout lines, making an easier and fast shopping experience. To do this, customers would scan their cards at an entry gate to enter the store, pick up or put down their grocery items as they please and then leave the store through an exit gate once there finished.
Stakeholder SatisfactionThe satisfaction of customers and owners of introducing just walk out technology will be determined. With no checkout lines implemented in store, customers will find grocery shopping to be a much faster shopping experience than traditional checkout lines. Customers wont have to wait in long checkout lines for several minutes after they have finished shopping instore as they can just walk right out the store. This innovation will reduce the owners expenses as less staff will be needed to be employed within the business. Additionally, theft levels will be significantly reduced as grocery items will be automatically charged to customers. The proposed strategy will therefore satisfy customers and owners through a faster and more convenient way to checkout groceries.
Effectiveness
Marketing strategyRetailtainmentefficiency
competitiveness
Decision and RecommendationsJust walk out technology and retailtainment should be implemented by IGA to raise awareness of the business. IGA must implement these strategies to help drive people to visit their store, increasing sales and market share for the business. It is recommended that IGA:
Reference List
Year 12 Business
IA2 Investigation
IGA Australia
Business Report
Contents
TOC o "1-3" h z u 1Introduction PAGEREF _Toc159482071 h 12Business situation and competitive environment PAGEREF _Toc159482072 h 13SWOT Analysis PAGEREF _Toc159482073 h 14USP Analsyis PAGEREF _Toc159482074 h 25Interpretation of SWOT and USP PAGEREF _Toc159482075 h 36Evaluation PAGEREF _Toc159482076 h 46.1Operational strategy PAGEREF _Toc159482077 h 46.1.1effectivness PAGEREF _Toc159482078 h 56.1.2Competitiveness PAGEREF _Toc159482079 h 56.2Marketing strategy PAGEREF _Toc159482080 h 56.2.1Efficiency PAGEREF _Toc159482081 h 56.2.2Stakeholder satisfaction PAGEREF _Toc159482082 h 67Decision and Recommendations PAGEREF _Toc159482083 h 68Reference List PAGEREF _Toc159482084 h 7
IntroductionIGA has been operating within Australia for over 38 years in the retail grocery industry and is currently in its maturity phase due to its performance indicating a high user share of 28% in the grocery market. This business report will help IGA to increase their market share within its maturity stage. IGA must implement marketing and operational strategies to drive in customers due to poor customer loyalty and issues in retaining customers which will increase sales and market share for the business.
Business situation and competitive environmentAs of the 2023 financial year, IGA contains 7% of the Australian grocery market share (Statistica, 2024) and has a yearly sales growth of 2.8%. IGA has focused on opportunities such as further expansion with the aims of introducing new stores, customers, and categories as well as store upgrades. The business shows steady income due to its large network of over 1,600 stores. The business has opportunities for further expansion as their target pan is to have 90% of their current stores refreshed by the 2026 financial year. Large changes in market condition such as the recent covid-19 outbreak, are one threat towards IGA as it has required them to readily adapt. The business model of supplying independent family-owned business continues to be a challenge of remaining competitive for IGA.
This industry exhibits many traits of oligopolistic competition and particularly, is a duopoly. There are only a few highly competitive and hostile businesses within the retail grocery industry across Australia, where the leading four businesses, Woolworths, Coles, Aldi and IGA, account for more than 80% of the total market share and the leading 2 businesses, Coles, and Woolworths, have the largest proportion of market share. Any action or strategy initiated by one business will be noticed and reacted to by the others.
SWOT AnalysisStrengths
Place:
1,600 stores operating within Australia (Annual IGA Report, 2023)
Has the widest retail distribution network in Australia (Annual IGA Report, 2023)
Has a social media presence with Facebook and Instagram (Facebook, 2024 & Instagram, 2024)
Partnership:
The largest supplier to independent supermarkets in Australia (Annual IGA Report, 2023)
Product:
Has their own labelled brand Community Co (IGA, 2024)
Price:
Sales account to $9.6B in 2023 (Annual IGA Report, 2023)
Weaknesses
Promotion:
There is a lack of brand awareness for this business towards customers (IGA, 2024)
Only selected stores have an online shopping or browsing available (IGA, 2024)
Opportunities
Expansion:
The size of each store could be improved in size. (Annual IGA Report, 2023)
Products:
IGA brand products are less recognised in comparison to major supermarket chains. (Statista, 2023)
Threats
Competition:
There is high competition from the two large supermarket chains (Coles and Woolworths) (Statistica, 2024)
USP Analysis
IGA
(IGA.com.au) Coles
(Coles.com.au) Woolworths (Woolworths.com.au)
Convenience/ Location 1400+ Stores
Click & collect available for selected shores
Delivery available for selected stores
Online presence available for selected stores
Free delivery over $100 850+ Stores
Click & Collect
Delivery
Online Shopping Presence
Free delivery over $250 1,095+ Stores
Click and Collect
Delivery
Online Shopping Presence
Free delivery over $75
Rating 6 7 9
Although, IGA has the highest number of physical stores across Australia, Woolworths has the best online presence with click & collect and delivery followed by Coles.
Loyalty Programs For every $1 spent, 1 point is gained
Point converts to 1c that can then be claimed off a persons grocery bill
Rewards members receive automatic entry into prize draws and exclusive travel deals For every $1 spent, 1 point is collected
2,000 points can be used for $10 off a grocery bill
points can be used to purchase items via their rewards store
points can be used for a vacation For every $1 spent, 1 point is gained
2,000 points can be used to get $10 off a grocery bill
2,000 point can be exchanged for 1,000 Quantas points
Rating 8 9 7
The loyalty program that Coles offers, provides more value and benefit for a customer than IGA or Woolworthss rewards program as Coles offers money off a grocery bill, flybys credits and the purchase of different items through their rewards store.
Operating Hours Slightly varying hours between stores
Each day most stores are open at 6am and close 10/12pm
open everyday including public holidays store hours are the same per store with some variations
Monday Saturday: 7am 9pm
Sunday: 9am 6pm
Open every day except public holidays Varying hours between locations
Monday Saturday: 7am 9pm
Sunday: 9am 6pm
Open every day except public holidays
Rating 9 7 7
Even though all businesses have varying store opening hours across their locations, IGA appears to have the best operating hours due to being open earlier at 6am, later at 10/12pm and on public holidays.
Grocery bill price (29 general items)
(Ciaramidaro, 2024) $142.79 $145.23 $141.83
Rating 7 6 8
Although there was only a slight variation in grocery prices, Woolworths had the slightly cheaper average grocery prices followed by IGA and then Coles.
The unique selling proposition of IGA is its long operating hours that it offers to customers.
Interpretation of SWOT and USP
There is a clear relationship between IGA and the increased ability of the business to compete with competitors. This strategy increased the number of physical stores the business operates.
EvaluationThe following strategies should be implemented to assist IGA to raise awareness of the business. This should have the flow on effect of helping to increase the number of people entering the store, increasing sales and market share for the business.
Operational strategyTotal quality management which focuses on the customer and continuous improvement is a strategy that should be implemented by IGA. Particularly, IGA should adopt an improved customer experience by using just walk out technology which allows customers to skip checkout lines, making an easier and fast shopping experience. To do this, customers would scan their cards at an entry gate to enter the store, pick up or put down their grocery items as they please and then leave the store through an exit gate once there finished.
Stakeholder SatisfactionThe satisfaction of customers and owners of introducing just walk out technology will be determined. With no checkout lines implemented in store, customers will find grocery shopping to be a much faster shopping experience than traditional checkout lines. Customers wont have to wait in long checkout lines for several minutes after they have finished shopping instore as they can just walk right out the store. This innovation will reduce the owners expenses as less staff will be needed to be employed within the business. Additionally, theft levels will be significantly reduced as grocery items will be automatically charged to customers. The proposed strategy will therefore satisfy customers and owners through a faster and more convenient way to checkout groceries.
Effectiveness
Marketing strategyRetailtainmentefficiency
competitiveness
Decision and RecommendationsJust walk out technology and retailtainment should be implemented by IGA to raise awareness of the business. IGA must implement these strategies to help drive people to visit their store, increasing sales and market share for the business. It is recommended that IGA:
Reference List
