Analysis of environment, industry and SWOT analysis

The Australian food retailing industry is characterized by a high take aim of competitiveness. The intense competitiveness has led to an environment in which emphasis on cost efficiency has become the critical success factor. In the oecumenical environment, the key to maintaining competitiveness has become ensuring cost efficiency by dint of businesslike supply chain curbment.This efficiency can be promoted technologically. Economic factors be in like manner important in the environment. These factors manifest themselves in high levels of dwelling house debt, a low national rate of saving, fall house prices, falling oil prices and increases in unemployment and interest rates. In Aldis case, these environmental factors argon likely to exercise a negative influence on consumer spending.The affright of new entrants is high in this industry. For example, Aldi faces the terror of its main European equalise Lidl entering the Australian marketplace. Therefore the threat of subs titute overlaps is besides high. This threat is underscored by the fact that most competitors argon carrying house brands which are enabling them to offer high quality at a low price. This has resulted in a high level of competitive rivalry.The main competitors currently are Woolworths and Coles-Myer. These are the two major national duress. There are also smaller regional players such Action, IGA and Franklins. These companies are focusing on cost efficiencies and therefore sustainability of competitive advantage has become difficult to maintain. talk terms power of customers in the FMCG industry is also high. However the bargaining power of suppliers is not that high. Costs in this case have been streamlined through building long term dealing.Aldis main strength is the attend of decentralization empowering managers. There is a high degree of delegation in the telephoner. The connections weakness is in its lack of investment in marketing. Currently this is not a problem but in the future, as new entrants stake out a claim in the industry, the company might have to invest in aggressive promotional strategies (cited in Hill, 2008).However the company is not structured to shift focus accordingly. Lack of market research might also become a problem in case of increased competitiveness. The opportunity for the company is to move into other Australian states and territories.In the immediate time frame, the company should focus on South Australia because of its propinquity to its current locations. The threat is the rising level of competition not solitary(prenominal) from the existing players but also from new entrants. The competitive threat is existence created in terms of cost improvements and produce diversifications (cited in Aaker, 2004).Key resources and capabilitiesThe source of Aldis competitive advantage is cost leadership. Implementation of this strategy has been facilitated by maintaining pricey relations with channel members and ensuring employee satisfaction.Channel members include the suppliers and the customers. Aldis strategic focus is to view maximum customer satisfaction by maintaining a product cultivate that is in alignment with customer tastes and preferences. The company also maintains good relations with the suppliers by maintaining a shared information network.Its cultural orientation is also unique in terms of facilitating the highest degree of decentralization and delegation. This gives the managers a sentience of ownership over their processes and as a result they are attached to the continuous improvement process. This is a critical success factor for the company in the highly competitive environment in which it operates and these resources ensure a sustainable competitive advantage.What gives Aldi a sustainable competitive advantage is its express mail product range that consists of house brands. The advantage of maintaining this orientation is that strategies against the threat of product diff erentiation can be implemented.This is particularly relevant in Aldis case because it faces intense competition from Woolworths and Coles-Meyer which are major national chains and draw their competitive advantage from maintaining a widely diversified product portfolio.Therefore Aldi has to position itself as a low cost provider of products of similar quality. This is facilitated through cutting costs in areas such as not providing free shopping bags, surcharges on credit card payments and motivating customers to manage their own shopping trolleys.These strategies enable the company to cut down the size of its manpower and therefore reduce costs. Being cost conscious is the outset part of its guiding philosophy. The second and third parts of the philosophy are related to ensuring satisfaction with customers and suppliers.