Duopoly Coles vs Woolworths Essay Example for Free

Duopoly Coles vs Woolworths EssayFor most of us its retri barelyory part of routine life decisions. Where to shop for the week, Coles or Woolworths? Should I drink Pepsi or Coke today? Do I go to MYER or David J aces to buy new sterilize up from? We take in consideration a few prices, how convenient it lead be to get at that place, what would we rather do, and thats it. But theres some liaison extensiveger behind this. What is the opposition on much(prenominal) handsome rivals, for us and the economy? Its non simply somewhat personal choices. Living and studying in Australia for the past 11 months, going to do my grocery shopping at Coles or at Woolworths has become part of my routine. And because it is such an ordinary thing to do, we tend to forget that we make part of a much bigger picture, and ar contributing to some(prenominal) factors regarding the Australian economy. However, this race for the best has its advantages and disadvantages, and of course, this is affecting us as well. The Price WarOne of the advantages of this never ending battle for us customers, argon the imprint prices. Because there is such a big rival for prices, each of the supermarket brands volition try to make it as affordable as possible to the consumer, as a reaction to get competitive advantage. One big example of this war is the milk price. Both supermarkets potty deal out milk for $1. It is truly difficult to make any profit if youre selling products at such a low price, as Rob Murray, the chief executive for the food and beverage assembly Lion dry landd. However this issue does not affect us consumers on a day-to-day basis, and the low prices keep us happy and of course, keep us shopping at these big supermarkets. Everyone wins with the Rewards Programs other commodity thing for the shoppers at these deuce big chains is the rewards systems they have. And we win again. Despite the cheaper price war having been lead by Coles the majority of times, Woo lworths seems to have another way of fighting. Their CEO Grant OBrien came out with a new strategy the Everyday Rewards. The more the customer shops, the more discount they get.Users of the cards get scoopful offers, discount on fuel and mass unconstipated earn Qantas flyer points. And not only in Woolworths, they have retail partners like Big W, Dick Smith and Cellarmasters that impart in addition benefit the customer. Coles also has their rewards system, the Flybuys. With this card, apart from the exclusive offers on Coles and affiliated firms products, the customer collects points at every purchase, which can later be changed by different prizes. But this is not only good for the consumers. Its basic onlyy the company saying that they will give us prizes, in exchange for our information. A Rewards system allows the firm to collect data about their customers, which they can use in their favour, to create loyalty and promote trust. With the Everyday Rewards, Woolworths has been able to collect a good amount of information, while Flybuys is thus far in the process of build its strength. Easy and SimpleAnother very good thing for the customer about these two big brands is the convenience. Everywhere we go, every big shopping center and busy area in a suburb will have at least one of the two, if not both. Coles and Woolworths have very strong analysts that will know where to place their shops, and if there is an area wishing one, its probably not because they are still to build one, but because that are would not be so profitable yet. So for us, wherever we want to shop, we can always grow one of these, and do not have to travel any long distance to get to one of these stores, as they are located almost everywhere too. so far for the most loyal customer from the meek shops, sometimes its a lot more convenient to visit one of the big supermarkets, and they will end up buying something from there. Someone susceptibility be losingUnfortunately its not all flowers. For us to be paying such low prices, someone is losing money somewhere, and its not the big supermarkets. Because they are such big brands, suppliers need to have their products in their shelf. Coles and Woolworths claim they have built very strong relationships with their suppliers, and it might be true, but a lot of the smaller suppliers are getting ripped off. They strong-armer the suppliers to sell their products at really low prices, and they know they have this power, otherwise they wont sell enough. They will also charge more to have theproducts placed in good positions on their shelves. A lot of the times the prices suppliers are charging are so small, that they are struggling to survive with these sales, and it generates another livelong big problem. Creating EnemiesThe ones losing with the big duopoly from Coles and Woolworths are the smaller suppliers, and the smaller shops too. But not every customer is just happy in paying small prices, they want to make sur e everyone involved is protected. For this reason, there is a big pressure on ACCC from suppliers and the smaller businesses which dont have a demote to compete. on that point is a party called Australian Green, and they fight strong against the practices these two supermarkets have againg farmers and small suppliers. Their objective, as they state on the website, is to tackle the supermarket duopoly, and the measures they are willing to take are strong. For example, put a temporary toss out on expansion from Coles and Woolworths, or stopping this duopoly to purchase agricultural land, so they cant verify the whole supply chain. The ACCC is also holding an investigation about the bullying of suppliers. While most of us will not care that much about the situation these suppliers are in, or will not have option to shop somewhere else, there is a big throng who does care. These are customers who are willing to pay more, but do their groceries in a small shop so they can help that business, and also do not buy the products from exploited suppliers. No more competitionUnfortunately, the group of very unhappy customers mentioned before is not large enough to make sure the small businesses will survive. With such low prices and big chains, the two major supermarkets will not give a chance for a smaller business to survive in the middle of this war. It is just impossible to compete with the two major supermarkets prices and their powerful middlemen, and the small shops start disappearing. Without competition, a lot of the products that do not have blank space on Coles or Woolworths shelves may also disappear, and this will also have a big impact on the economy as there is unemployment rising. This process will damage Australia foods industry, and with the lack of new firms it might mean a lack of new products, and the whole market can go stale. Tricking thecustomersTo have products at such low prices, as it was mentioned before, the suppliers will end up losing. But the customers might also lose sometimes. For example, the free range eggs case. Both Coles and Woolworths claim that they want to help customers take turns from industrialised to free range eggs, by cutting the prices on the second one. However, the suppliers pay for the price that we are not, as it is impossible to have a free range egg production at such low prices. The customer will end up buying free range eggs thought process they are contributing to improve the animal welfare standards from the supermarkets, however, they do not know that they are still purchasing the industrialised free range eggs, the free range version of these two big supermarkets.Even though it seems there are more disadvantages to small businesses and suppliers than there are advantages for us customers, it is not the number, but the quality of these advantages that count. This battle is far from the end, because it is not likely that the masses will stop shopping at Coles or Woolworths anytime so on. However, the ones that are more conscious about it can only expect that it will make a difference in the future, when the ACCC take strong measures or the political inaction ends, and someone who really cares and is strong enough to change this is put in charge. In the meanwhile, we will keep enjoying the convenience to just walk for 10 minutes and find a shop, or receive rewards and discount on products and even fuel, and keep ignoring all the ones losing from this. In the end, it is a battle and someone will lose. If not the big duopolistic market, a part of the population will pay.