'Duopoly Coles vs Woolworths\r'

'Australian Business Environment A Duopolistic Market Structure: Who Wins? For more or less of us its however part of everyday manner decisions. Where to shop for the week, Coles or Woolworths? Should I imbibition Pepsi or Coke today? Do I go to MYER or David J cardinals to steal clean confound up from? We resign in consideration a a few(prenominal) prices, how convenient it leave be to trip up in that respect, what would we rather do, and thats it. tho theres something volumedger merchant ship this. What is the impact on such massive rivals, for us and the sparing? Its non on the button ab come out of the c turn a losst personal choices.Living and studying in Australia for the ast 11 months, going to do my marketplace shopping at Coles or at Woolworths has become part of my routine. And because it is such an banausic thing to do, we t kibosh to forget that we wreak part of a much larger picture, and be contri onlying to several factors regarding the Aus tralian economy. nonwithstanding, this race for the best has its advantages and disadvantages, and of course, this is affecting us as well. The Price War unmatch able-bodied of the advantages of this never ending battle for us guests, argon the modestly prices.Because there is such a big disceptation for prices, sever exclusivelyy of the supermarket rands pass on try to make it as affordable as possible to the consumer, as a reaction to get fight standardised advantage. One big example of this war is the milk price. deuce supermarkets send packing swop milk for $1 . It is very knockout to make any profit if youre merchandising products at such a broken in-toned price, as Rob Murray, the chiet executive tor the t beverage group Lion stated. However this issue does not affect us consumers on a day-to-day basis, and the low prices advance us halcyon and of course, keep us shopping at these big supermarkets.Everyone deliver the goodss with the Rewards Programs other good thing for the shoppers at these two big chains is the rewards organizations hey ask. And we win again. Despite the cheaper price war having been scoop up by Coles the majority of times, Woolworths seems to open some other way of fghting. Their CEO Grant OBrien came out with a new strategy: the insouciant Rewards. The more the guest shops, the more rabbet they get. Users of the cards get exclusive offers, ignore on fuel and can even earn Qantas flyer points.And not simply in Woolworths, they hire retail partners like Big W, Dick Smith and Cellarmasters that provide to a fault benefit the customer. Coles also has their rewards system, the Fly procures. With his card, apart from the exclusive offers on Coles and affiliated firms products, the customer collects points at every grease ones palms, which can later on be changed by different prizes. But this is not only good for the consumers. Its fundamentally the company saying that they will unfold us prizes, in ex change for our information.A Rewards system allows the firm to collect data round their customers, which they can use in their favour, to constrain loyalty and promote trust. With the Everyday Rewards, Woolworths has been able to collect a good core of information, while Flybuys is silent in the solve of build its strength. Easy and Simple Another very good thing for the customer about these two big brands is the convenience. everywhere we go, every big shopping spunk and busy bea in a suburb will have at least one of the two, if not both.Coles and Woolworths have very untouchable analysts that will dwell where to place their shops, and if there is an argona destinying(p) one, its probably not because they argon notwithstanding to build one, except because that argon would not be so profitable yet. So for us, wherever we want to shop, we can perpetually fall out one of these, and do not have to travel any massive distance to get to one of these tores, as they are l ocated almost everywhere too. Even for the most loyal customer from the shrimpy shops, sometimes its a mussiness more convenient to visit one of the big supermarkets, and they will end up buying something from there.Someone capacity be losing unfortunately its not all flowers. For us to be profitsing such low prices, person 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 reinforced very strong relationships with their suppliers, and it ight be true, still a heap of the smaller suppliers are getting ripped off. They â€Å"bully the suppliers to sell their products at very low prices, and they know they have this power, differently they wont sell luxuriant.They will also way more to have the products placed in good positions on their shelves. A address of the times the prices suppliers are charging are so small, that they are strugglin g to bear with these sales, and it generates other wholly big problem. Creating Enemies The 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 accepted everyone involved is protected.For this reason, there is a big pressure on ACCC from suppliers and the smaller businesses which dont nave a hazard to compete. there is a party called Australian Green, and they fght strong against the practices these two supermarkets have againg farmers and small suppliers. Their objective, as they state on the website, is to â€Å"tackle the supermarket duopoly, and the measures they are willing to take are strong. For example, aim a temporary ban on expansion from Coles and Woolworths, or contraceptive diaphragmping his duopoly to purchase agricultural land, so they cant control the whole supply chain.The ACCC is also holding an probe about the bullyi ng of suppliers. While most of us will not sustainment that much about the situation these suppliers are in, or will not have option to shop somewhere else, there is a big group who does care. These are customers who are willing to pay more, but do their groceries in a small shop so they can function that business, and also do not buy the products from exploited suppliers. No more competition Unfortunately, the group of very unhappy customers mentioned forrader is not large nough 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 unacceptable to compete with the two major supermarkets prices and their regnant middlemen, and the small shops start disappearing. Without competition, a lot of the products that do not have property on Coles or Woolworths shelves may also disappear, and this will also have a big impact on the econ omy as there is unemployment rising. This process will damage Australia oods industry, and with the lack of new firms it might mean a lack of new products, and the whole market can go stale.Tricking the customers To 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 run for eggs case. Both Coles and Woolworths claim that they want to help customers convert from industrialised to free pose eggs, by cutting the prices on the second one. However, the suppliers pay for the price that we are not, as it is unsufferable to have a free epitome egg production at such low prices.The customer will end up buying free range eggs thinking they are change to improve the animal welfare standards from the supermarkets, however, they do not know that they are still purchasing the â€Å"industrialised” free range eggs, the free range version of these two big supermarkets. Even t hough 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 soon.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 inactivity ends, and person who genuinely 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 reject 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.\r\n'