Three biggest supermarket brands in Australia: Coles, Woolworths and Aldi (Yahoo Finance, 2023)
Competitor
Competitor is a business rival in the same market for products or services offered by the business
Example: Adidas vesus Nike, Apple vesus Samsung,...
Competitive Advantage
Competitve Advantage is the ability of a business to deliver strategies that ensure it has an 'edge' over competitors.
To attain a sustainable competitive advantage, businesses need to plan to produce a high-quality good or service at the lowest cost, or aim to offer a superior offering.
Example: In recent years, Netflix has attracted a mass market because it offers customers the convenience of a wide variety of high-quality streamed media at a low price by allowing customers to share their streaming service with others.
Key Takeaways for Businesses
During the planning stage, businesses should be aware of existing competitors and also monitor the environment for potential newcomers.
Successful competitors watch daily what their business rivals are doing (i.g. product offerings, customer services and prices) to adjust their business planning and strategies.
Example: Woolworths, Coles and Aldi Major food retailers, Coles and Woolworths, constantly watch each other’s pricing. One supermarket chain will have a product on special one week, the other the following week. ALDI provides an additional challenge for these two chains with their lower pricing business model.
Money spent by Australian grocery buyers aged 14+ (weighted to Australian households)
Source: Roy Morgan Single Source Australia, January 2019 – December 2019
In addition to competitive pricing, Woolworths offers additional inducements, incentives, memberships and loyalty schemes via its mobile app called Rewards. These are all considered as other strategies that Woolworth uses to gain a competitive advantage. Hence, Woolworths has constantly occupied the largest market share (32.9%) in Australia for years.
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