Executive summary
The report is an expansion of an existing business. It entails the introduction of Asian foods in a large supermarket chain – Coles. The innovation will be enhanced through e-tailing of the commodities.
A number of business processes will be modified through the combination of these two strategies and they include: customer service, product receipt, order fulfilment, product selection and product search.
Introduction
Coles is a successful Australian retailing company that has approximately 11 million customers. It needs to gain competitive advantage by expanding its market share. This report has identified a gap in its product range and market demographics.
The organisation does not sell Asian food, yet there are plenty of immigrants in Australia. Furthermore, this same group has recorded greater internet use than other minorities in the population. Therefore, this report suggests the introduction of Asian foods in Coles’ retail portfolio, and sale of the commodities through the internet or physical stores.
Business elements and how they can be improved through e-tailing
The inputs involved at Coles are physical and conceptual (Jarvis 2005). The physical ones encompass materials, tools, and finance. The materials are the products that are sold in its shelves. This organisation sources its fresh foods from its own farms, and other partner farmers.
It gets manufactured goods directly from the concerned industries in huge quantities. This eliminates the need for intermediaries and other people who may inflate product prices. Currently, there is a challenge in the product choices because it does not cater to a certain group of people.
The company’s competitiveness can be improved if it incorporates this group of people. Asian food is missing from the company’s product offerings, yet this group has some of the most desirable characteristics. It has been shown that among the minorities in Australia, Asians happen to earn the highest amount of disposable income.
Furthermore, the proportion of persons who have completed higher education is greater than it is among other ethnic groups. Therefore, they have the financial resources needed to support a new portfolio of Asian foods at Coles. Their numbers have also been increasing tremendously in the country.
There is a need for product line expansion and customer base expansion targeting a new set of consumers. In terms of Coles’ physical inputs, the company normally uses part of its profits to reinvest back in the business. It would have more profits for its inputs if it changed its business processes slightly.
Most of its equipments centre on service automation, product movement or delivery, and transactions; it needs to change this. Business inputs can also be intangible. These encompass the information, ideas, data, values and beliefs of the stakeholders in this business.
Currently, the business needs to know more about its consumers or its market. Therefore, they require information gathering. They need to expand their business idea to include a new product-category and a new market segment. Employees’ social attitudes, abilities and expectations need to be altered so as to accommodate a new product type (Shaw 1999, p. 100).
The processes at Coles are currently focused on operational ones. Human and technical mechanisms are implemented in order to achieve business objectives. This is done through retail stores and online selling. Inputs are taken and then made available to consumers through these two major avenues.
Transportation of goods from manufacturers and farms is one such example. The company’s processes ought to be made more transformational. This can be achieved by using ideas as an input and transforming them into a new business element. In other words, this company is in need of a fresh innovation. The creative processes ought to be improved to increase market share.
Outputs at Coles are physical and conceptual. The physical ones are monetary (Coles happens to have high cash flows and profits that allow it to invest back into the business in order to keep generating more profits). The conceptual ones include influences and information.
Every sale or transaction made is an opportunity to learn more about the consumer. This acts as feedback that enables the company to provide better services to other consumers or to that same consumer. After-sale services can be improved at Coles, especially because the company sells a portion of its products online.
The purpose for creating this business was to offer convenience to the people living around Coles. The company wanted customers to get whatever they wanted at a cheap price and in one place.
The target consumers in this business are mainstream Australian consumers. In order to increase the company’s profitability, Coles will need to expand its customers’ demographics. Asian consumers can be specifically targeted for the new product.
Current business elements with the innovation
This innovation consists of three main concepts; product expansion, market expansion and internet retailing. It will introduce Asian foods to the market through online selling and in-store selling.
The new products that will be on offer include: sals and bean sauce, which all contain beans as the main ingredient, strongly flavoured and authentic Asian noodles, rice crisps, rice crackers, pickles and legumes, Asian meal kits and Asian sauces. This product will cater for the Asian market in Australia.
It will also provide a potential area for growth among mainstream Australian customers. Many individuals are now developing a taste for Asian foods and strong flavours, so these products can be quite promising in the market (Promar International 2000, p. 5).
In order to carry out a systemic analysis of the new and improved business processes involved at Coles, it will be useful to use the consumer mercantile activities as suggested by Kalakota and Whinston (1997, p. 45). It is a model that was designed to evaluate how businesses could be enhanced through the internet.
These activities are eight, and they include: product service search, comparison shopping, product selection, negotiation of terms, order placement, payment, product receipt and customer service support.
The product service search is one of the mercantile activities that will be altered through this innovation. Consumers who are interested in finding a product will usually look for it physically in stores or through catalogues and phone inquiries.
However, through the use of e-tailing, customers can use search engines in order to find Asian food. Coles will be one of the first organisations that will be found on search engines when customers are looking for Asian foods in Australia. The internet will aid product searches by giving information about the product even before putting it on the shelves.
Customers can prepare to purchase it online, or may choose to go and inspect it in the physical stores. If the latter case is true, they will be given information about the exact in-store locations of the Asian foods, so that they can save time on it.
Therefore, the internet will be useful for driving consumers to the online Coles store as well as the physical retail stores. They may also be told about the availability of the products; i.e., whether they are in stock or out of stock at that particular time. This way, consumers will get information more quickly and will respond to the provision of the services.
It has been shown that Asian consumers account for 37% of all internet use; 27% of all internet users are Europeans while 20% are North Americans (Turban et al. 2008, p. 33). This means that such individuals are likely to do product searches for their cuisines using the internet.
Product comparisons are usually done through an analysis of the attributes available for a particular product. Catalogues and review adverts have been the main method for Coles.
It has not used online avenues for this purpose. In this introduction of Asian foods, Coles will offer its shoppers mix-and-match options, so that they can select complementary dishes. For those who may not be too particular about the kind of Orient dishes they want, the online service will allow them to compare prices for various Oriental foods.
They may also compare attributes such as the use of certain spices or prevalence of particular ingredients like beans in the dishes selected. Customers will have a decision support system that will offer them alternatives if they can’t find the Asian dish they are looking for.
Product selection occurs when the concerned consumers select the product that meets their needs. As the customer selects his or her product online, he or she will be given information about the weight, ingredients and method of preparation of the dishes.
If a customer chooses to buy the commodity physically, he or she will find this information in the product package and additional tags. During this phase, customers will also be given additional information about other related foods that they may consider purchasing in the future (Otto & Chung 2007, p. 6).
Negotiation of terms entails presenting the customer with delivery, pricing and loan terms. Since the product under consideration is Asian food, delivery will need to be done promptly after an online purchase.
Delivery costs will be displayed on the website promptly so that customers do not have to be apprehensive about any hidden costs. This aspect of negotiation of terms will only be applicable to online buyers as other terms will be fixed in the physical stores (Shop online with Coles 2011).
Order fulfilment or order placement will involve exchanging information between Coles and shoppers. Those consumers who will choose to buy the product will do order fulfilment by simply taking it from the shelves to the counter. However, this may be more elaborate for online purchases.
Customers will have to know the options that are available in order to fulfil an order. It will be crucial to make this as simple as possible. Some consumers tend to get discouraged when they have to do so much. A very visible icon for adding products to the shopping cart will be used on the website, so that consumers do not have to worry about the order fulfilment process.
The next step will be payment. In traditional Coles stores, payments will be cleared at the counter through cash, credit cards and personal cheques with the right identification. However, for the online consumers, it will be crucial to clear a few things. Security concerns about credit card information will be addressed. Coles has already been in the online business.
This means that it already has strict rules concerning procedures and protocols that facilitate secure transactions (About Coles 2011), (Mastercard security rules and procedures 2009). The payment of Asian dishes will be done through the conventional methods in use currently.
The product receipt phase will also be altered through this innovation. Customers who get the dishes from physical stores will get them instantly. On the other hand, if they are buying them online, delivery issues will need to be considered.
Coles has been delivering its products online successfully. It does this through authorisation of product pick-ups from certain designated stores and by instatement of delivery times for those concerned. Since these will be pre-made dishes, their shelf-lives are quite short and delivery times need to be edited.
Coles will invest in additional transportation services to decrease product delivery times. These products will therefore lead to an improvement in this area of their business processes.
Customer service and support will be enhanced through this particular innovation. Consumers will be emailed about new offers on all Asian foods. They will be told about various cooking and serving methods through the support websites. In case of wrong order delivery, customers can notify Coles through their website and hence get easy product replacements.
Consequences of the innovation not occurring
Without this innovation, the Asian community will continue to be sidelined at Coles, yet they can offer a huge market for their products. It will also cater to the increasing diversity of tastes among mainstream Australian consumers who are embracing orient dishes (Jackson 2009, p. 4).
The use of the internet was crucial to this endeavour because it will offer consumers a wide choice. They will not have to be limited by the choices available in a particular retail store. Asian consumers and other market segments will be able to discriminate on price quite effectively through these methods.
They will also get a chance to switch product placements at their own will. Coles will get an opportunity to practice customer relationship management on a new category of consumers. They will give them more support, and thus increase the probability of repeat sales.
Conclusion
This innovation could be the solution to Coles’ market share challenges. Not only will it be reaching out to a new customer segment, it will also be offering a fresh commodity that could be used by mainstream Australians too. The business processes will be enhanced through e-tailing, and this will make the innovation more likely to succeed.
References
About Coles, 2011, Coles. Web.
Jackson, K. 2009, ‘Demand for Asian and gluten free foods’, HKTDC magazine, 24 July, p. 4.
Jarvis, C., 2005, Business systems. Web.
Kalakota, R. & Whinston, A. 1997, Electronic commerce: a manager’s guide, Addison Wesley, Reading, MA.
Mastercard security rules and procedures-merchant edition, 2009, Mastercard. Web.
Otto, J., & Chung Q. 2007, ‘A framework for cyber-enhanced retailing: integrating e-commerce retailing with brick and mortar retailing’, Electronic markets journal, vol. 10, no. 3, pp1-7.
Promar International 2000, Orienting the US food market, Promar International. Web.
Shaw, M. 1999, ‘Electronic commerce: review of critical research issues’, Information systems frontiers, vol. 1, no. 1, pp.95-106.
Shop online with Coles 2011, Coles. Web.
Turban, E., King, D., Marshall, P., Vielhand, D., & Lee, J. 2008, Electronic Commerce 2008: A managerial perspective, Pearson Education Ltd, London.
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