Amazon is Disrupting Major Supermarkets

Scenario: Amazon is Disrupting Major Supermarkets
As a major player in the digital business space, Amazon has recently decided to enter into the Australian grocery market to compete with Woolworths and Coles. This is mainly done through a reduction in price to undercut the big supermarket chains. Some key facts and figures are presented below.

  • Amazon Australia is now undercutting the dominant supermarket chains by as much as 50 per cent on household staples and quickly capturing a foothold in the market
  • Some products are priced lower to consumers than the supermarket’s purchase prioe
  • Supermarket giants are worried that brand owners are favouring Amazon as they can offer lower prices to customers (perhaps offering Amazon better terms)
  • Selling to Amazon at cheaper prices could adversely impact brands (pricing control and favour with major supermarkets)
  • Amazon has less than 1% of the online food and grocery market, which grew 39.7S over last 12 months (Nielsen 2018)
  • now has more than 2500 food and grocery products on its site

Prices on ks ) Colgate Total [ toothpaste, 190 gms
Colgate Optic White, 140 gms
52.99 to S3.99

Ke Rce Bubbles, ‹3.75 O Ultimate,

$4.49** $4.50
Cuddly Fabric Softerier,
lhtre concentrate
Finish dishwasher tablets, 94 pack
“For 705 gms ”” For 430 grro
”’ Red\xed fra n $8.99 • For 80-pack
S4.49 $6.00 ” 58.99 SJ6.99 $35.00 $35.00•
To adequately compete with Amazon ar¥1 ermJre that they do rat take up tax rrzJch rrarket share, you have b‹xri hired as an external consultant by Wentworths to provide a strategy on how they can prepare and compete with Amazon approplately. Provided below are sevaal internal and external issues that Walworths are gmppling with that need to be sorted. These are outlined belt

  • WorrIa1 Shaeholders are worried about Arrezrri’s rise as they see this as a threat to Woolwc+th’s shae price
  • Ram online sense Woolwc+1fis customers have been axTylaining that when they try and orde their grew ‘ries online (website arxl rrobile) they cant sufficiently add questions and engage with sBff rr¥•mbers for advice and/or enquiries
  • Sodd media ¥jeptltude Woolwc+ths are worried that their social media interactions are insufficient arxl unengaging arxl that consumers do rx›t have any desire to interact with the brand
  • Corp‹¥ate staff fnaJf{i¢Iemly1¥afrtert The corrgany has identified that nQ all their staff rr nbers are size of how the online grocery ordering system This also extends to payrr¥•rit to suppliers
  • Wcolwalhs are iziable to corrgete w1h Amazon on prices of particular products
  • Wegjelte r¥Xso u0ef- Arrezon’s onIir¥• ordering system is much more user-friendly than Woolworths
  • Dbtrlbtxbrr Woolworths has more effec0ve distribution channels than Arrezrri already set-up in Australia but feel that Arrezon is starting to make strong rroves in this spme. Not drily that. but casts for the different buying channels few consurrefs is highe than simply operating online
  • Stijggler I Sc+ne suppliers are willing to offer Arrezrri txfite terms than Wcoiv/orths
  • Board ppulal n: Walworths has noticed that their reputation is decreasin‹t ar¥1 AmazolYs is increasing here in Australia
  • Per c+¥1ajmef kiyok’jr.CxxmJrr¥•r loyally is diP¥xJlt to establish in the FMCG market and while Woolwc+ths has a large market sharp consurr s doñt seem to be particularly loyal

As highlighted above. Wbohvcirths have a number of we+rying issues they need to deal with and that they see as a threat from Arrezon. To assist Wahvcirthg you need to select2 issues and develop inrovative solutions to dealing w1h time issues
Fiat doea your solution look like?

  • Your solution needs to be inromtive and draw on material and theory learned throughout the semester(e.g.w, e disaJss the new consurr¥•r decisia+-making pros.. how can Walworths use this?)
  • Your solution needs to be a step-by-step implern taticn guide with conbd rrxasures highlighted along the ps (control refers to different evaluative tools)
  • You need to cm+sider casts and tin ‘line (include a realistic budget based on evidence and a tirr¥•line of key activlies)
  • Who in Wxiiv/orths shxild be implem ting yxir solution (their role their nans’)? Consider if a rdeneeds to be created, what would this leak like?
  • Your solution needs to be based cci evidence from lxth business and academic s‹xJrces. In saying this. if yxi have a Ietely inrovative solution to a problem that has rot b‹xri thrXJght of before then this will be considered

fat will you be marked on?

  • Two chosen issues and two solutions (one solution to one issue). Each solution is clearly and specifwlly stated. The solution is logically link I to the problem md is inrovative.
  • lrrglerr¥•ritation and control. A tfxxcugh and specific implantation plan is clearly id tified for may solution.
  • Digital business 1fieay There is a clear integration of relevant diglal business theory in solutions te. systems thinking).
  • Sxirces of evid High-quality rzedible, relevant sources to develop idms that are appropriate frr1fie development of solutions
  • Writing style Language is clear md expressive showing a strong writing style and without grammar punctuation. usage. and spelling erms.

Other insbuctions
The word count for the report is 1500 words (+10%). You have a sh‹xt word oxirit whirfi means you do not need to include an executive summary introduction or Instead, yxir fa Us needs to be rri solutions and how you can best present this to Woolworths’executives.

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