- The initial research proposal will consist of the following SIX (6) items:
1. Identify a business research topic
2. Define the research questions for the identified problem or opportunity
3. Select the appropriate research methodologies and techniques to use for the research
4. Describe the research process
5. Describe data collection and analysis methods
6. Describe expected research outcomes
Material on Research Methods will be presented in class.
An investigation of the winner-takes-all market: Woolworths and Coles
Winner-takes-all alludes to the phenomenon where the best performers can capture an enormous share of the profits and rewards due to the lack of significant competition. Scholars suggest that this business practice is inefficient and can easily escalate into a monopoly. Factors such as globalization, improved transport, communication, new technologies, better human resources management, and better business models have enabled businesses to achieve competitive advantage. Businesses that lack abilities and resources to use these provisions are easy subdued by a large organization. Woolworths and Coles are the leading retails in Australia and their business practices have led to a phenomenon of winner-takes-all. In the bid to overcome shortcomings due to changing customer behaviour, the companies have adversely affected local communities. The intent of this investigation is to analyse the effects of the winner-takes-all market on the local retailers following the dominance of Woolworths and Coles in the retail sector in Australia. The research will be conducted through a qualitative approach that includes interviews and questionnaires. The study might be constrained by lack of enough participants from the supermarkets, local communities, or consumers.
Key words: winner-takes-all, Woolworths, Coles, consumers, local communities, qualitative
An investigation of the winner-takes-all market: Woolworths and Coles
Winner-takes-all is a phrase used at the individual, corporate, state or regional levels as an analogy for a situation where the best performers can capture an enormous share of the profits or rewards due to the lack of significant competition or the existing competitors have little to offer. Frank and Cook (2012) state that small differences in people’s talents or the organization’s ability sometimes translate into large differences in the economic reward. The winner-takes-all markets are characterized by relative performance being more important for higher returns than the absolute performance, and payoff of the best performers is high compared to those of the second best (Fischbacher & Thöni, 2002). Companies in a winner-takes-all market reduces the probability of others to win. Fischbacher and Thöni (2002) states that winner-takes-all markets are inefficient because they lead to a few entities dominating the market and can easily result in a monopoly. The intent of this investigation is to analyse the effects of the winner-takes-all market on the local retailers following the dominance of Woolworths and Coles in the retail sector in Australia.
In the last few decades, globalisation has revolutionised the dynamics of conducting business. The market landscape has been expanded significantly across borders. Improved transport, communication, new technologies, better human resources management, and better business models have enabled businesses to achieve competitive advantage. Enterprises, which maximize these aspects have sustainable growth while accumulating customer loyalty and building a reputation (Lechner & Boli, 2015). Advancement of technology has facilitated the expansion of business with remote managerial activities. Although there exist more opportunities in the new age economy, large corporations are the ones that reap most of the benefits due to their financial capacity and influence in the marketplace. Smaller companies that lack enough resources to grow or alternative ways of creating competitive advantage may collapse, or they do not offer significant competition (Frank & Cook, 2012).
Woolworths is one of the leading supermarket retail sectors in Australia. Coles is the only company that can offer significant competition. Resultantly, Woolworths and Coles have grown to be the largest retailers in Australia. According to Keith (2012), an expository research on media commentary shows that these two companies have an anti-competitive and duopolistic approach to business. Consequently, their dominance has transformed the Australia retail sector to a winner-takes-all market by decreasing the competitive pressure. The business environment has changed since the decisions made by the two companies has the power to shape practices in the supply chain, including food production, other retailers, communities, and the consumers in the country. In recent years, people have raised concerns about the environmental effects of food transportation. Additionally, people have become conscious of what they eat, as well as the conditions of where they get their food. In response to this changing behaviour, the supermarket retailers are always seeking to improve on ways to address the shortcomings that might relate to the change in consumer behaviour (Hernant, 2009). Companies have engaged in rebranding and repositioning their businesses and introduce locally-grown foods in their stores. The initiatives have had a profound effect on the local-based food networks and producers as they have been compelled to consolidate with the supermarkets while others face challenges with the dictated prices (Keith, 2012).
- What factors have made lead to supermarket duopoly in Australia?
- How does winner-takes-all affect the local retailers?
- What are the perceptions, local retailers have on the supermarkets’ business practices?
- What is the perception of the consumers on the winner-takes-all market in the Australia’s retail sector?
The research is based on a theoretical framework that alludes that globalization of the economy and improved technologies have enabled large corporations such as Woolworths and Coles to achieve a competitive advantage that has made them dominant in the retail market. Small companies and local producers lack the financial capacity and resources to venture in major international trade and acquire technological solutions that can enable them to offer significant competition. The changing consumer behaviours have led the big companies to rebrand and relocate in areas previously under local retailers and producers. Resultantly, there has been a loss of small business, and the remaining players face challenges due to the influence the two supermarkets have on prices.
The research will be conducted using a qualitative approach. Using this method allows researchers to employ various tools that increase the credibility of the study. As an investigator in the business field, there is a need to identify and understand the reasons, opinions, and issues that influence organization decisions and customer behaviour. A qualitative research facilitates such needs by allowing the researcher to indulge in the business environment and have the first-hand experience as well as engage with various parties in the target population. Harrell and Bradley (2009) state that primary data collection is critical for research projects. Using the proper techniques ensures qualitative data is scientific and consistent. The following methods will be essential in achieving high-quality research that provides credible findings.
Interviews entail asking oral questions and noting the responses offered by the study participant. Interviews are appropriate where the investigator wants to probe for more information on an issue. For this research, interviews will be relevant in gathering information from the supermarkets. It involves asking the participants from the management questions that concern gaining competitive advantage, pricing of products, rebranding and relocating, expanding, and their perspective on the winner-takes-all market.
Questionnaires are written questions that enable researchers to conduct surveys in a large population. Questionnaires can be printed out or sent via online platforms. For this study, two types of surveys will be developed.
It will be used to gather information from local producers and retailers concerning the winner-takes-all. The structured questionnaire has the same type of questions presented to the respondent. Using a structured questionnaire will reduce the variations in responses because there are different types of businesses involved. Suggestively, all participants will be limited to provide information that is relevant to the study. Additionally, questionnaires might be time-consuming for people at work; it is prudent to limit the time they spend filling them.
It will be used to investigate the perceptions consumers have regarding the winner-takes-all market. A semi-structured questionnaire gives the respondent freedom to add more information that they consider relevant while at the same time, they all respond to the same questions. The approach will facilitate comparing Woolworths and Coles to other players in the retail market from a consumer’s perspective. From this information, the research will confirm whether the cause of winner-takes-all is driven by the consumers, the failure of local businesses, or the availability of resources for the large corporations.
Carrying out a qualitative research can be limited by the following aspects:
Lack of cooperation from the respondents. In this context, some might be unavailable while others might be unwilling to participate.
Complicated questionnaires. The questions presented might not be appropriate, or might be challenging for the respondent to answer
Inadequate data. The participant might not be enough to provide suitable information to draw credible conclusions.
Time. Some respondents might require more time with the questionnaires while others might lack a chance to participate in interviews limiting the amount of data collected.
The population sample will include representatives from the management at least three Woolworth stores and three Coles stores. The other group will be retail businesses adjacent to the supermarkets. The consumers will be picked randomly, and they will be sent via mail to facilitate covering a large population. Data will be gathered from some respondents that will facilitate drawing credible and reliable findings.
Data collection and analysis
Data collection will be carried out using audio recording devices for the interviews, which will be transcribed and incorporated into the research. Questionnaires used in the survey will be filled by hand or electronically. After completing the questionnaires, the respondent will send them back, or they will be picked at their convenience.
The analysis will involve a synthesis of the information offered to develop a final report. The data collected from all sources will be triangulated to identify the implications of each research question. Additionally, the findings will be correlated with available literature to come up with a comprehensive report that adds knowledge to benefit people in business and the customers.
Supermarkets have become an integral part of the Australian shopping experience. Their low prices and better packaging attract shoppers who previously used to buy from local distributors and producers. Nevertheless, consumers show great enthusiasm in locally produced goods, and if it were not for the low prices offered by supermarkets, they would probably buy from the locals. The decreased customer base is the reason local players consolidate themselves with larger businesses. People who have understood the underlying phenomenon have an adverse perception on the supermarket duopoly. Not only the price has an effect on the consumers, but they are becoming discontent with the marketing strategies and policies used by the two supermarkets. Conclusively, the undesirable perception on the major companies is due to the negative effects they impact on local communities.
Fischbacher, U., & Thöni, C. (2002). Excess Entry in an Experimental Winner-Take-All Market. Zürich, Switzerland: Institute for Empirical Research in Economics.
Frank, R. H., & Cook, P. J. (2012). Winner-Take-All Markets. Journal of Microeconomics, 1(1).
Harrell, M., & Bradley, M. (2009). Data Collection Methods: Semi-Structured Interviews and Focus Groups. RAND Corporation.
Hernant, M. (2009). Profitability Performance of Supermarkets: The effects of scale of operation, local market conditions, and conduct on the economic performance of supermarkets. Stockholm School of Economics.
Keith, S. (2012). COLES, WOOLWORTHS, AND THE LOCAL. The Australasian-Pacific Journal of Regional Food Studies, 2.
Lechner, F. J., & Boli, J. (2015). The Globalization Reader (5th ed.). John Wiley & Sons.