Premium Essay

Australia Supermarket

In: Business and Management

Submitted By Helena1209
Words 1178
Pages 5
Assessment 2: Mini Case Analysis
Introduction
The Supermarkets and Grocery Stores industry in Australia is under fierce competition, and the industry revenue is expected to grow at an annualized 2.2% in the next few years, to reach $98.1 billion (IBIS 2016). A growing number of discounters have infiltrated the industry, such as ALDI, which has forced two dominated companies, Woolworths and Coles, to lower prices and increase the number of private-label products (IBIS 2016). Malaysia hypermarket retail chain Giant is also eyeing the Australian market. Given the business context in Australia, political, economic and technological are the most relevant macro environmental factors that Giant should consider.
Political factor
The export tariff is an important issue in trading as Australia was Malaysia’s 10th largest export destination, accounting for 3.6 percent of Malaysia’s exports (Department of the Prime Minister and Cabinet 2012). The Malaysia-Australia Free Trade Agreement (MAFTA), was signed in May 2012 and came into force on 1 January 2013, provided a high level of market access liberalization for goods into the Australian market (Department of the Prime Minister and Cabinet 2012). The implement of MAFTA is likely to lower the cost of Malaysian products, enhance the relationship between trading partners and create investment opportunities and jobs in Australia market.
Furthermore, according to the report of the Economist Intelligence Unit, Australia achieved one of the highest rankings in the world regarding political stability and strong government support for foreign investment (HABC 2016). The report of Australia government also demonstrates that Australia and Malaysia share a long-standing and substantial partnership for a long time, evidenced by responses to the disappearance of MH370 and the shooting down of MH17 (Lumpur 2015). The Australia government...

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