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The Ethics of Profit in the Australian Retail Industry Solved

Referencing Styles : Harvard | Pages : 21
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Introduction

The case analysis report has been developed in the Australian retail industry. Precisely, through the analysis of the case study, top-line business organisations and their current business practices have been illustrated in the study. In the context of the business scenario, most of the retail industry players operating in the Australian market are targeting sales growth. Meanwhile, some of leading brands have failed to make the adjustment in their business proceedings. The rest of the retail market players have opted for cost reduction tactics to increase profitability (Amato and Amato, 2011). Primarily, the consumer price index of Australia has impacted the sales growth of the retail businesses. Due to the low rate of inflation, the consumers have expected a low set of product pricing. A diagram has been presented below for better understanding:

On the other hand, Australian retail firms have faced significant challenges due to the presence of international marketers such as Aldi and TESCO PLC. The case study also identifies the authority of the largest retailing company such as Woolworths Group, Wesfarmers Limited, and Aldi over the smaller retailers. In the retail sector of the Australian market, competition in the market is significantly tough, to say the least (Kasemsap, 2016). The price-war of the major retailers can be identified as one of the major benefits for the target audience. Precisely, Woolworths Group, Coles Supermarkets, and Aldi Australia can be termed as the leading business giants in the Australian retail industry.  Also, H&M, Uniqlo, Zara, and other brands have come onto the scene to make the retail sector more competitive. A diagram has been given below to indicate the market share of the retailers in the Australian market:

Previously, the traditional method of retailing made the organisations incur a huge amount of cost. On the other hand, the profitability of the retailing firms remained quite low due to the price war in the market. A figure has been given below to present the retailer’s profit components:

In the modern business environment, different strategies have been introduced by the retailers such as internet retailing and outsourcing of production that has successfully altered the cost structure of the retail companies. Also, many of the apparel retailing brands have preferred outsourcing to increase the profit margins. However, the study has described that food retailing businesses are the major market shareholders in the Australian retail sector. In the retail industry, auditing fraud is one of the substantial issues in the management. Hence, the workforce working in the retail sector has feared to file practices against the unethical business practices because of losing their employment. In order to describe the ethical foundation of the retail industry, companies sometimes compromise with the quality of products in the race of lower cost price and higher profitability (Colli and Colpan, 2015). Moreover, the competitive strategies of the retailers operating in the same industry should be validated under the purchasing point of the buyers.

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