Essay: Ethical, Economic, And Legal Issues In Australian Supermarket Companies - Wesfarmers, Coles, And Woolworths.

Overview of ethical, economic and legal issues in the supermarket companies

Question:

Discuss about the Marketing Issues for Coles and Woolworths Company.

The report presents a brief overview of the ethical, economic and legal issues of the Wesfarmers, Coles and Woolworths Company. It examines the notion that “marketing makes a positive contribution to the common goods and services in the market. It describes that marketers are serious about environmental stewardship.” with respect to top three countries of Australia named under supermarket i.e. Wesfarmers, Coles and Woolworth. The issues in the companies are briefly explained in the report. There are situations taken in the place of examples to make the report more understanding. It opens by explaining the definition of each issue and further carries forward the same idea with respect to the companies. It is critically examined with the policies that helped the company in growth and success. The report is a small overview of how a company of Australia functions even after facing various many issues in the market. The three companies taken in the report are the best supermarket companies that serve the consumers by providing good quality products to satisfy the human needs on a maximum level.

Wesfarmers Company is founded on 1914 in Australia. It works with the cooperation of Australian farmers. It is one of the most leading companies in Australia. In this way, it is expanding and flourishing its business day by day.  The Coles is a supermarket company which is dealing in various consumers products across the world. In such way, it is providing satisfaction to the customers. The company is a chain of the supermarket that is owned by Wesfarmers (Armstrong, Kotler, Harker and Brennan, 2015). Woolworth Company is a company delivering groceries and food items to the consumers. This Australian supermarket is a most trusted brand in the sector of retailing. It has largely opened its sector all over the country across the world. Further, it explains the business activities and operations of the companies in the market (Kotler, Keller, Brady, M., Goodman & Hansen, 2016).

An economic issue is a problem that takes place in the company due to lack of resources. In the world, dreams of human beings are unlimited compared to the limited availability of resources. A number of resources present are insufficient and inappropriate. It cannot satisfy the human needs and requirements. Therefore the problems arising due to this are Economic Issues. The major problem faced by the society is of allocating these minimal resources within the economy equally. The problem is created by the human society itself (Moriarty, Mitchell, Wells, Crawford, Brennan & Spence-Stone, 2014). Initially, the use of resources becomes so large that a number of resources present in the environment become limited to be used for future. Therefore the human wants turns out to be unsatisfactory. The problem of economy arises due to the problem of choice (Akbar & Ahsan, 2014). In this way, these issues are not good for the companies.

Introduction to Wesfarmers, Coles and Woolworth

Wesfarmers is one of the biggest supermarket companies in Australia which largely serves the grocery items in all over the world. It serves to the country by providing good quality products and services to its customers across the world. It is making an effective position and image in the market. In this way, the company is trying to overcome on its competitors in the market. Thus various economic issues are faced by the company in the market across the world. The problem of the economy started worrying the investors. The business faced low growth and even no growth at all. The market value of the company dropped initially which put investors in dilemma to invest in the company or not. The CEO of the company believes to push the business towards a sale in order to gain good results and outputs in the market. Wesfarmers owns various different supermarkets of the country which has uplifted the decreasing brand over the years. The company is able to make the company’s position stable which resulted in a jump in company’s share market (Menon, Bharadwaj, Adidam & Edison, 2015).

Woolworth is also a supermarket company of Australia which has grown itself in the initial years only by serving good quality of products and services across the world. They were able to satisfy the demands of the consumers which made their growth in the market easy. The economic issue faced by Woolsworth is same as faced by other companies in Australia. Woolworth is facing the similar threat in the sector of the economy. It initially earned good by the sale but later the percent of sale declined due to the difference in the planning of strategies. The decline was as per the sale of food. Woolworth faced a lot of trouble while planning for business expansion and growth. It certainly opened the branches of its own and started expanding the growth and success of the market. The company initially required a big investment but then made it. Woolworth had to take care of the amount of the investment made in completing one project. The issues resulted in the cost of operation due to the raw materials supplied in the market (Slater and Tonkiss, 2013).

Coles Company is a retail store in Australia. It has a number of retail chains and stores. The parent originator of the company is Wesfarrners. Only 30% of the market is controlled by the company for selling food and liquors. Company’s inevitability of firing the workers resulted in dropping of the price. This led to the shortages in the stores which resulted in the feeling of disappointment in a large number of customers. Coles had to claim over the trust of the consumers by working harder. The economic issues in the company resulted in a claim over the grocery market. The sales after that also were weak and profits became even worse. The Company did not make that much amount of profit that is expected from the sale of product’s supply. These profit gaps were not at all in the control of suppliers (Frewer, Kleter, Brennan, Coles, Fischer, Houdebine & Salter, 2013).

Economic issues faced by Wesfarmers, Coles and Woolworth

Legal issues are those problems that are found in the business that requires the interference of court to make a decision. The problem is solved by the evidence generated by the legal authorities. Legal issues in a company are dependent on the laws made by the people hired to handle the legal matters. It is very obvious that every company faces the legal problems since it is not easy to run large institution without any problem. An important thing in a company is to manage and anticipate legal issues on a timely basis to avoid any discrepancy (Schlosberg and Coles, 2016).

Wesfarmers plays a very important role in contributing on a range of issues to public policy and in the national debate. This has made the company the largest employer with operations all over the country. The company is also responsible for interacting and co-operating with the government agencies in order to operate effectively on the legal matters (Dos Santos, 2012). The legal issues in the company are normally seen when the company operates its functions irrespective of its policy (Richards, Lawrence, Loong, & Burch, 2012). This creates competition among other firms and restricts the growth towards economy artificially. Since the development of new technologies company is able to meet most of the issues in a few years. In the company, there is undoubtedly an important role of the government in the operation of the business (Keith, 2012). A member of legal representatives is required to form a healthy economy in the environment. The support of these members is quite helpful for the company in participating effectively and efficiently in the market avoiding any legal issues. The problems in the company also arise with the interference of bureaucrats in the competitive market. It does not contribute anything to the national wealth but they intrude and diminish themselves (Valenzuela & Fisher, 2012). The company should focus on the legal issues to maintain sustainability in the market.

The legal problems in Coles Company rose due to the workers. They took the legal action for stopping the agreement relating to employment between the larger supermarket and the union of retail workers (Kurt & Hulland, 2013). During the issue, workers claimed about losing a great amount of profit in the coming years. The agreement was to increase the hourly rates of the workers working in the supermarket. During the solving of this problem, Coles had to go through many issues. It was asked to shut the markets down till the case is not solved which made a great loss for the market. According to law, the agreement has to be better off rather than getting any award. Australian competition and consumer commission announced the legal actions that were declared but were not approved being against the conduct of the supermarket. The policy launched by federal government relating to competition of various companies has increased the market dominance (Richards, Lawrence, Loong, & Burch, 2012).

Legal issues in Wesfarmers, Coles and Woolworth

The legal problems in Woolworth have been a transformation in the company. Woolworth’s retailer is able to drive away the other companies in the battle such as Lower Company. The case was raised by the Lowe’s Company in the court. They wanted to appoint an independent liquidator (Chapple & Humphrey, 2014). But Woolworth was not ready for that which created problems in the company. This required the interference of the justice to resolve the differences. But since the economic stability of Woolworth is good the solution was in favor of the company. According to the legal intervention, no company was insolvent and nobody came to present the company in the court which gave rise to many problems in legal terms (Berk, DeMarzo, Harford, Ford, Mollica, and Finch, 2013).

These are the issues that guide the business to behave morally. The issue gives a way of to choose right and wrong at the time of making choices. It is mainly chosen to get answers relating to the moral concepts. The problems relate to any good or evil consequences. The issues in the business are generally studied as the problems arising in the business situations. The issues that generally need the concern of any individual or representative to decide right and wrong i.e. ethical and unethical. Ethical behavior of the company depends on the moral views and principle values. There are various factors that cause issues relating to ethics (Cil, 2012).

There are various ethical issues are faced by the Wesfarmers. The challenge that company has to face is making the supply chain in managing the ethical sources of risk which includes child labor, labor working under pressure etc. company works with the suppliers to stick to the conducts of ethical business through the range of actions. Wesfarmers have a large group of Ethical Source Policy. This allows setting the standards of the division. Every decision has the ethical policy of its own that matches with the policy of the company (Chandon, 2013).

The ACCC has observed the commercial practices that were declared without any proof and were into engagement in the company. The Company showed concern over the suppliers of the supermarket. The decision was left to the court to decide whether the facts given by ACCC were relevant or rough. The ethical issues of the company resulted in fulfilling the outcomes of demanding the pay money from the suppliers. The company failed to tell about this to the suppliers which resulted in a demand for more money. But all this was illegally done. The operation of the cost of the company fell due to less supplying of products and imposing extra charges on what was supplied (Chapple & Humphrey, 2014).

Ethical issues faced by Wesfarmers, Coles, and Woolworth

According to Woolworth, every supplier must go through an “ethical audit”. It is done in order to know about the structure of payment, the place from where the raw materials are being originated and whether the company does child labor. Woolworth wants its suppliers to work on the “ethical audits”. This lets them know about the policies on corruption and working conditions of the company. The Ethical Sourcing Policy of Woolworth states that there should be no bribery and corruption by the suppliers. The suppliers must not go against the policies of the company and must not abolish the ethics of the agreement. Woolworth began to work on its ethical audits to meet the demands of the market and to follow the policies and agreement of the business honestly. The audits didn’t fail and gave great results and also the ethical issues were solved in a considerable manner (Liu, 2012).

Conclusion

On the above discussion, it is concluded that there are various ethical, legal and economic issues are faced by Woolworth Australia. It gives a clear indication of the problems or of the issues that are faced by the companies in the sector of marketing. The technique or the strategies made by the company somewhere lacks in fulfilling the demands of the markets as well as of the consumers. The different issues faced by the company attacks in the growth of the business and become an obstacle in its target achievement. The report presents a clear overview of how a company should function in order to maintain its stability of work in the market. Therefore, the company should focus on these ethical, economic and legal issues in order to gain the success and growth across the world.

References

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