Coles Myer Is Australia's Largest Retailer
Coles Myer
Coles Myer is Australia’s largest retailer with more than 1,800 stores throughout Australia and New Zealand. The company’s aim is to create benefits for every stakeholder by being the best retailer in every market in which the company operates. Coles Myer is the Australia’s largest non-government employer with over 160,000 staff and spends approximately $19 billion a year buying merchandise and services from over 61,000 suppliers.
There are various factors undermining the decline of Coles Myer performance and shareholder value, both externally and internally. In this report we will analyse Coles Myer, in terms of major financial, marketing and organisational drivers presently influencing the company’s shareholder value by using the value driver framework. Coles Myer is a large organisation; we will only be concentrating on the important aspects that we have ascertained. The concluding section of the report will address the major challenges in altering the drivers to increase Coles Myer shareholder value in the future.
2. Financial Value Drivers
A marketing strategy only makes sense if it is likely to increase the value of a business and Doyle (2000) suggested that to determine whether strategy make sense, long-term cash flow have to be estimated in a true valuation, rather than boosting the cash flow in short-term based by scarifying the long-term objectives.
While shareholder values and financial value drivers are the objectives of business, marketing strategy lies at the heart of value creation. Marketing value drivers will determine the process and marketing strategy to achieve and maximise the shareholder and financial values.
2.1 Level of operating cash flow
2.1.1 Sales Growth
In 2001, J. Fletcher aimed to reach the target of $800 million annual net profit by July 2006. Since then, Coles Myer has struggled to meet the analyst’s forecast periodical profit and sales growth. Solomon Lew commented that the company will need a compound
Coles Myer is Australia’s largest retailer with more than 1,800 stores throughout Australia and New Zealand. The company’s aim is to create benefits for every stakeholder by being the best retailer in every market in which the company operates. Coles Myer is the Australia’s largest non-government employer with over 160,000 staff and spends approximately $19 billion a year buying merchandise and services from over 61,000 suppliers.
There are various factors undermining the decline of Coles Myer performance and shareholder value, both externally and internally. In this report we will analyse Coles Myer, in terms of major financial, marketing and organisational drivers presently influencing the company’s shareholder value by using the value driver framework. Coles Myer is a large organisation; we will only be concentrating on the important aspects that we have ascertained. The concluding section of the report will address the major challenges in altering the drivers to increase Coles Myer shareholder value in the future.
2. Financial Value Drivers
A marketing strategy only makes sense if it is likely to increase the value of a business and Doyle (2000) suggested that to determine whether strategy make sense, long-term cash flow have to be estimated in a true valuation, rather than boosting the cash flow in short-term based by scarifying the long-term objectives.
While shareholder values and financial value drivers are the objectives of business, marketing strategy lies at the heart of value creation. Marketing value drivers will determine the process and marketing strategy to achieve and maximise the shareholder and financial values.
2.1 Level of operating cash flow
2.1.1 Sales Growth
In 2001, J. Fletcher aimed to reach the target of $800 million annual net profit by July 2006. Since then, Coles Myer has struggled to meet the analyst’s forecast periodical profit and sales growth. Solomon Lew commented that the company will need a compound