Joseph Cirillo

1. Identify the specific challenges that the decision entails

Brownstown Harcourt East
Strengths -High morale; employees - Brand new location (and facilities)
live nearby or on tram - Modern logistics (more
route storage/prominence)
-Trendy and bohemian - Free and ample parking (excellent
-Steady sales growth access)
(8.5%pa) - Significantly higher annual
-Upcoming major centre discretionary household spend
refurbishment
-Pressure on MP to keep
businesses
Weakness -Badly outdated; store -Not trendy anymore
es looks tatty -Inferior transport facilities
-Tattoo parlour/dollar shop (risking team member morale)
have opened up nearby -Uncertain about lease terms
-Bad loading bay access -Woolworths have already
(takes time drivers get signed up
frustrated)
-Limited storage space
-Expensive heating/cooling;
unreliable
-Profit is not quite so good
-Costs are increasing
annually
-Not very energy efficient
Notes: - Upmarket in trend

Challenges with the decision include

- Since the location is no longer trendy, Coles are likely to lose much of
their current clientele, shifting their target demographic to more
upmarket consumers.
- Managing customer morale and workplace culture; although transport
may be organised, a complete change in location will undoubtedly have
an effect on workplace culture and the morale around the workplace.
This also includes the style change of the instore brand.
- Woolworths have already signed up, which suggests that there may be
significant competition in the location.

2. Identify any further reasonable challenges which may arise but have
not yet been considered
- Loss of sales in transition period
- Workplace culture could change dramatically in new environment
- Lorissa Lootworthy may offer a new, more attractive lease because of
pressure to keep businesses in area
- The terms of the lease are not certain, which leaves a possibility of a
high rate (especially for a brand-new centre). By building a new
customer base, the lease may be a risk to profit margin.
- As a new centre, parking could very easily fill disrupting team morale
and customer basis with no public transport available.
 Joseph Cirillo

3. Prioritise those challenges on some reasonable basis

Probabil Impact Overall
ity
Significant competition 8 6 =48
Decrease in staff morale (transport) 6 6 =36
Loss of current customers (through 8 3 =24
change in branding)
Decrease in staff morale 6 4 =24
(branding/cultural change)
Uncertain lease terms 3 8 =24
Overfilled parking infrastructure 2 10 =20
Loss of sales in transition (logistics) 6 3 =18

4. Recommend how each challenge should be managed (if you run out
of time, focus on the highest priorities).
Significant competition
Decrease in staff morale
(transport)
Loss of current customers
(through change in branding)
Decrease in staff morale
(branding/cultural change)
Uncertain lease terms
Overfilled parking
infrastructure
Loss of sales in transition
(logistics)
Overall Management
=48 PODs; electronic centre displays;
launching promotions; retailtainment
=36 Empathetically and effectively
communicate ample parking; offer
staff parking if an issue
=24 Focus on new target demographic; do
not dilute communications by trying to
keep old and clientele
=24 Communicate that core Coles brand
principles (passion, inspiration,
customer service) remains the same,
and that we are still the same team.
=24 Negotiate with council/centre
management to find a win/win. If rate
is too high, start discussing other
ways to manage costs.
=20 Unite with other retailers and
customers to pressure centre
management to invest in additional
parking. Promote public transport.
=18 Ensure infrastructure planning is
managed well in advance, including all
permits, safety and store layout
design; Minimise changeover times.