Labour costs increasing and the impact of automation equipment:
Owing to the advancement of technology, there are many industries who use automated systems now. The benefits of using the automation equipment includes the following:
Firstly, it can substitute for the labour force. According to the data, it is known that the labour costs keeps on increasing every year in Australia; if the industry can decline the cost of labour, this would be a huge amount of money. The production capacity of automated system is higher than manual labour. Moreover, it is not only efficiency on production, also can decrease the rate of error and control the quality. One of the problems that Sonoma needs to look out which is the main supermarkets in Australia- Coles, Woolworths and Audi are attending bread market. Even the bread quality in supermarkets not as good as Sonoma, but they can ensure they produce safety and meet the needs of most of customers by using automation equipment. On the other hand, the labour costs of Sonoma are very high, although Sonoma can expands many new stores, but Sonoma still needs to hire more backers, so that there is no decrease of the costs. These situations result in the concentration of the supermarkets towards the bread markets, and bring strong attack for Sonoma.
Owing to Woolworths and Coles have strong and stable economic capacity, they can promote huge discounts on their products (Godfrey T, 2014). At first, Woolworth was cutting the cost of Home brand bread, and then Coles followed the similar pricing war, they attract more consumer by using this successful marketing strategy, most of customers not only buy bread in supermarkets, they would buy more products from supermarkets (Godfrey T, 2014). On the other hand, Woolworths and Coles provide perfect online shopping. For some consumer who doesn’t have enough time to go supermarket, they still can buy stuffs through supermarkets’ online store, and bread is one of the products that can shop online, then they will send to customers’ house by their own professional staff.