5 Reasons Why Masters is Closing in Australia

5 Reasons Why Masters is Closing in Australia

Woolworths and its US joint accomplice, Lowe’s, have put about $3 billion in their tools and hardware franchise since 2009 and have not realised profits so far.
Actually, amassed misfortunes have gone up to around $500 million. They spent $43 billion on home improvement market. Of the $43 billion, Bunnings has caught around 18%, contrasted with Masters’ 2%. Here is exactly what went wrong.

1. Poor strategies

The company’s entry into big-box hardware has been nicknamed Project Oxygen, as it aimed to outsmart its main rivals Wesfarmers’ crown jewel, by distracting it from swinging around the new Coles supermarket chain.

What Woolworths did not understand is that Wesfarmers allows each and every business to run as a silo. Woolworths failed to realise that Wesfarmers business came together annually to negotiate massive media spend. Their strategy to compete head on with their rivals distracted them from their own business. Woolworth’s strategy to expand into home improvement pulled down the profitability of the group.

2. Wrong locations

a-staff-in-the-hardware-depatmentBunnings had 236 warehouses, 33 trade centres, 65 smaller format stores as of June last year. Masters had 62 stores at the same time and had slowed down its aspirations to roll out 150 stores in the next five years.

The quick rate of rollout gave Masters a presence in Australia. The problem came in its choice of sites. It failed to choose quality sites, value sites or delayed their progress. Masters has picked inferior locations, including those Bunnings, rejected, in its pursuit of rapid roll out. Rumour has it that Masters paid big prices to secure their locations.

3. Imperfect workplace culture

Masters has failed to develop a strong organisational culture to empower its employees.
Its employees lack the enthusiasm, smiles, and willingness and therefore pushed customers away. Flawed workplace culture results to the huge losses. For instance, Masters has a policy of insisting staff park their cars tail-in to the kerb, which is a clear indication of a rigid workplace culture.

4. Selling the wrong products

Masters has acknowledged it had the wrong selection of goods at the wrong season of the year.
Initially, it didn’t grasp the reasonableness of hardware and this lead to its business ties with Lowes, which is a clear indication that they run out of stock in Australia. It ignored high-margin basic equipment and entered the whitegoods sector, which is very competitive.

5. Bad shopping experience

Masters has recognised that its store layout has been unsatisfactory with customers. Its inability to accommodate the needs of its customers has impacted its closure.


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