Discuss about the Food Transgressions for Ethics, Governance and Geographies.
Woolworths Supermarkets is a renowned Australian grocery retailer that is based in the city of Sydney and which holds a prominent position in the supermarket industry of Australia. It was established in the year 1924 by Coles and Woolworths and occupies more than eighty percent of the shares in the Australian stock market. Woolworths specialty lies in the sale of packaged foods, frozen meat and fish and both fresh and processed fruits and vegetables. It also deals in products like stationery items, baby supplies, pet supplies, household products, beauty products, DVD’s, magazines and health related products. It has nineteen convenient stores and nine hundred and seventy six supermarkets all across the country, with every store and supermarket carrying the exact same logo. Woolworth’s products are available for sale online and are delivered to customers via an efficient and cost effective home delivery service. Customers can order Woolworth’s products from the comfort of the home or office and have these delivered to them within a few hours to a few days. This report shall examine Woolworth’s external and internal operations to gain a thorough understanding of its strategy and its success in the Australian market. It will specifically identify sources of sources of cost and differentiation advantage for Woolworths in the industry and position the company and its competitors in the market (Woolworthsgroup.com.au, 2018). The report will then proceed to engage in value chain analysis to identify sources of competitive advantage for Woolworths and a VIRO analysis to determine the sustainability of such competitive advantages. Finally, the report shall make recommendations for the development of strategic resources like corporate government processes for example, that can help it to increase its competitiveness by a considerable extent.
Woolworths Supermarkets is a company that is governed by a Board of Directors, a group executive committee and board committees. As far as its aims and objectives are concerned, Woolworths Supermarkets aims at creating a customer as well as store led team and culture. A major objective of the company is to generate a highly sustainable sales momentum in the area of food (Woolworthsgroup.com.au, 2018). The company wishes to evolve a drinks business which provides great convenience and value to its consumers. Another objective of the company is to empower its portfolio businesses for the purpose of pursuing strategies that are capable of delivering stakeholder value. It also aims to become a lean retailer via systems excellence and a full-fledged end to end procedure.
2.2.1. Threat of Substitutes – As far as the threat of substitutes is concerned, Woolworths does face a good deal of competition. There are many farmers markets, specialist grocery stores and convenience stores in operation in several Australian cities and towns that are likely to attract customers because of their low priced yet fresh produce. Convenience stores in particular have been expanding quite a bit of late and due to the latest fad among the Australian population, the farmers markets are doing quite well too. The farmers markets sell highly organic and nutritious fresh farm food that people are not likely to come across even when they visit a top-notch supermarket.
2.2.2 Rivalry among Competitors – The rivalry among Woolworths Supermarkets competitors is fairly intense. Competition usually arises over factors like price, store location and product choice. Costco and Coles are both major competitors for Woolworths Supermarkets, with the latter bringing about a major change in its senior level management that makes it perceived by its competitors as quite a big threat (Heffernan, 2018).
2.2.3. Bargaining Power of Suppliers – The bargaining power of suppliers was for Woolworths Supermarkets quite low at one point of time, when the company itself was a major buyer and bought way more from its suppliers than its competitors ever could. Now however, due to the entry of rivals like Aldi and Costco into the Australian supermarket, the bargaining power of suppliers has become rather high (“Meet the suppliers to the major supermarkets – ABC Rural – Australian Broadcasting Corporation)”, 2018).
2.2.4. Bargaining Power of Buyers – The arrival of new competitors into the Australian supermarket industry and the emergence of price comparison websites have certainly contributed to the bargaining power of buyers becoming quite high in recent years (Loertscher & Marx, 2017). Woolworths Supermarkets has to keep its product prices highly competitive in order to draw the type of clientele necessary to ensure a profit for its ongoing business.
2.2.5. Threat of New Entrants – The threat of new entrants is one that is usually very high in the corporate world (Fresard & Valta, 2016). Already the arrival of competitors like Costco and Aldi is making Woolworths Supermarkets rethink and innovate with its marketing strategies like never before, and things may get even more competitive down with line with the Australian Federal government insisting on the lowering of trade barriers to facilitate the entry of new competitors.
3.1.1 Strengths – Woolworths Supermarkets holds a relatively strong financial position in the Australian supermarket industry (Knox, 2015). It engages in the manufacture of a wide range of products and is therefore able to easily meet the varied requirements and preferences of customers. It has a good brand image as well as reputation in the market and occupies a significant portion of market shares, making it a leading stakeholder in the Australian supermarket industry.
3.1.2. Weaknesses – Operating costs tend to be very high leading to a rise in debt for the company (Blundell, 2013). The overall running costs are quite high and a reduced petrol margin puts Woolworths Supermarkets in a weak position in the market.
3.1.3. Opportunities – There is plenty of scope for Woolworths Supermarkets to increase its client base, given the huge preference among people in Australia now for healthy, nutritious and fresh food, the sale of which the company specializes in (Lewis & Huber 2015). The company also has the opportunity to grow and develop in sectors like the health food sector, increase its shares in the market and use information technology to avail new sales opportunities and bring down expenses.
3.1.4. Threats – The increasing rise in unemployment, the continued threat of new competitors and the gradual increase in the power of suppliers all constitute major threats to the growth and expansion of Woolworths Supermarkets (Merrett & Smith, 2013). Certain competitors have several technological advantages over the company, since they use sophisticated new software, the use of which the company is not familiar with until now.
There are three primary value creating functions that may be noticed in the operations of Woolworths Supermarkets.
3.2.1. Inbound Logistics – Since Woolworths Supermarkets is in essence a retail business, it does not engage in the manufacture of the different products that it sells in the market. What Woolworths Supermarkets is instead in control of is control over the entire distribution network for its various products (Lawley & Birch, 2014). In this respect there are two important activities that are seen to contribute quite a bit to the company’s business, namely, logistics and procurement. The products that are sold by Woolworths Supermarkets are seen to be transported from the manufacturing centre directly to a regional or national distribution centre from where these products make their way to the stores, after being thoroughly assessed for quality. Such an efficient system of functioning as made it possible for Woolworths Supermarkets to control heavy expenditures. Since Woolworths Supermarkets has sole ownership of all its distributions and locomotives or trucks, it is in a suitable position to combat hurdles like workers strikes. It is also able to ensure that shipment is delivered at distribution centers and from there to the stores or outlets in a punctual manner.
3.2.2. Operations – Two of the main functions that make sure that customers feel both convenience and valued when they buy from Woolworths Supermarkets are inventory management and quality assessment (Arli et.al, 2013). Woolworths Supermarkets officials make every effort to detect as well as remove all defective products before putting these on display for customer purchase. Minimum presentation level technology is made use of in order to ensure that products meet the right standards or quality before being sold to customers. If certain products are seen to fall behind in terms of minimum presentational level, then the stock is removed and an order for a fresh stock is dispatched to the company’s distribution centre. Additionally, advanced forecasting programs are made use of by Woolworths Supermarkets to detect and understand any prospective change in demand owing to external factors like economic trends or changes in the season.
3.2.3. Sales and Marketing – The primary activities that are carried out in order to increase sales and to enable the company Woolworths Supermarkets to compete in as effective a manner as possible are organizational dynamism and in store promotions (Phillipov, 2016). Weekly sales are held by Woolworths Supermarkets in order to enhance the sale of specific products for a limited period of time. The prices of these products are reduced by a considerable degree in this limited time-period. Customers are made to know about these short-term weekly sales via the timely and efficient distribution of sales catalogues. Where inventory turnover is concerned, Woolworths Supermarkets has also introduced a variety of meals that are easy to prepare, thus catering to the lifestyles and preferences of present day consumers.
The sources of competitive advantage that can seem evident after carrying out the above value chain analysis for Woolworths Supermarket are as follows:
3.3.1. Excellent Top Level Management – In spite of high rates of inflation and economic recession, Woolworths Supermarkets has been able to grow and expand at a rate that is way higher than what was projected for this company (Kor & Mesko, 2013). This has happened largely due to the fact that Woolworths Supermarkets has capable and efficient people working at the senior levels of management. The CEO’s of the company till date have been excellent managers and have seldom given employees and customers any reason to complain about the way the company does its work and the quality of the products that it releases into the market. However, while having capable and efficient top-level management is a valuable thing indeed, it is not something that is rare. As a result, this effective and efficient top management cannot be regarded as a very distinct competitive advantage. Instead, it may be considered as a parity point that is used along with a number of other important factors like smooth and efficient supply chain management that makes it possible of the company to be well ahead of its competitors in the industry.
3.3.2. Brand Image and Reputation – Customer experiences have been largely positive as far as Woolworths Supermarkets products are concerned, since the company resorts to strict quality assessment measures to make sure that what it releases into the market is never substandard (Lewis & Phillipov, 2016). The good image and reputation that this brand enjoys as a consequence of such satisfied customer experiences is something that can definitely be regarded as valuable but it is not rare, it is not hard to imitate and many of the company’s competitors are also claiming to sell fresh and nutritious produce that are guaranteed to ensure customer satisfaction. In fact, all Woolworth’s customers now expect its products to always be fresh, to have high health value and to be satisfactory in every other way. The positive brand image cannot therefore be regarded as distinct competitive advantage but instead as an essential point of parity, which the company needs in order to be able to compete well enough with its rivals.
3.3.3. Effective and Efficient Supply Chain Management – The efficient distribution network that Woolworths Supermarkets has maybe regarded as an excellent capability as well as resource in terms of both its outbound and inbound logistics (Burch, Dixon & Lawrence, 2013). Cost savings are what the company has been able to achieve by a considerable degree because of its good relationship with suppliers and its technological competence. The efficiency in distribution is certainly tough to imitate because a few of the technologies used in the process are indeed very sophisticated, and it is not something that can be easily substituted either. However, if Woolworths Supermarkets ever manufactures products that are inferior in terms of quality and are not up to customer satisfaction then even having such a wonderfully efficient distribution system in place will not help the company to survive in the market. The effective and efficient supply chain management system is something that can be regarded as a highly distinct competency for sure but it needs to be complemented and supplemented by a wide range of other competitive advantages.
References
About the Australian Dietary Guidelines | Eat For Health. (2018). Retrieved from https://www.eatforhealth.gov.au/guidelines/about-australian-dietary-guidelines
Arli, V., Dylke, S., Burgess, R., Campus, R., & Soldo, E. (2013). Woolworths Australia and Walmart US: Best practices in supply chain collaboration. Journal of Economics, Business & Accountancy Ventura, 16(1).
Blundell, L. (2013). Resurrection of a retail giant. Property Australia, 27(9), 22.
Burch, D., Dixon, J., & Lawrence, G. (2013). Introduction to symposium on the changing role of supermarkets in global supply chains: from seedling to supermarket: agri-food supply chains in transition. Agriculture and Human Values, 30(2), 215-224.
Cameron, A. J., Sayers, S. J., Sacks, G., & Thornton, L. E. (2015). Do the foods advertised in Australian supermarket catalogues reflect national dietary guidelines?. Health promotion international, 32(1), 113-121
Fair trading laws. (2018). Retrieved from https://www.business.gov.au/info/run/fair-trading/fair-trading-laws
Frésard, L., & Valta, P. (2016). How does corporate investment respond to increased entry threat?. The Review of Corporate Finance Studies, 5(1), 1-35.
Heffernan, M. (2018). Costco: We’re 28 per cent cheaper than Woolworths, Coles. Retrieved from https://www.smh.com.au/business/companies/costco-were-28-per-cent-cheaper-than-woolworths-coles-20170310-guvgmv.html
Knox, M. (2015). Supermarket monsters: The price of Coles and Woolworths’ dominance (Vol. 6). Black Inc
Kor, Y. Y., & Mesko, A. (2013). Dynamic managerial capabilities: Configuration and orchestration of top executives’ capabilities and the firm’s dominant logic. Strategic Management Journal, 34(2), 233-244.
Lawley, M., & Birch, D. (2014). Food marketing in Australian higher education: The current state of play.
Lewis, T., & Huber, A. (2015). A revolution in an eggcup? Supermarket wars, celebrity chefs and ethical consumption. Food, Culture & Society, 18(2), 289-307.
Lewis, T., & Phillipov, M. (2016). A pinch of ethics and a soupçon of home cooking: Soft-selling supermarkets on food television. In Food, Media and Contemporary Culture (pp. 105-124). Palgrave Macmillan, London.
Loertscher, S., & Marx, L. M. (2017). Merger Review for Markets with Buyer Power. Mimeo.
Low wages, high debts and housing bubble threaten the Australian economy in 2018. (2018). Retrieved from https://www.abc.net.au/news/2018-01-04/australian-economy-threatened-by-low-wages-high-debts-bubble/9286048
Meet the suppliers to the major supermarkets – ABC Rural – Australian Broadcasting Corporation). (2018). Retrieved from https://www.abc.net.au/site-archive/rural/news/content/201303/s3715717.htm
Merrett, A., & Smith, R. L. (2013). The Australian grocery sector: structurally irredeemable?. The State of Competition.
Phillipov, M. (2016). ‘Helping Australia Grow’: supermarkets, television cooking shows, and the strategic manufacture of consumer trust. Agriculture and human values, 33(3), 587-596.
Sage, C., & Goodman, M. K. (2016). Food Transgressions: Ethics, Governance and Geographies. In Food Transgressions (pp. 19-32). Routledge.
Strategy and objectives – Woolworths Group. (2018). Retrieved from https://www.woolworthsgroup.com.au/page/about-us/our-approach/strategy-and-objectives/
Technology and Innovation – Australian Bureau of Statistics. (2018). Retrieved from https://www.abs.gov.au/Technology-and-Innovation
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download