Woolworths is one of the giant retailers across the globe. It is present in several countries across the globe and with its wide network of functionalities; organization has acquired its effective image in the global market. Woolworths Limited is an Australian company and it is one of the leading retailers in the Australian retailing industry. Its primary competitor is Coles a subsidiary of Wesfarmers. Both these companies have acquired approximately 80% market share of the Australian market through which duopoly market conditions have been made in the Australian retailing market. With regards to enhancing organizational performance as well as for gaining competitive advantage, organization requires adopting appropriate strategies for sustained growth and overall development in the dynamic and competitive business environment (Woolworths, 2018).
External factors play a very important role in the organization’s success. For strategic management, it is necessary to analyse all the external factors and plan strategies accordingly. PESTLE analysis is a framework used for analysing external environmental factors so that effectiveness of organizational strategies could be analysed. Organization is planning for enhancing its performance in the target market along with attaining sustainable growth and overall development. External factors directly impact the sustainability and survival of an organization as these factors have that capability to affect the operations in several ways. Following is the detailed analysis of PESTLE framework in relevance with the Woolworths functionalities:
Political factors are the most effective factors which affects organizational performance. As Woolworths operates in different parts of the globe, thus, they are required to adopt appropriate strategies with relevance to the political factors of different parts of the globe. Political factors directly or indirectly could easily affect organizational long term profitability and as Woolworths sells number of items in their supermarket, thus, it is necessary to determine the political stability, corruption level, legal and political frameworks, and regulations in relevance to the operations of retail stores through which appropriate strategies could be framed for overall development and sustained growth of the organization (Amatulli, Caputo & Guido, 2011).
Every country has different economic factors and major components of this factor are interest rate, inflation rate, exchange rates, etc. While designing the strategies, Woolworths should consider these factors in relevance to the different marketing conditions for attainment of their desired goals and objectives. In terms of expanding the business in international market, organization should consider the growth rate, economic conditions and the consumer behaviour of the particular market through which relevant decision could be taken for selecting an appropriate destination for expanding organizational operations (Darnall, Henriques & Sadorsky, 2010).
Social factors are the most effective factors as per the functionalities of Woolworths Limited because their primary operational area is retail sector. Under this sector, consumer behaviour, their demands and wants, marketing trends and other relevant factors needs to be considered before introducing a new product in the market or before introducing its business in the other markets. Woolworths deals in millions of products and every product has different consumer segment so, in order to enhance the customer satisfaction and for developing reliable image amongst the customers’ mind-sets’, it is required for the organization to consider their demands through which relevant products could be offered to them for fulfilling their demands (Dixon, Scura, Carpenter & Sherman, 2013).
With the effect of trending technologies, business entities’ functionalities have been changed and with regards to this, organization needs to perform their actions in order to enhance customers’ experience. With the adaptation of appropriate technology, organization could easily move towards automation which is ultimately an effective and appropriate medium for enhancing organizational performance. Impact of technology is one of the great measures for executing tasks with the objective of making effective strategies for gaining desired goals. Introduction of modern technology in the business operations will help the organization to create positive impact over its product offering, controlling waste management and managing safety stock level for the objective of fulfilling consumers’ demands and wants. Apart from this, technological factors also play pivotal role in terms of enhancing organizational performance along with gaining competitive advantage (Dobbs, 2014).
Legal factors of every country are also different and legal factors have strong impact on the intellectual property rights of an organization. Before entering into a new market, organization should consider their legal factors and as Woolworths Limited is engaged in the retail operations and every country has different laws and regulations regarding the products sold in the retail stores, thus, it needs to be considered for the objective of attaining organizational desired goals and objectives.
As such Woolworths does not perform any activity which could affect the environment, still, it is required for the organization to invest in making effective CSR and environmental policies in order to remove the environmental barriers. As Woolworths Limited is designing its strategies for the objective of enhancing its performance and to gain sustainable growth, thus, it is required for the organization to consider each and every aspect in relevance with developing effective strategies (Dulat, et. al., 2016)
The stakeholders are the vital component for any organisation and critical understanding is necessary of their thought process and leveraging the stakeholder base. The basic journey of the company not only includes the business risks but also meets the expectations of these key stakeholders which are outlined below. The stakeholders include the customers, suppliers, the government and the customers and the employees as well (Eberl, 2010).
Customers: Across the 1500 stores the efforts are aligned by the company to make the customer happy and satisfied in terms of the quality of the product, value and the sustainability. In addition to this the company will grow in terms of the customers if they are satisfied and the company is highly engaged in the customer satisfaction methodology. Therefore the need of the customer is the qualified product.
Employees: Woolworths has employed over the 46000 people across the globe and the operations do recognise the role of a leader as well as the pioneer to inculcate the wellbeing of the employees. Moreover the investment of the employees in the skill building activities and the constant working environment highly affects the organisation in general (Ferrell, Gonzalez-Padron & Ferrell, 2010). Hence the need of the employees is the comfortable environment to work in the organisation.
Suppliers: the need of the supplier is to sell the goods at an effective price.The insource and the outsourcing of the direct and the indirect suppliers and the Woolworths also strive to promote the favourable terms and the support of the development in the long term and the sustainable way.
Communities: the communities require the reversal of the support and the efforts made by the company. The operations of the company are scattered in South Africa and other 11 Sub-saharan African countries as well as in Australia and the New Zealand. The Woolworths organisation typically is involved in taking the initiatives in the areas in which Woolworth’s operate.
Shareholders: Woolworths is having numerous shareholders in Australia and South Africa having wide range of the individuals and the institutions.
Debt funders: the major source of the capital is that the Group ensures the funds are sufficient to meet the financial obligations and business objectives while managing the related tasks. Woolworths is also engaged in the partnership of the government departments and non-governmental organisations. Apart from this media and the academics are also part of the stakeholders.
Stakeholders can influence the strategic decision making of an organization as an organization runs because of stakeholders. There are different stakeholders that play variable roles in an organization like customers buy the product or services to make the organization profitable and on the other end Debt funders are the major source of capital for the organization. When any of the stakeholders have some concerns regarding the strategies of the organization then there will be a change in the strategies for smooth running of organizational operations. It is the responsibility of an organization to make stakeholder’s happy and satisfied.
The main strengths of the Woolworths Company is that it is the set pioneer among the modern retail giants and the one of the oldest company that is itself a brand of trust and assurance and the customers can link with it easily. The Australian retail market is governed by entirely two players such as Coles and Woolworths and both of them are the market leaders and holds almost 80% of the market share. Apart from that the ability to manage and balance the segments across the income strata is what makes them a unique brand (Helms & Nixon, 2010).
Woolworth’s targeted segments are utilising the same products. Therefore the confused ideas and thought process to the customers can always create a hassle in the end and the customer thereby takes a back step on the terms of whether the market will provide the better products or services or not. The partial behaviour towards the premium selling sections will lead to more problems in the areas which are operating under low profit and hence the company will eventually have to face more losses (Lee, et. al., 2011).
The opportunity is always in the hands of the company in terms of how different the products and the services can be created if the competition is high and how well the company can cater the needs of the customers. Woolworths get to have as they can assist them in devising such strategies and the policies which ultimately will be in the favour of the customers.
The competition is high and in addition to the list of the competitors Amazon is the tough competitor of the Woolworths. The constant awareness among the customers and this creates a threat for the Woolworths on account of the need of the new portfolio are necessary. Henceforth, the company needs to make certain amendments and therefore the company is facing the threats. The constant change in the strategies of the other company is also a concern to the Woolworths which leads to choices for them. First to enter into a different line of segment that can cost them huge amounts and to devise the strategies in response to the changes taking place in the external environment which is again time consuming and therefore the company needs to focus on each aspect to cater the needs of the customers in future (Kurnia, et. al., 2014).
This is an effective framework useful in terms of analysing organizational performance with regards to certain internal and external factors. This framework is also useful for executing industry analysis of a particular organization as its primary elements are linked with the external business environmental factors. Woolworths is a giant player of retail industry in Australia and with regards to the formation of new policies in order to enhance organizational performance.
This factor’s impact over organizational strategies is bit less in comparison to the other factors of this framework. This is because Woolworths has acquired leading position in the Australian retail industry, thus, it is bit difficult for the new organizations to set up their position in the Australian retail industry and face competition from the big retailers like Woolworths, Coles, Aldi, etc. Apart from this, Woolworths’ product offering is wide which targets number of customer segments and setting up new business at such big scale is not possible for new entrants. Small local retailers affect organizational sales because for petty things, buyers usually do not take many efforts and they go to their local shops (Kurnia, et. al., 2014)..
Woolworths is a multinational conglomerate and mainly engaged in the retail industry. Their product offering is huge through which organization has been able to target numerous customer segments. Primary substitutes for big retail players like Woolworths are local retail shops and small supermarkets which mainly operate in the local markets. Their product offering is not such high through which they could be able to affect Woolworths’ sales and performance.
Buyer’s power in terms of retail industry is high because they have various options and choices and their switching cost is also less. Apart from this, competition in the Australian industry is intense due to which organizations needs to adopt unique, attractive and other appropriate measures for the objective of making their brand positioning effective.
Impact of supplier’s power is also less because every supplier wishes to work with such a giant player like Woolworths. Working with Woolworths could easily help the suppliers in order to boost up their revenues, profitability and market value in the target market (Alamdari & Fagan, 2017).
Competition in the Australian retail industry is quite intense and with regards to this, every organization is required to adopt unique strategies in order to make its separate image from competitors. In addition to this, organization could also introduce new products and services to retain its customer base along with targeting new customer segments (Lee, et. al., 2011).
There are three main functions that contribute in creating value and promises of the organization.
Currently, Woolworths is one of the giant players of retail industry in Australian market and in order to enhance their performance in the target market along with enhancing its customer base, revenues and profitability, following modelling tools have been adopted by the organization:
The positioning of the Woolworths is directly related to the retailing activities in relation to the home products and day to day necessities which is clubbed with the facility of the clothing line and the fashion accessories. The company controls the majority of the market in the Australia and the positioning encompasses the needs and the preferences of the users and the creation of the market segmentation. The company has also started positioning itself in a better manner through the initiation of the campaigns and bringing the deliverance and the manufacturing of the product on one path. The company is also engaged in the promotion of the platform for catering the needs of the consumers through the implementation of the Big Data Analytics (Davoudi Nasr & Cheraghi, 2017). There is a huge customer satisfaction from Woolworth as it provides the quality product and services to the customers to provide them a better experience.
This strategy defines that organization requires differentiating their image in the target market in comparison to its competitors by making their products and services unique, more effective than earlier or by providing certain additional benefits. In terms of differentiation strategy, organization requires adopting appropriate measures through which their current product offering could be enhanced by adding certain values and features in the organizational products (Sutton-Brady, Kamvounias & Taylor, 2015). Apart from this, organization could also consider outcomes of market research activity with the objective of evaluating their demands and wants so that appropriate products and services could be provided in terms of fulfilling their demands and wants. Along with providing appropriate products and services to the consumers as per their demands and wants, organization could also provide customisation option to its customers with regards to the improving organizational image amongst the consumers. Although, providing customisation option in retail store is bit difficult because as such every consumer has similar requirements in relevance to the grocery items, and other general merchandises but still, there are various options which could be provided to their target audience in relevance with making their separate image amongst their competitors (Rahayu & Day, 2015).
Apart from this, organizational could focus on expanding its product and service offering with the objective of targeting other consumer segments. The more organization will expand its product offering, the more organization will be able to expand its consumer base. Along with this, organization could also take feedbacks and opinions from its existing and potential customers to widen up its existing product offering in order to maximise its consumer base as well as to boost up its performance in the target market. This will help the organization to develop its effective image amongst the target audience along with gaining competitive advantage (Schramm-Klein, Morschett & Swoboda, 2015).
In addition to the differentiation strategy, organization could also adopt cost leadership strategy under which cost of production will be minimised by cutting unnecessary costs and expenditures which is affecting final prices of the products. With regards to the cost leadership strategy, organization needs to adopt appropriate measures through which cost could be reduced along with maintaining same sort of quality in the product offering so that existing and potential customer segment could easily be retained. Cost leadership strategy does not affect organizational profitability because profit margins are not lower down to decrease the prices of the products. Only unnecessary costs and waste is controlled in order to decrease the actual cost incurred so that larger target audience group could be targeted. Along with this, cost leadership strategy is one of the most crucial and effective strategies through which organization could easily enhance its performance along with gaining competitive edge over its competitor in the market (Paul, 2018).
Apart from this, this strategy is also helpful in attracting different consumer segments which ultimately helps in enhancing customer base. With the huge customer base, organization could move towards the leading position in the target market which is essential in terms of attaining sustainable growth and overall development (Ogasavara, Boehe & Cruz, 2015).
Coles and Woolworths are the two major retail players of the Australian retail industry and they both have formed duopoly market conditions with acquiring approximately 80% share of the Australian market. Although, Coles is far behind Woolworths in terms of numbers but still there is a huge possibility that Coles could acquire Woolworths’ market share (Robertson, 2018).
As per the above figure, it could be evaluated that Woolworths is beating Coles on every metric and with regards to this, it is determined that Woolworths is the leader of Australian retail market. But, as Coles is the primary competitor of Woolworths, organization requires tightening up the things so that Coles could not get any opportunity to step ahead. With regards to this, organization has adopted several strategies to enhance their growth as well as to expand their product offerings for targeting other consumer segments (Vangchhia, et. al., 2018). As organization has developed a new strategic plan for enhancing organizational performance and to acquire a large part of the retail industry, it is required for the organization to regularly analyse the market conditions through which target audience’s requirements could be analysed through which product offering could be expanded on the basis of their requirements and demands. This will help the organization to retain its acquired position in the target market along with boosting customer satisfaction and overall performance of the organization in the target market (Barin, et. al., 2015).
Strategic planning is an organizational activity that is essential for setting priorities, goals and objectives of the organization in relation to the available resource with the organization. Woolworths Limited is a strong player in retail industry in Australia and along with this, organization has also established its effective international presence in the target market. While designing the strategies for any organization for enhancing its performance and for boosting up its goodwill in the target market, it is necessary to consider every relevant stakeholder’s actions and their objectives, employees’ feedback should also be taken as they are the people who practically bears the marketing conditions, meets with the clients on behalf of the organization, etc. Thus, their involvement is very necessary for formulating strategies for the organization (Pehrsson, 2017).
Strategic plan is a documented report which will include all the goals, objectives, mission and vision of the organization along with the strategies and the ways which will be followed to reach to the desired destination. Major factors which will be considered while formulating the fundamental strategic plan for Woolworths are their key stakeholders, board of director’ opinion, physical marketing conditions, consumer behaviour, market trend, competition in the market, and all other parties and factors which will be affected by the new strategies (Gao & Hafsi, 2018). While implementing the strategic plan, organization needs to take consent from the majority of the members so that it could be approved and in relation to this, meeting will be conducted for providing them information with regards to the adopted strategies.
The suitable structure of the company depends upon the primary components of a strategic plan are organizational objectives, goals, mission, vision, SWOT analysis, competitive business environment, and external analysis through which appropriate strategies could be developed in relation with the attainment of desired goals and objectives. Woolworths Limited has acquired a big market share in the Australian retail industry and in relation to this; organization is required to gain competitive advantage by adopting set of unique and advanced strategies. With regards to this, it is required for the organization to analyse its strengths and weaknesses in consideration to the external business environmental conditions through which an effective strategic plan could be designed which could be able to deal with dynamic business environment’s situations (Davoudi Nasr & Cheraghi, 2017).
After providing information sufficient information to all the stakeholders and relevant parties with the objective of implementing appropriate strategic plan in relation with gaining desired goals and objectives. The revie can be done on the basis In relation with obtaining consent from all the stakeholders, it is required for the organization to discuss all the strategies and the steps in a systematic manner with regards to the attainment of sustainable growth and overall development (Banker, Mashruwala & Tripathy, 2014).
In relevance with evaluating the strategy plan of the organization with regards to the organizational goals and objectives, it is necessary to adopt appropriate measures through which effectiveness of the strategic plan could be evaluated. Primary elements which will be used for evaluating strategic plan for Woolworths will be evaluating the strategies on the basis of external environment conditions. Another measure which will be adopted will be taking feedbacks from the employees and other stakeholders in relation with the application of new strategies implemented. Challenges and issues faced by the employees will be analysed so that relevant and required changes could be implemented in order to resolve those challenges. This will help the organization to boost up its performance in relation with involving the employees and other stakeholders in the decision making process. This helps the organization to develop an effective and reliable strategic plan through which sustainable development and growth would easily be attained (Wardle & Chang, 2015).
Woolworths is a behemoth player in supermarket retail industry in Australia. It is an Australian supermarket store and it was founded in 1924 and since then it has developed its effective position in the Australian market. Woolworths and its primary competitor i.e. Coles has together acquired 80% of the Australian market. Their core values are centred on the customer satisfaction as they deals in grocery, household and various other daily usage things which are directly consumed by consumers (Woolworths, 2018). Thus, they have set their mission to deliver best in convenience, value and quality to their customers. Organization has established more than 3000 stores across the globe with more than 205,000 employees who serve more than 29 million customers every week. With relevance with enhancing customer satisfaction, organizational management launched “the fresh food people” campaign in 1987 that lasts long till 2012 which was later on in 2014, re-launched with the motive of enhancing organizational performance and for gaining desired goals and objectives. In terms of organizational core values which includes ethical, environmental, cultural, and social and business values have the priority to customer satisfaction (Alamdari & Fagan, 2017). Following are some of the crucial core values for the organization:
Currently, organization is planning for sustainable growth and development in order to attain competitive advantage as well as for the objective of enhancing its performance in the target market. With regards to these objectives, organizational existing values and strategies are supportive enough through which desired goals and objectives could easily be attained. With regards to the core values of the organization, the best mission which could be developed in relevance with the organizational goals and objectives for attaining sustainable growth and development.
It could be satisfying customer’s demands by enhancing product and service offerings in terms of targeting other consumer segments. Along with this, organization has also adopted sundry set of strategies in terms of combining employees’ feedback and their opinion in organizational strategies to gain desired goals and objectives (Woolworths, 2018).
With regards to this mission, organizational vision is to be the world’s most responsible retailers in terms of reflecting passionate commitment for doing business considering consumers, employees, society and environment. Organization has millions of product and for every product offering, there is a separate target audience, thus, with regards to this, organization is promoting its vision amongst their stakeholders to bring their interest as well as to uplift its performance in the target market (Rothaermel, 2015).
For evaluating strategic plan there should be some steps. Woolworth has to know the level of satisfaction of its target audience in tern of liking the product. As there are different target market segments so reviews have to be taken in different ways. It is necessary to evaluate the effectiveness of strategic plan for making improvements in the same. There can be feedback forms as well as personal review meet.
In relevance with the functionalities of Woolworths Limited, it is required for the organization to cope up with the external business environment conditions so that desired goals and objectives could be attained easily. With effect of this, organization has planned to formulate a strategic plan so as to uplift their performance as well as to gain competitive advantage. This strategic plan consists of several strategies with regards to the upliftment of organizational performance and it is necessary for the organization to design a format under which these strategies could be implemented as per the requirement of organization. Below is the implementation and action plan of the strategies selected by the organizational performance:
|
Activity |
Time period |
|
External analysis |
First week |
|
Stakeholder analysis |
First week |
|
Industry and SWOT analysis |
Second week |
|
Modelling tools |
Third week |
|
Competitive analysis |
Third week |
|
Construction of strategic plan |
Fourth week |
|
Core values |
Fourth week |
|
Vision and mission statements |
Fourth week |
|
Monitoring and evaluating system |
After implementation of all strategies |
With regards to the implementation and action plan for implementing strategies of the organization with the objective of enhancing organizational performance, it is required to involve relevant employees and stakeholders to get their views on the implemented strategies. Apart from this, on regular intervals, organizational performance will be evaluated on the basis of adopted strategies and on the basis of expectations set by the management. Apart from this, organization should also consider employees’ feedbacks and opinions in order to find out their challenges while practising the new adopted strategies. As per their challenges and issues, relevant problem resolving techniques will be adopted through which employees’ morale could be enhanced along with motivating them for performing better in terms of enhancing organizational performance (Knox, 2015).
Conclusion
From the aforesaid information, it can be concluded that every organization requires adopting change in order to boost up the organizational performance and to make their functionalities as per changing business environment. This report has concluded strategic plan for Woolworths Limited which is seeking for enhancing their market share and to gain competitive edge over its primary rival i.e. Coles. With regards to their objectives and goals, set of effective strategies has been adopted in relevance with the external business environment conditions, competitive analysis, industry analysis, internal analysis, etc. In the last monitoring and evaluating strategies has also been discussed with regards to the adopted strategies in order to boost up the organizational performance and to remove the barriers and challenges faced by the employees in terms of practicing new strategies.
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