Write a business proposal for any significant Organisational issue.It could be any hypothetical or real issue in the Organisation.
Developing a business plan for any organization requires a thorough research and analysis of the existing market conditions, the competitors, and the demand of the products by the customers, the availability of the raw materials, the geographical locations and several other issues. The first and foremost thing that is to be done is the description of the products and services of the organization, which is followed by selecting the right market area so as to ensure that the markets are in suitable geographical locations and in close proximity to the customers. This is followed by the process of locating the targeted customers and the best and fastest ways of reaching them. Last but not the least is to try and relate these plans with the real world situation by anticipating the estimated sales, the cost of running the business, the anticipation of the risks, the profits etc.
Woolworths is a name that is quite well far across the Globe and particularly in Australia. It is one of the biggest and popular supermarket chains, that operate in Australia. Woolworths is such a company that promises to give hundred percent satisfactions to their customers and they claim their business to be a customer oriented business. In other words, profit maximization is not something, which the company believes to be its main motive; rather they believe that customer satisfaction must always be their top most priority.[1] In order to ensure that all their customers are happy with their service, they need to look after each and every detail of their business operation starting right from the quality of the products to the outlook of the stores, coupons, vouchers and of course the overall customer service.[2]
However, over the past few years, this organization is facing a severe issue, which is decreasing their market shares and eventually their profit margins. The current challenge that is being faced by this company is that of customer dissatisfaction. Out of five star rating, this organization has got a mere rating of only three stars as has been suggested by the last current records. Apart from this, the customers are also complaining about issues like poor and stale products, low-quality products, false vouchers and coupons, poor customer care and helpline services etc.[3] According to the initial business strategies of this organization, the target customers were mainly the children and the teenagers or the young people, who are students and office people and also the older generation of people because they are usually in need of lot of energy and will definitely have a demand for fresh, healthy and unadulterated organic products and grocery items like fresh fruits, vegetables, meat, health and energy drinks and health drinks etc.
However, according to some customers, they were highly unhappy with the quality of the fruits and vegetables that were available at the store outlets. They were stale and not fresh as the customers expected. Moreover, there were issues with the quality of milk that was being sold. According to some customers, the milk was not as fresh and healthy, as it should have been or as per the price.[4] It is quite obvious that the customers will not accept any poor quality goods if they are paying the exact price for the same. [5]
Over the last few years, Woolworths is facing several issues related to their business, which is not only hampering their total sales that eventually bringing down their profit margins but is also shaking the customer goodwill which is supposed to be the very base of their organization. Being a supermarket chain, they often have to face severe tough competitions from their competitors operating in the market. Some of the well known and powerful competitors of the Woolworths are Coles, Wesfarmers, Aldi etc. These supermarkets also are in search for opportunities to increase their sales and as the records and reviews from different sources suggest, over the years Woolworths is receiving a very tough challenge from all these companies and is unable to come up and solve the loopholes that have somehow crept into their business organization.
One of the major issues that are responsible for the recent deteriorating market shares of Woolworths is its customer dissatisfaction.[6] This is something that must be the topmost priority in the business planning of any company, particularly a company like Woolworths, which operates in supermarket chains[7]. Supermarket usually is a place where the customers come in search for good, healthy and fresh items that will not cause any harm to them rather will enable them to have a happy, healthy and disease free life[8].
Woolworth’s deals in both organic and well as other grocery products and over the past few years, the reports are showing that the quality of these products has deteriorated a lot. It is a natural thing for the customers to deflect or avoid buying products from the groceries that sell damaged or poor quality products. The customers have vested their faith in the organization for several years and will obviously not face issues like this.[9]
The company was slowly earning bad reputation from the customers because of the voucher scam. The customers have vested their trust in this company for several years and are in search of some added advantages like free gifts, coupons, vouchers etc. Woolworths also allowed discounts to its customers on meat, but unfortunately, these vouchers malfunctioned and misguided the customers as the discount was only on particular kind of meat and not on all types.
In order to overcome this, the organization adopted several measures like appointing a separate group of staffs to take care of the discount coupon section so that no false information is printed on it. To take care of the fact that the customers are no longer mislead, immediate action was taken to correct the false information that created all these confusions.
Figure 1: Business plan
(Source: woolworthsgroup.com.au. 2015)
Strength- The major strength of the company as was estimated in the proceeding business plan was that this organization had the potential of becoming the leading retailer in Australia and it could utilize its strong resource base to create good presence across the industry. The strength of this enterprise was its major contribution towards the society. It has been noticed over the years that the enterprise has really been able to achieve its goal of zero food waste thus trying to fulfil its goal of making the world a better place to live in.
Weakness- The major weakness that the company is most likely to face is the tough competition existing in the market. As this enterprise mainly deals in the retail chain of markets, it is likely to come across a very severe competition by other retail organizations like Kmart, Wesfarmers chain etc which have also started using tools like discounts and rewards to gain a huge customer base.
Opportunities- The business plan at the same time talks about the different opportunities available at the disposal of the company, which it can use to develop itself. Opportunities for modern scientific digitalized devices, advancement in the supply chains and changes in the consumer lifestyles. Multi option retailing is another opportunity that this company can look forward to in order to cater to the varying needs of the consumers and they must start using these modern scientific devices in order to increase the customer satisfaction by creating online customer forums, helpline numbers, or by providing free internet access in the branch outlets etc which would help them to deal with the prevalent issue of customer dissatisfaction.
Threats- The threats as were analyzed are mainly from the other retail markets existing and operating in the market like Coles Supermarket. Another threat can be the intervention of the Government, which might stunt the growth in some parts of the retailing industry. They must start adopting measures to deal with these threats so that they can deal with the issue of customer satisfaction, as there is a high chance that the customers can soon switch over to other alternatives that are readily available in the market.
Bargaining power of the customers is relatively higher because they have a large number of alternatives to switch over as there are many supermarkets providing the items of basic necessities in considerable amounts. Moreover, it has been seen that Woolworths is not able to satisfy its customers related to issues like product quality, store outlook, and management, customer helpline services, offers, rewards, vouchers, and coupons. The other competitors in the market will naturally grab the opportunity and will provide the customers with all these facilities that Woolworths is failing to give them. The threat of entry of new firms and entry of new substitutes is relatively lower than the threat of rivalry that exists between the Australia retail firms. There are some of the major competitors that might give a very strong competition in the long run.
As per the strategies planned to overcome the challenges, the organization needs to implement some changes in its operations. To run the organization smoothly and increase the profit margin, Woolworths must take necessary actions and that incurs some cost. The cost is nothing but investments for the improvement of the services of the company. It should improve its customer care service, in store and online. There is official website and mobile app for Woolworths. The support services through the app and website should also be improved. It must also change the strategies regarding the vouchers and discount coupons. For that, it must print new coupons with correct validity and information. The gifts to the customers should be provided with bulk purchase or with a certain amount of purchase. The estimated costs for the new strategies are listed in the table below.
|
Actions |
Cost in AUD |
|
Improvement in technology (website and mobile app) |
30,000 |
|
Hiring more staff for customer support |
15,000 |
|
Printing new coupons and vouchers |
10,000 |
|
Procurement of free gifts |
35,000 |
|
Marketing |
3,000 |
|
Total |
93,000 |
Timeline
|
Task name |
Duration (Months) |
|||||||||||
|
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
|
|
Meetings for new strategies |
||||||||||||
|
Recruitment of staff |
||||||||||||
|
Orientation and training of new staff |
||||||||||||
|
Allocation of new staff for customer support |
||||||||||||
|
Improvement in website |
||||||||||||
|
Improvement in mobile app |
||||||||||||
|
Printing of new coupons |
||||||||||||
|
Procurement of gifts |
||||||||||||
|
Marketing |
||||||||||||
|
Distribution of coupons |
||||||||||||
|
Distribution of gifts |
(Source: Author)
I was involved in the project and tried my level best to solve the current issues of the organization. According to my understanding, customer satisfaction is the first priority of the organization and hence, it must try and improve on all those grounds related to the issue of customer satisfaction and goodwill. As my involvement was in the discount and voucher section, I came to know that the company is also facing several issues quite recently regarding the false information being printed on the vouchers and thus, misleading the consumers.[10] The company also suffered the meat voucher scam where the consumers complained of having been misguided regarding the discount offer that should have been on all types of meat as per the documents but was allowed only on the fresh meat. [11]It was because of this reason that measures are to be taken for proper implementation of the offers and the discounts. [12]In today’s world, the customers are looking forward towards best of the facilities and are not going to tolerate any thing that would dissatisfy them. Hence, I being involved in the project proposed the idea of appointing a separate group of staffs who would be looking after the discount plans and the voucher and coupon section. There must also be some staffs placed at every outlet of the organization who can guide the buyers regarding the discounts and the offers that are available on various products.[13]
Benefits of the investment can be derived through a break even point analysis of the investment of Woolworths. This break even analysis depicts the relationship between the volume of cost and profit level at different levels of activity of the organization, with an emphasis on the break even point. At this point, the organization earns neither profit nor loss. This point is reached when the money earned from sales becomes equal with the money spent on production of goods and services[14]. The estimated cost of the company represents the investment done by Woolworths for implementing the project improvement plan. It helps in measuring the profit and losses of the organization at various production levels. However, it assumes that the sales prices are constant at all levels of production and the production and sales are same. Moreover, it can be applied to only one product or product mix at a time[15].
Figure 2: Break Even point analysis
(Source: Narasimhan 2016)
The above figure explains the fundamentals of break even analysis. In the new plan for Woolworths, it can be found that there are mostly variable costs. However, the variable costs change according to the level of sales, while the fixed costs remain the same throughout the production time. Initially, the company would face a loss, as the cost curve lies above the total revenue curve. When the investments would start to give the returns, then a point will be reached, when the cost and revenue of the company would be equal and there would be neither profit nor loss. After that point is reached, the revenue curve goes higher than the cost curve and profit margin starts to increase[16]. Woolworths would be implementing the changes in 12 months of duration. It can be assumed that the returns of the investments would be generated after the 12 months. The plan expects to improve the customer services, thereby improving the customer satisfaction level. Hence, level of sales would increase, and the gap between the cost and revenue would be decreasing till the break even point is reached.
The benefits of investment are that, it will eventually bring about a positive performance and profit of Woolworths by improving various services of the company. Unless the investment is made, the changes in the strategy cannot be implemented.
As far as my recommendations are concerned, I would like to suggest that the organization keeps a check into the matter that customers are not misguided or misled in any way. They must try and improve in terms of discounting and voucher allowances, no false information is to be printed on the vouchers.
Modern scientific methods must be adopted for gaining control over the online marketing as well. Developing some home pages or portals giving vivid descriptions of the organization and its products will be very helpful for attracting more number of customers. Developing customer forums is also quite instrumental in interacting with customers. Apart from this, starting to, me delivery systems will also give the customer base a great boost. This will put the organization on a fast gear because customers are always ruining search for that what is easy and beneficial for them. The organization must also arrange for the customer loyalty programs to adopt better means for providing customer satisfaction.[17]
Conclusion
Thus it is seen from this business plan that there are some very critical issues existing within this organization that needs to be solved immediately. The customers are not really happy with the overall customer service and so the company needs to work hard on improving their store outlets, the product quality, customer assistance etc. The company must not only be concerned about abolishing the competition but also work for the overall improvement. The business plan suggested that there has to be offers and discounts on all products that the company will operate in starting from the organic products that are fruits, vegetable to the grocery items and even on items like petrol and diesel. For every purchase of the company’s products, the customers would get discounts. This is how the marketing strategy of the business was proposed and this would satisfy two fold goals-firstly, it would increase the goodwill of the customers thus strengthening the customer base of the company and secondly it would give a boost to the total sales of the business. Once the company is able to win over the trust and good reputation of the customers, it automatically opens several doors of opportunities in front of the company for proper growth and development.
References
An, R., 2013. Eating Better for Less: Effectiveness of Financial Incentives in Modifying Dietary and Grocery Shopping Behavior (Doctoral dissertation, The Pardee RAND Graduate School).
Beneke, J., Blampied, S., Cumming, R. and Parkfelt, J., 2015. Scrutinising the effectiveness of customer loyalty programmes: A study of two large supermarket chains in South Africa. African Journal of Business Management, 9(5), pp.212-222.
Beneke, J., Chamberlain, V., Chohan, R. and Neethling, M., 2015. The effect of corporate reputation on retailer brand equity: A study of two South African grocery chains. Journal of Business and Retail Management Research, 9(2).
Duong, Q.B., 2016. The influence of store environment on customer satisfaction across different customer demographic segmentations within Australian supermarkets.
Flax, J., Bick, G. and Abratt, R., 2016. The perceptions of supplier-buyer relations and its affect on the corporate brand. Journal of Brand Management, 23(1), pp.22-37.
HA Bijmolt, T., KRE Huizingh, E. and Krawczyk, A., 2014. Effects of complaint behaviour and service recovery satisfaction on consumer intentions to repurchase on the internet. Internet Research, 24(5), pp.608-628.
Hennessy, J., Hennessy, J., Meagher, E. and Meagher, E., 2017. Hohner Musikinstrumente GmbH & Co. KG: Break-Even Analysis. Kellogg School of Management Cases, pp.1-5.
Hughes, S.J., 2016. Loyalty vs deception: the truth behind’organic’and’free-range’brand labels (Doctoral dissertation, The IIE).
Lewis, T. and 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 UK. Wang, Z., 2015. Supermarkets and gasoline: An empirical study of bundled discounts.
Makhitha, K.M., Van Heerden, G. and Wiese, M., 2014. Craft retailers’ supplier selection criteria-a key to market access. Journal of Contemporary Management, 11(1), pp.266-286.
Methner, N., Hamann, R. and Nilsson, W., 2015. The Evolution of a Sustainability Leader: The Development of Strategic and Boundary Spanning Organizational Innovation Capabilities in Woolworths. In The Business of Social and Environmental Innovation (pp. 87-104). Springer International Publishing.
Mortimer, G., 2015. Woolies’ new loyalty program offers a glimpse into the future. The Conversation, (27).
Narasimhan, C., 2016. Breakeven Analysis. TC, 2, p.R3.
O’Kane, G., 2016. A moveable feast: Exploring barriers and enablers to food citizenship. Appetite, 105, pp.674-687. Young, G. and Hagen, P., 2014. 7 Encouraging Fresh Food Choices with Mobile and Social Technologies: Learning from the FlavourCrusader Project. Eat, Cook, Grow: Mixing Human-Computer Interactions with Human-Food Interactions, p.117.
Opie, R.S., Segal, L., Jacka, F.N., Nicholls, L., Dash, S., Pizzinga, J. and Itsiopoulos, C., 2015. Assessing healthy diet affordability in a cohort with major depressive disorders. Journal of Public Health and Epidemiology, 7(5), pp.159-169.
Parker, C., Brunswick, C. and Kotey, J., 2013. The Happy Hen on Your Supermarket Shelf. Journal of bioethical inquiry, 10(2), pp.165-186.
Thom, A. and Conradie, B., 2013. Urban agriculture’s enterprise potential: Exploring vegetable box schemes in Cape Town. Agrekon, 52(1), pp.64-86.
Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth, profitability, and family leadership. Springer
Opie, R.S., Segal, L., Jacka, F.N., Nicholls, L., Dash, S., Pizzinga, J. and Itsiopoulos, C., 2015. Assessing healthy diet affordability in a cohort with major depressive disorders. Journal of Public Health and Epidemiology, 7(5), pp.159-169.
O’Kane, G., 2016. A moveable feast: Exploring barriers and enablers to food citizenship. Appetite, 105, pp.674-687. Young, G. and Hagen, P., 2014. 7 Encouraging Fresh Food Choices with Mobile and Social Technologies: Learning from the FlavourCrusader Project. Eat, Cook, Grow: Mixing Human-Computer Interactions with Human-Food Interactions, p.117.
Hughes, S.J., 2016. Loyalty vs deception: the truth behind’organic’and’free-range’brand labels (Doctoral dissertation, The IIE).
Parker, C., Brunswick, C. and Kotey, J., 2013. The Happy Hen on Your Supermarket Shelf. Journal of bioethical inquiry, 10(2), pp.165-186.
Duong, Q.B., 2016. The influence of store environment on customer satisfaction across different customer demographic segmentations within Australian supermarkets.
Flax, J., Bick, G. and Abratt, R., 2016. The perceptions of supplier-buyer relations and its affect on the corporate brand. Journal of Brand Management, 23(1), pp.22-37.
Lewis, T. and 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
Thom, A. and Conradie, B., 2013. Urban agriculture’s enterprise potential: Exploring vegetable box schemes in Cape Town. Agrekon, 52(1), pp.64-86.
Methner, N., Hamann, R. and Nilsson, W., 2015. The Evolution of a Sustainability Leader: The Development of Strategic and Boundary Spanning Organizational Innovation Capabilities in Woolworths. In The Business of Social and Environmental Innovation (pp. 87-104). Springer International Publishing.
HA Bijmolt, T., KRE Huizingh, E. and Krawczyk, A., 2014. Effects of complaint behaviour and service recovery satisfaction on consumer intentions to Macmillan UK. Wang, Z., 2015. Supermarkets and gasoline: An empirical study of bundled discounts.
An, R., 2013. Eating Better for Less: Effectiveness of Financial Incentives in Modifying Dietary and Grocery Shopping Behavior (Doctoral dissertation, The
Makhitha, K.M., Van Heerden, G. and Wiese, M., 2014. Craft retailers’ supplier selection criteria-a key to market access. Journal of Contemporary Management, 11(1), pp.266-286.
Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth, profitability, and family leadership. Springer.
Hennessy, J., Hennessy, J., Meagher, E. and Meagher, E., 2017. Hohner Musikinstrumente GmbH & Co. KG: Break-Even Analysis. Kellogg School of Management Cases, pp.1-5.
Beneke, J., Blampied, S., Cumming, R. and Parkfelt, J., 2015. Scrutinising the effectiveness of customer loyalty programmes: A study of two large supermarket chains in South Africa. African Journal of Business Management, 9(5), pp.212-222.
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