Woolworths Group Limited is an Australian company which functions in the retail sector of the country. The firm has been able to acquire the second largest place in the retail industry in terms of the total incomes. Woolworths has also been able to become the topmost liquor based retailer in the industry. The first store of Woolworths was established in the year 1924 with a capital of 185,000 Dollars. The company has been operating in the retail industry of Australia for a long time and the revenues have increased in an effective manner as well. The new stores which were thereby developed by Woolworths were highly innovative in nature and had implemented effective technologies in order to operate in an effective manner (Woolworths.com 2018).
The report will thereby be based on the ways by which Woolworths can expand its operations outside Australia and New Zealand in order to develop a huge customer base. The company can also aim at increasing its presence in the retail industry. The expansion will also enable the organization to improve its revenues and profitability with the help of proper products and services that can be offered to the customers all over the world.
The countries which have been selected for the expansion based plans of Woolworths are Germany and China. The selection of proper expansion areas has been made with respect to the revenues that can be generated by Woolworths in these areas. Germany has been selected from the European continent and China has been selected from Asia. The countries will thereby be analysed with the help of PESTLE framework. The geo political situation of the countries will also be analysed in the report in order to decide the best suited for expanding the operations of Woolworths (Beamish and Lupton 2016).
The PESTLE framework can be used in an effective manner for the purpose of analysing the external environment based factors which are able to affect the expansion of Woolworths in China.
Political factors – China has positioned itself as a powerful country in the world. The country is also a permanent member of Security Council of United Nations. China is thereby considered to be the fourth biggest country in the world based on land area. The Communist Party of China is the major ruling party of the country which has been able to build a stable environment based on the political operations. The open and stable political environment in China can be considered as a major factor which can help in the operations of Woolworths. The company can enter the country successfully and further continue its operations as well (Yu and Ma 2015).
Economic factors – Economic environment of Chins is an important factor that needs to be considered in order to expand its operations in country. China is considered to be the second biggest economy in the world based on GDP. The purchasing power of consumers in the country is also quite high. The economic reforms which have taken place in China have played a major role in the growth of the country. The market based economy of China will able to provide enough support to the operations of Woolworths (Huang, Rice and Martin 2015).
Social factors – The population of China is highest in the entire world which is approximately more than 1.4 billion. The average levels of wages have thereby increased in the country which has led to the improvement of consumer spending. The rates of literacy in China is more than 90 percent. The impressive rates of progress will be able to affect the choices that are made by customers. Woolworths can gain a huge customer base in the country with proper services (Forsgren and Johanson 2014).
Technological factors – The biggest online population of the world is present in China which is around 772 million people. The large tech giants are present in country which have been able to develop an effective technological environment in China. The vision that has been set as the global leader in the fields of technology and science. The operations of Woolworths will be favourable due to the technological support which can be provided to the company by the environment in China (López?Duarte, Vidal?Suárez and González?Díaz 2016).
Legal factors – The laws which are able to regulate the employment based practices and business operations in China need to be considered by Woolworths. The different areas which need to be considered by the company thereby include, employee remuneration, labour standards and the benefits. The major laws which can affect the operations of Woolworths in China are The PRC Labour Law 1995, the PRC Labour Contract Law 2007 and the other administrative regulations as well.
Environmental factors – The natural environment of China has been largely affected by the rapid pace of economic development which is taking place in China. The different factors which have played a major part in the environmental degradation of China mainly include, water pollution, air pollution, changes in the climate and loss of biodiversity. Woolworths needs to consider the environmental situation of the country in order to develop its production processes so that their effect on the environment (Kolk 2016).
The geo political situation of Asia Pacific has altered a lot in the past few years and this has further affected the position of china in the area. The ASEAN association of the countries has been a major part of the geo political position of China. The two major driving forces which have been able to affect the situation of China in the ASEAN association mainly include, economic gains and the formation of effective alliance. The country has been able to increase its trade based activities with the help of proper alliances. The positive relationship which has been developed by China in the world can facilitate the operations of Woolworths (Luthans and Doh 2018).
China has been able to become a large trading based power and a country which is able to receive foreign direct investment in an effective manner. The trade performance and economic performance are based on the sound development based strategy and the reforms which have been implemented. The country had joined WTO in the year 2001 and they are also engaged in the bilateral and the regional trade agreements that have provided investment based liberalization. The trade policies and the business environment is favourable for the entry of Woolworths (Morschett, Schramm-Klein and Zentes 2015).
The risks which can be faced by Woolworths in China are based on the concerns which have been faced by the country based on high population growth. The urbanization based issues which are faced by the country can also affect the growth levels of Woolworths.
The opportunities which are provided to Woolworths are based on the economic growth and technological environment that has been built in the country. The social factors and choices of consumers are also an important part of the opportunities which are provided to the company by its operations in China (Perri and Peruffo 2016).
Germany is considered to possess the fourth largest economy in the world and the second largest exporter and third major exporter as well. The standards of living which have been developed by the country are also quite high. The environment of the country can be analysed effectively with the help of PESTLE framework.
Political factors – Germany is able to develop a democratic republic. The political system of the country functions in an effective manner under the system which is known as Grundgesetz. The Social Democratic Party is mainly responsible for leading the political system since the year 1949. The fundamental structure of the government is maintained in an effective manner with the help of the Federal Republic of Germany. The stable political environment will thereby provide effective support to the expansion plans of Woolworths (Horbach 2014).
Economic factors – The raw materials which are available in Germany are not enough for the operations of different organizations. The country is however considered to be a leading producer of the wind turbines and the solar power based technology as well. Germany is known to import around two-thirds of the required energy. The services sector of the country is able to contribute more than 70% to the GDP. Woolworths can operate in a profitable manner in the service sector of the country with the help of its effective services (Buettner and Kauder 2015).
Social factors – Germany is the biggest country in the European Union based on the population. The music, local architecture, sports and art is able to reflect the socio-cultural environment of the country. The ethno-cultural diversity which has been developed in the society of the country is able to affect the ways by which organizations operate. Woolworths will be able to operate in an effective manner with the support that is provided by the culture which has been developed in Germany (Tüselmann, Sinkovics and Pishchulov 2016).
Technological factors – Technology and national science is backed by Germany in many different ways. Germany also has many national laboratories and private research has been provided importance in the country. The technological position of Germany is also quite important in the European Union. The investment which has been made by the country in research and development has improved the technological environment. Woolworths and its operations will be effectively facilitated by the technological advancement which has been shown by the country.
Legal factors – The legal factors of the country are based on five branches which include, labour laws, ordinary laws, social laws, financial laws and administrative laws. The constitutional laws are mainly able to shape the legal system of the country. The legal issues and system of the country need to be considered by Woolworths in order to develop its policies effectively.
Environmental factors – The environmental factors of Germany are mainly based on the renewable resources which have been developed by the country in an effective manner. The country has also faced some major issues based on the environment related to different industries and the coal burning based activities as well (Leonidou et al. 2015).
The geo political environment which has been developed by Germany is based on its relationship with different countries that are a part of the European Union. Germany is considered to be an important part of the EU based association which has been formed between different countries. The trade agreements which have been made by the country will play a major part in the operations of Woolworths and its entry in the German market (Zander, McDougall-Covin and Rose 2015).
The trade based regulations followed in Germany are changed on a constant basis. The country is thereby considered to be an important part of the import and export based trade system which is followed in the European Union. The Common External Tariff is applicable to different countries which are a part of European Union. The trade tariffs of the country will be able to affect the revenues and prices of Woolworths (Brannen, Piekkari and Tietze 2017).
The major risks which can be faced by Woolworths in Germany are based on the lack of proper raw materials for the development of products that are offered to the customers.
The opportunities on the other hand are mainly provided to Woolworths based on the ways by which the company can take advantage of the technological environment and the high standards of living of the people (Leonidou et al. 2015).
Conclusion
The report can thereby be settled by asserting that the processes of Woolworths will be favourable in China rather than in Germany. The online operations of company have been started in China and the establishment of proper stores will also play a major part in the proper growth of the company in the Australian retail industry. Woolworths can thereby increase its revenues with the help of physical stores which can be developed by the company all over the country. This will play a major part in the expansion of operations of Woolworths in an effective way.
References
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