Management And Business Context Of Woolworths

Overview of Woolworths

Describe about the Management and Business Context for Retail Company.

Woolworths operates as an effective supermarket retail company based in Australia that services the needs of customers related to grocery, fresh food and meat products and also non-food products.

Macro Environmental Analysis of Woolworths

The retail business of Woolworths is significantly affected by the government and regulatory policies concerning trading hours of the retail establishments, use of plastic and other recycled bags, pricing practices to be used and also the tax reforms generated in the region. Woolworths also generates potential income related to dividends and union dues to the different political parties (Leslie, 2009).

The global deflation in food prices had contributed in generating price deflations by 2.9 percent during the periods ranging 2012-13. The sales of liquor and supermarket products by Woolworths had increased by around 4.9 percent during the periods ranging 2011-12. Further, Woolworths through the opening of a large number of petrol stations gained an increase of sales by 11.4 percent (Niininen, 2012).

Woolworths focuses on conducting consumer oriented retailing through the generation of seasonal produces like fruits and vegetables. The seasonal food products are kept at controlled temperatures all along the year and also generated in an artificial manner for helping in meeting of consumer demands. 

Woolworths focuses on enhancing the effectiveness of its retail stores through the incorporation of Point-of-Sales (POS) systems and also the use of effective Enterprise Resource Planning (ERP) software, SAP. The use of SAP potentially contributes in tracking the movement of retail merchandises along the distribution and store outlets, the function of which is further enhanced based on integrating SAP with POS systems (Bryson, 2011).

Woolworths is observed to have faced a penalty amount of $3 million owing to the sales of faulty and unsafe private brand products that in turn affected potential customers. The judgment that was passed required the retailer to sell safe food products and also to withdraw and recall the faulty food products from the market (Cameron & Green, 2012). 

Woolworths focuses on the generation of carbon footprint that focuses on reducing the level of carbon emissions from its retail, distribution and logistics operations. The retail institution sets targets regarding reduction of emission levels of carbon and other greenhouses gases from its diverse units and functionaries (Collier, 2013).

Woolworths focuses on addressing the consumer power of its target customer groups through not only the generation of organic produces all along the year but also focusing on the development of the omnichannel platform for helping the consumers gain a seamless retailing experience. The retail company has teamed up with Genesys for developing an effective contact point with its retail consumer base (Garland, 2009).

Woolworths counters its supplier power through the sustaining of effective relationships with potential suppliers for the gaining of fresh and quality oriented produces and fresh products. The retail institution has set up an effective benchmark that contributes in evaluating the quality sourced from the different suppliers.

Woolworths based on the conducting of online trading focuses on generation of substitute products for the products demanded by the customers in cases where the ordered product is out-of-stock. The substitute products that are arranged by Woolworths are either of same or equal value (Gopalkrishnan, 2014).

Macro Environmental Analysis of Woolworths

Woolworths faces considerable competition from Coles and the discount retailer Aldi in the retail market of Australia. The intensification of the rivalry has required Woolworths for closing down around 17 outlets spread along the region.

The existence of faulty strategic planning initiatives has increased the level of threat for the domestic retailers from the large scale expansion activities of foreign retailers in the region (Rozkwitalska, 2012). The increased threat of entry of foreign players has required the traditional retailers to shut down their brick-and-mortar outlets and develop an online platform for helping in reaching a larger section of consumers (Jenner, 2011).

Application of the McKinsey’s 7S Framework on Woolworths

Woolworths focuses on generation of products at low price points to counter its rivals while also has developed an effective online presence for reaching its products to a large range of customers. Moreover, it focuses to operate based on a lean and customer oriented retail strategy (Bhatia & Kaur, 2014).

Woolworths operates on a simpler structure that conducts its business through establishment of large number of retail outlets across different petrol stations. Further, Woolworths also operates through a section of specialized employees that provide needed support to franchised retail outlets operating in different parts of international markets like South Africa (Kerzner, 2013).

Woolworths, in recent times has focused on the incorporation of different types of technological systems like Point-of-Sales (POS) and other inventory management and ERP based systems that contribute in effective management and flow of stocks across the distribution and retail outlets (Ongori & Nzonzo, 2011).

Woolworths focuses on generating the right quality and style of the food and non-food products. It also focuses on generating effective value to the customers. Woolworths generates increased importance in providing quality services to customers (Podsiadlowski et al., 2013). The retail institution also focuses on fostering creativity and innovation relating to the different types of retail services offered by it. It also aims in meeting the objectives of sustainability and promoting energy efficiency along its retail and distribution centres (Cameron & Green, 2012).

Woolworths generates continual training to promote skill development of its staffs involved both in retail operations and official duties.

The management style of Woolworths is evaluated to be autocratic and authoritarian in nature. It thus reduces the collaboration of middle and junior level managers in taking business decisions (Kapur, 2014).

Woolworths operates on a total of 19,000 staffs that are effectively allocated along the different retail stores, distribution centres and offices. The staffs provide needed services in sourcing quality products at affordable prices and also in servicing the emerging needs of customers (Jenner, 2011).

SWOT

Strength

Woolworths operates as a market leader in the grocery and food retail industry of Australia. It effectively conducts its retail business through synchronizing human and technological resources along with quality food and grocery products.

Weakness

Woolworths suffers owing to restricted or limited expansion to both regional and international markets.

Opportunities

The development of its omnichannel platform with also growing consumer demand related to online purchases of food and grocery products provides increased opportunities for Woolworths to develop its retail presence in the region.

Threats

Woolworths gains significant threat from its nearest competitor Coles operating in the Australian retail market. Moreover, the business of Woolworths also is increasingly governed by government interventions and regulatory paradigms.

The different types of risks confronting Woolworths are outlined as follows.

-Reduction in the pace of market growth

-Emergence of discount retailers in Australia

-Reduction in the level of staff morale related to the stores and distribution centres.

Risk Assessment Matrix

Reduction in Pace of Market Growth

	Rare	Unlikely	Possible	Likely	Almost Certain
Severe	Low	Low	High	Extreme	Extreme
Major	Low	Low	High	Extreme	Extreme
Moderate	Low	Low	Medium	High	High
Minor	Low	Low	Low	Low	Low
Minimal	Low	Low	Low	Low	Low

Emergence of Discount Retailers

	Rare	Unlikely	Possible	Likely	Almost Certain
Severe	Low	Low	High	Extreme	Extreme
Major	Low	Low	High	Extreme	Extreme
Moderate	Low	Low	Medium	High	High
Minor	Low	Low	Low	Low	Low
Minimal	Low	Low	Low	Low	Low

Reduction in level of Staff Morale

	Rare	Unlikely	Possible	Likely	Almost Certain
Severe	Low	Low	Medium	High	High
Major	Low	Low	Medium	High	High
Moderate	Low	Low	Medium	Medium	High
Minor	Low	Low	Low	Low	Low
Minimal	Low	Low	Low	Low	Low

Woolworths focuses on gaining revenue both from purchases made by customers and also through charges levied on suppliers. Further, supermarkets like Woolworths also focus on gaining on in cash margins based on selling large merchandise volumes (Olsen & Martins, 2012). It also focuses on generating effective customer services based on its operation conducted through retail, back office and distribution outlets (Kircher & Jain, 2013).

References

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Kerzner, H. R. (2013). Project Management Metrics, KPIs, and Dashboards: A Guide to Measuring and Monitoring Project Performance. United Kingdom: John Wiley and Sons.

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Leslie, B. ( 2009). Excellence in Advertising. Routledge.

Niininen, O. (2012). Marketing Principles. Cengage Learning.

Olsen, J. E., & Martins, L. L. (2012). Understanding organizational diversity management programs: A theoretical framework and directions for future research. Journal of Organizational Behavior , 33 (8), 1168-1187.

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Podsiadlowski, A., Gröschke, D., & Kogler, M. (2013). Managing a culturally diverse workforce: Diversity perspectives in organizations . International Journal of Intercultural Relations , 37, 159-175.

Rozkwitalska, M. (2012). Accepted and strong organisational culture in multinational corporations . Journal of Intercultural Management , 4 (3), 5-14.