Scenario Planning In Consulting And Change Management In Woolworths Supermarket

Trends and Uncertainties

Scenario planning in consulting and change management in Woolworths supermarket

Scenario planning has been around for decades, yet, recently it has been widely used by business leaders and analysts to understand the potential market scenario of a particular period in future. This study would identify three different scenarios for Woolworths supermarket in Australia, asses implications for one of them and reflect upon the process.

The extremely uncertain market environment of the current time makes it essential for the business leaders to consider diverse possibilities, when it comes to the future market environment, before development of the long-term business plans (Amer, Daim & Jetter, 2013 and Stewart, French & Rios, 2013). The scenario would be identified through the implementation of an amalgamation of the extreme-world method and the strategic management or the alternative futures scenarios (Ramírez & Selin, 2014 and Nanjundeswaraswamy & Swamy, 2014). The following table would systematically arrange all the information required for the application of the scenario plan:

Focus	Future investment, new market segment, product development, business expansion Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper
Time- 20 to 30 years
Trends relevant to Woolworths
Demographics	As of 2017, resident population is of 24.6 million people By 2027 and 2025, the population would increase by 1.4%. By 2038 the population of Australia is expected to grow into 35 million and 49.2 million by 2066 (Gomes, 2018 and Australian Bureau of Statistics, 2018)
Technological	Advancement of technologies like artificial intelligence An advanced version of “SMART CART,” which is still in its development stage in New Zealand based supermarket Foodstuff (Jacobs, 2018).
Economic	Economic growth is expected to continue by 2.5% until 2050 (Ross, 2013) Focus would be shifted from the primary and secondary industries to the service sector Ageing population might cause significant fiscal gap where the spending would exceed the revenue by approximately 2.75% of the GDP. This would make the deficit reach 20% of the GDP by 2050 (Ross, 2013)
Political	Settlement of a coherent environmental policy Trade based on agricultural goods might drop by 10-80% because of the drop in the output (Ross, 2013)
Cultural	Increasing affinity for organic food from smaller farms in the young consumer segment Shift from in-store purchase to online shopping In a recent report, 24% of the customers have accepted to shifting to online shopping and another 55% have shown willingness to do so (Gomes, 2018).
Agricultural	Hydroponic produce process Researches are going on or reducing timing of crop cycle for faster yielding Advancement of technology for monitoring crop growth Current researches are going on for improving aerial and satellite coverage of the crop fields through Uber-like system instead of drones which, if successfully done would cut the cost in farming and reduce uncertainty related to the loss of crop (The future of agriculture, n.d.). Due to drop of agricultural trade, production of sugar, wheat, beef and sheep is expected to drop by 14-20% (Ross, 2013).
Key uncertainties
Government regulations of the industry and international trade might be altered Success of the new technology Competition from domestic and international brands Change in the country’s economy Political unrest due to economic downfall as projected above

Table 1: Trends and uncertainties

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Currently, Woolworths is the market leader in the grocery retail industry with 36.8% market share yet the constantly falling price poses a significant threat of loss for not just the organization but also the entire industry.  Price of an average grocery basket in Australia has fallen by 5.1% in the two leading supermarkets of Australia, Woolworths and Coles after the entry of German supermarket chain Aldi in the market. This is expected to eliminate 1.4% of companies from the competition by 2022 (Gomes, 2018). While this appears to be a positive consequence for the business of Woolworths, when this tallied with the content of the table, it can be observed that attitude of the consumers towards online shopping and organic farms has increased significantly which might grow further in the upcoming 20 to 30 years turning the direction of traffic towards smaller companies.

The economic and political trends discussed in the table pose significant threat to the business of Woolworths. The shift of the focus to the serviced sector along with reduced political and trade relationship with other countries would negatively influence its business. On the other hand, increased production of farming products would affect the demand of supply ratio causing fall in price and hence downfall in the business.

Based on the information discussed above and applying the extreme world method of scenario planning two extreme world scenarios would be developed, one positive and one negative, that is presented in the following table. However, a third scenario is developed applying the strategic management method of scenario development, which allows to permutated the content of the extreme scenarios. It is also provided in the table:

Name	Scenario in 20 to 30 years
Scenario 1 (Negative)	The company faces reduced average purchase-ability of customers due to increased population and financial deficit. Political unrest due to economic issues and poor trade relations with neighboring countries limit the chances of export. Extreme increase in crop harvesting reduces the price and increased competition in domestic and international market and the government develops stricter environmental policy increasing the companies like Woolworths to rethink their environmental policy.
Scenario 2 (Positive)	Increase in the population offers larger target market while the economic growth and improved trade relations with neighboring countries improve the business prospect. Good crop yielding provides better chance for reducing product price to attract more customers and to export them in other countries for better international presence. More lenient trade policy simplifies the process of international business and the organization’s hydroponic farming procedure attracts customers preferring organic and healthy food. Successful invention of advanced version of the “SMART CART” adds to the efficiency of operation and consumer experience.
Scenario 3 (Permutated scenario)	Economic deficit and faster population growth generating larger target market with limited purchase ability. Reduced purchase-ability makes consumers less interested in expensive organic food limiting the profitability of hydroponic farming procedure of the company. Advancement of artificial intelligence technology and satellite coverage of crop field reduces staff requirement and improves crop production respectively. Stricter trade and environment policy increase operational and trade complexity.

Scenarios for Woolworths Supermarket

Table 2: Scenarios for Woolworths supermarket

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Evaluation of all three scenarios presented in the earlier table provides the understanding that each of the scenarios needs careful consideration for developing and modifying the existing policies, processes and strategies as per the future requirements. Therefore, this section nominates one of the scenarios presented above for further consideration. Scenario 3, that is, the scenario that has been developed through amalgamation of some of the trends and uncertainties are taken from both the positive and negative scenarios. As this study concerns the potential scenario for the business of Woolworths which belongs to the supermarket industry, aspects like artificial intelligence for enhancement of customer experience are crucial factors of future scenario that need consideration. On the other hand, as the company avails grocery products and operates in both the local and the international market, therefore, evaluation of the effect of any change in the government policy related to environment and international trade is essential.

Moreover, as has been discussed in the previous section, the organization and its greatest competitor in the Australian market, Coles lowered their prices considerably to eliminate the threat of losing customers to the German chain of supermarket Aldi, which consequentially eliminated a large number of smaller competitions. Therefore, consideration of the manner in which the organization addresses the issue of low purchase-ability of the customers to yield profit from the large customer base that population growth might provide or evaluation of the implications of this scenario is essential.

As has been discussed on the earlier sections, the scenario chosen for understanding the aspects of change management in this study is the third scenario listed in table 2, which is the permutated scenario, understanding the implications of the scenario is essential. During the discussion and evaluation of the implications, McKinsey’s change model has been used for finding and planning the change opportunities (Channon, & Caldart, 2015, Shaqrah, 2018 and Lewis, Cantore & Passmore, 2016).

Implication 1: Loss of customers

Due to the reduced ability of purchase, a large number of customers might opt for cheaper alternatives to the organizational products posing the threat of consumer loss. To address this issue the organization can either directly reduce the price of the product as it did to resist the loss of customer to Aldi during its entry in the Australian market or it can provide discounts and loyalty schemes to its loyal customs. For the sake of this study, reducing price has been identified as the chosen strategy.  

Challenges
Change management challenges	Receiving approval from the decision makers Maintaining profit even after reducing the price Resistance from the investors Maintaining lower price than the competitors Consumer assuming quality downfall due to price deduction
Change leadership challenges	Resistance from team Conveying the message properly Ensuring that every member of the organization associated with the change shares the knowledge required
Opportunities
Strategy	The product would be priced in a manner that it appears less expensive than the options available in the market of its quality yet do not appear to be of cheap quality.
Structure	This would need assistance from the marketing team and the strategic planning team.
System	Planning of the change process Change the pricing strategy for the products Development of marketing message to reach customers In store sales promotion
Shared value	As retention of the customers would be the priority the investors, employees and the management team would share the same goal of acquiring and retaining the reference of the market of the following 20 to 30 years.
Style	Transformational leadership style would be followed in this case (Iqbal, Anwar & Haider, 2015 and Asrar-ul-Haq & Kuchinke, 2016)
Staff	The staff associated with the change would be the pricing and marketing team members and the packaging team of the products.
Skills	Price development skills along with the change management skills would be needed for this change.

Evaluation of Scenarios

Table 3: Implication 1

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Implication 2: Hydroponic procedure becoming irrelevant

Due to the reduced purchase-ability of a major part of the consumer group the customers might find the organic products or the one developed through organic farming or hydroponic farming procedure too expensive enabling them to withdraw from such choices. This poses a significant threat for the organization in terms of this line of their product becoming irrelevant in the following 20 to 30 years. One of major dilemma that it can pose is whether to retain the products and attempt to regain the consumer preference or eliminate them from the product portfolio, which might dissatisfy a small segment of the market still having preference towards it. This triggers the need for change and hence a sound process of change management and change leadership. The following table provides details of the challenges and opportunities associated with the implication:

Challenges
Change management challenges	Delay in receiving approval from the organizational decision makers Coordinating the operational changes with the marketing and financial changes Resistance from the key players Strategies implemented by competitors
Change leadership challenges	Resistance from the investors and board Resistance from the customers Protecting the team that might lose their employment due to the change
Opportunities
Strategy	As the flagship stole of Woolworths in Sidney already possesses hydroponic fresh food section, removing it might cause significant financial loss for the organization and dissatisfy the market segment that would still prefer the product. Instead of removing the product from its portfolio, the organization might reduce its price or provide the customers with a more persona purchase experience.
Structure	This might need assistance from both the operational and marketing team as the lowered price or the new shopping experience offered by the organization need to be advertised. The in-store sales team needs to assist the customers during the purchase process.
System	The in-store activities need to be planned Staffs need to be communicated about the details of the plan Marketing teams need to develop advertisements Customers during their shopping experience need to be sales promoted by the in-store staff
Shared value	While this allows the organization to protect itself from the loss of a set of products from its portfolio, it also ensures that the staffs responsible for the hydroponic food section retain their employment. Finally, it also helps in retaining the customers who preferred the product.
Style	The preferred style of leadership for implementation of the plan would be transformational (Anderson & Sun, 2017).
Staff	Proper instructions and training is to be given to the staffs for successful implementation of the plan.
Skills	The ground staff needs to have good communication skills while the marketing team needs to have a clear understanding of the objectives and the target audience.

Table 4: Implication 2

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Implication 3: Legal obligation for not adhering to new environment policies

If the government introduces stricter environment policies and if the consumers perceive the organizational activities to be adequate and failing to meet the environmental policy then it might face consumer’s negative perception. To ensure that this issue does not hamper its business the organization might need to shift to more sustainable energy options. For instance, the organization might opt for sustainable energy resources for 10% of its energy consumption at the beginning.

Challenges
Change management challenge	Cost of the change Permission from the investors and shareholders Changing the existing energy consumption plan (Doppelt, 2017 and Cameron & Green, 2015) Ensuring adherence to sustainable consumption policies Altering organization’s environmental policies
Change leadership challenge	Educating the staff Responsibility allocation (Hayes, 2018) Developing a plan that causes least financial loss Managing the change process so that it finishes without any hindrance
Opportunities
Strategy	Remodeling some of the organizational sections for making them compatible with the implementation of sustainable energy option
Structure	This might need assistance from external entities that avail sustainable energy as an alternative option.
System	Planning the change Involving the relevant teams Educating the staff members about the need for the change Implementation through both internal and external entities associated with the change Informing the consumers through marketing activities
Shared value	While this would satisfy both the government and the consumers of the organization it would also contribute to the environmental sustainability.
Style	Transformation leadership style would be used (Anderson & Sun, 2017)
Staff	Engineering and technical departments need to be involved in this change process
Skills	Skills required for this change involves decision-making skills and also the technical knowledge to choose from the energy options, to make technological choices and to supervise the entire process of change.

Table 5: Implication 3

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Completion of this study has allowed me to understand the implication of the uncertainty that the current market environment poses to the business organizations and the manager in which organizational leaders through assuming different scenarios and developing plans for each of them immune the company from the threat that such uncertainty offers. The future scenario that has been selected for the further evaluation has the same plausibility as the other two identified in the table 2 as they were developed based on the market forecasts generated after detailed evaluation and observation of the Australian business environment. It made me identify the manner in which a market trend can offer several implications. In addition, the change plan offered in response to the identified implication provided the understanding importance of adapting to the changing market environment and observing the potential need for change to remain relevant in the market and the industry.

Implications of Permutated Scenario

Conclusion

Completion of this study has enlightened about the need for scenario planning for business organizations to retain preference of the consumers and their position in the market. It has also availed a deep insight into the manner in which scenario planning is conducted and responses are planned according to the identified implications of the observed scenarios.

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