Strategic Analysis And Information System Solution For Woolworths Limited

Background of Woolworths Limited

Strategic analysis is considered to be the method of performing research on any organization followed by its operational environment for formulating any kind of business strategy. On the other hand, it can be seen that the information system is regarded as the collective human and technical resources which results in providing the storage, distribution, computing, and communication of the necessary information that is needed by any organization.

Primarily, the research concentrates on identifying the background, industry, and environmental analysis of Woolworths Limited. The discussion then continues with the industry environment, competitive environment, opportunities and threats of Woolworths Limited. The second part of the report concentrates on the research related to the resources available and identification of capabilities for Woolworths Limited.

The research then focuses on the analysis of the core competencies of Woolworths Limited followed by a proposal for a suitable information system solution which can fulfill the requirements of Woolworths Limited. The discussion continues with the evaluation of the proposed system as well as providing the recommendations for the chosen organization. Finally, the report ends with a conclusion that includes all the crucial points present in the report.

2.0 Part 1

2.1 Background of Woolworths Limited

According to the research, it has been identified that Woolworths Limited is a very well known Australian organization and they have an interest in the retail industry across the regions of Asia Pacific. Woolworths Limited is known to be the largest retailer of food in New Zealand and Australia followed by that they are known to be the largest poker machine, hotel operator, and famous retailer of takeaway liquor in Australia (Humayun 2016).

During the research, it has been identified that the largest employers of the Asia-Pacific region are known to be Woolworths Limited as the organization has members of 200,000 employees who are working in the retail stores, distribution centers, and offices across various regions of Australia and New Zealand. Woolworths Limited is found to possess the biggest supermarket chain across the whole of Australia and was established in the year 1924.

2.2 Description of the industry of Woolworths Limited

Woolworths Limited is known to be operating in the retail food industry across various regions of Australia and New Zealand. In the past 50 years, it has been noticed that with the increase in population across Australia several shopping complexes have been developed for fulfilling the requirements of many customers. There have been several open-air shopping complexes present in Australia due to the fine weather in those regions.

Description of the industry of Woolworths Limited

In the research, it has been analyzed that the evolution of the supermarkets has resulted in bringing several kinds of positive impacts on the retail market of Australia (Bayne, Schepis, and Purchase, 2017).  With the enhancement of the supermarket retailing it can be seen that Woolworths Limited started concentrating on their strategic analysis for becoming the largest retailers of Asia-Pacific regions. The enhancement in the retail sector of Australia has led to making the industry more strategic and flexible for coping up with the challenges related to the macro and micro-economic environment.

2.3 Environmental analysis of Woolworths Limited

Woolworths Limited is known to be the organization that has a strong belief and ethics related to the culture of hard working. The organization is much concerned about their environmental analysis that is followed by their marketing management. The main focus of Woolworths Limited is to enhance their customer base with the changing business strategies. In the research, it has been identified that the external environmental analysis is quite crucial for developing the business strategies in an effective manner (Govender 2017).

The developed strategies need to be responsive in relation to the external business environment. In this report, we are going to analyze the overall external environment related to the Australian retail market within which the chosen organization is operating. The macro environmental factors related  to Woolworths Limited are as follows:

1. Economic environment: The uncertainty in the development of the Australian economy has led to an increase in threat for all the retail participants since the development may remain stagnant due to the prevailing of the similar situation. Other important concerns which the participants in the retail industry need to consider includes a rise in the wages and fuel prices followed by an increase in the unemployment rate.
2. Physical environment: The physical factors are considered to be the geographical factors which include climatic and weather conditions that result in influencing the retail market in Australia (Devin and Richards, 2018).
3. Socio-cultural environment: The modification in the social aspects, lifestyles, and attitudes has led to a dramatic shifting in the Australian supermarket. Presently, it can be seen that the people are becoming very much conscious about obesity and their health conditions. For that reason, there has been a requirement for the low-fat foods, GM-free food products, organic, and easy to prepare foods. In the recent times, it can also be seen that the involvement of the women in the retail food market is also increasing.
4. Global environment: It can be seen that Woolworths Limited has managed to enhance their business operations in India and New Zealand for sustaining their growth in the retail market in addition with the capitalization of their marketing strengths (Meredith et al. 2016).
5. Technological environment: Woolworths Limited has managed to adopt innovative technologies and became the first crucial retailer who managed to subscribe GEMMnet in the year 1994. The organization has also made an investment in improving their distribution system and supply chain that mainly focused on the cost savings.
6. Legal or political environment: In the research, it has been found that the government plays a crucial role for bringing impact on the supermarket industry in addition to the implementation of regulatory functions and monitoring actions by Australian Competition and consumer commissions (Meredith et al. 2016).
7. Demographic environment: According to a survey it has been found that in the year 2008 there have been 21 million people present in the Australian population which included a mixture of religious and ethnic groups (March, Nguyen, and Piro, 2015). It has been estimated that there is going to be a hike of 25% in Australian population by the year 2051 and research have found that the people of 85+ year’s age group are experiencing the increase in the growth rate.

2.4 Description of the industry environment of Woolworths Limited

According to Porter’s five forces analysis, it is evident that the five forces result in helping the organization for understanding about the overall structure of their industry. Porter’s five forces analysis of Woolworths Limited are as follows:

1. Bargaining power of the suppliers: There has been a variety in the bargaining power of suppliers in the Australian supermarket retailing industry based on the size of the supermarket followed by the brand name of the suppliers. Coca-Cola and British American Tobacco are two suppliers who posses to have a stronghold within the supermarket industry (Yunna and Yisheng, 2014). The researchers have analyzed that the bargaining power of the suppliers in the Australian retail market is from high to moderate.
2. Bargaining power of the buyers: It can be seen that the Australian supermarket results in offering homogenous products that consist of lower switching amounts between two stores and allowed the buyers with much higher bargaining power.
3. Potential threats of new entrants: The Australian retail shops as well as the supermarket industry results in offering low prices for the new entrants and is considered to be an unattractive industry due to the lower profit potential (Kupka and Thomas, 2014). Thus, it has been found that the barrier while entering into the supermarket industry is moderate in nature.
4. Substitutes in the industry: There has been a number of substitutes in the supermarket industry which includes pharmacies, grocery stores, online stores, fresh food markets, and convenience stores. For that reason, it can be said that the availability of substitutes within the supermarket retail industry is from moderate to high.
5. Rivalry among the competitors: The research has found that the rivalry among the competitors within the supermarket industry is quite intense in nature.

2.5 Description of the competitive environment of Woolworths Limited

During the research, it has been found that it is essential to take account of a particular strategic group for enhancing the competitive skills of Woolworths Limited. Based on Porter’s five forces analysis it has been found that the industry of supermarket has resulted in presenting high to high attractiveness for the Woolworths Limited (Santos et al. 2015). Thus, it has been found that the profitability is going to be higher for Woolworths Limited with respect to time.

The research has also found that the profitability of Woolworths Limited is going to decrease from the higher rate to moderate rate in the future because of the enhancement in the bargaining power of buyers and suppliers (Berning 2014). There is also going to be a greater intensity of the organizational rivalry with the expansion of Aldi followed by the entry of Costco.

Environmental analysis of Woolworths Limited

2.6 Opportunities and threats of Woolworths Limited

The opportunities for Woolworths Limited are as follows:

1. Woolworths Limited has the potential for enhancing the overall customer base followed by the enhancement of the market share.
2. There has been a developmental opportunity in the food sector with the enhancement of diversity and increased population (Culley et al. 2017).
3. The new selling opportunities can be enhanced in addition to the cutting costs after the utilization of ICT.

The lists of threats for Woolworths Limited are as follows:

1. There has been an uncertainty and slower growth rate for the Australian economy with the increase in unemployment and recession.
2. The enhancement in the alcohol-oriented diseases followed by the continuous pressure from the government is going to hamper the business processes for Woolworths Limited.
3. One of the major threat for Woolworths Limited is the increase in the dominating power of the suppliers (Bohari, Hin, and Fuad, 2017).

3.0 Part 2

3.1 Resources available for Woolworths Limited

In the research, it has been identified that by the end of the year 2010, Woolworths Limited is going to perform their business operations in around 3, 100 stores in overall New Zealand and Australia by employing approximately 1,85,000 people. With the analysis of the research, it has been clearly identified that the tangible and intangible resources of Woolworths Limited are quite stronger. The organization is also capable of effective human resources and management abilities, has a strong brand image in addition to effective product innovation skills. Woolworths Limited is also well-known for maintaining a positive reputation for fresh food and incapable of better alliance management (Bayne, Schepis, and Purchase, 2017). Finally, it has been noticed that Woolworths Limited has managed to maintain a strong relationship with their overall business processes.

3.2 Identification of capabilities of Woolworths Limited

During the research, it has been found that capabilities are regarded as the skills of an organization which involves coordination of the resources for any kind productive purpose. It has been noticed that the organization is running their business processes in a successful manner since the year 1924 and for that reason it can be said that Woolworths Limited is quite capable of choosing the person for working and the organization also have the idea about setting their resources in a fixed manner (Bayne, Schepis, and Purchase, 2017).

3.3 Analysis of core competencies of Woolworths Limited

The analysis of the core competencies for Woolworths Limited is as follows:

1. Marketing and branding: Woolworths Limited have managed to enhance their position by introducing a slogan in their several stores as “The fresh food for people”. It resulted in creating a diversified image of the healthy and quality product for the customers in a reasonable amount (Bowles, Harris and Wilson, 2016).
2. World-class supply chain: The competitive advantage, as well as innovation of Woolworths, have developed due to the supply chain and the organization cost cutting followed by the efficiency to manage the unnecessary expenses.
3. Integration: Woolworths Limited has managed to integrate a few of their suppliers with the production of their personal inputs for enhancing the market power thereby replying to the trend of the private level.
4. Innovation: The organization has tried to implement various kinds of projects that include “new idea program” and “refresh” for carrying out the business of petrol retailing (Jie and Gengatharen, 2018).

3.4 Proposal for a suitable information system solution which can fulfill the requirements of Woolworths Limited

According to the research it has been found that a suitable information system is much required for Woolworths Limited to carry out the business operations of the organization in an effective manner (Laudon and Laudon, 2016). The information system solution is needed for Woolworths Limited in order to forecast the requirements and necessities of the organization with respect to present usage hereby keeping in mind about the future changes in the requirements.

The information system solution was chosen for Woolworths Limited need to have a larger database for storing huge amount of data in the future (Horita et al. 2015). The types of an information system that can be implemented in any organization include decision support system (DSS), executive support system (ESS), transaction processing system (TPS), and management information system (MIS). The most suitable information system solution for Woolworths Limited is a decision support system (DSS) (Cabrerizo et al. 2015).

Description of the industry environment of Woolworths Limited

3.5 Evaluation of the proposed system as well as providing the recommendations for the chosen organization

The proposed system for Woolworths Limited is a decision support system that can be implemented within the organization. The decision support system is going to fulfill the requirement of the management level for Woolworths Limited and it concentrates on providing the managers with best solutions for making decisions which are unique, semi-structured, and can be modified easily in future (Wright et al. 2016). It is recommended for Woolworths Limited to implement the decision support system for describing any kind of business applications related to the organization. The implementation of a decision support system can result in enhancing the ability of the managers of Woolworths Limited to make better decisions in the future (Noorollahi, Yousefi and Mohammadi, 2016).

4.0 Conclusion

After the analysis of the report, it can be concluded that both the external and internal environmental analysis is performed with appropriate outcomes. The threats and opportunities of Woolworths Limited have identified appropriately. The organization is also capable of effective human resources and management abilities, has a strong brand image in addition to effective product innovation skills. The most suitable information system solution for Woolworths Limited is a decision support system (DSS) which has been identified in the research.

5.0 References

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Bayne, L., Schepis, D. and Purchase, S., 2017. A framework for understanding strategic network performance: Exploring efficiency and effectiveness at the network level. Industrial Marketing Management, 67, pp.134-147.

Berning, A., 2014. Sustainable supply chain engagement in a retail environment: the case of Woolworths food suppliers(Doctoral dissertation, Stellenbosch: Stellenbosch University).

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Govender, S., 2017. How social media can be used to engage and interact with consumers in the retail industry: an analysis on Woolworths’ online strategies (Doctoral dissertation, The IIE).

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Humayun, S.H., 2016. Merchandising operation of Woolworths Global Sourcing.

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