The company was founded in 1924 and the company has covered 80% of the Australian market. It has been analyzed that company also sell magazines, health and also beauty products. The company is currently conducting the activities in 1000 stores in Australia. It is a public company and also the industry related to retailing. The founder of the company is Percy Christmas, George creed and Stanley Chatterton. Headquarter of the company is situated in Bella Vista, New south Wales. The activities of the company are related with the supermarkets and liquor retailing. It has been seen that there are more than 20,000 employees who are conducting their routine activities in the support offices, stores and distribution centers.
The purpose of the report is to focus on the external and internal environment. The value of the SWOT analysis for the organization is related with analyzing the strength, weakness, opportunities and threats related with the company. By focusing on the SWOT Analysis it can be easy for the company to analyze the overall their position in the market. It helps to implement the activities in an effective manner so that the activities of the company can be conducted smoothly. By analyzing the current market it has been seen that company has achieved large market share of 37 percent in the Australian grocery market. The product line of the company focuses on the grocery items, dairy products and fresh vegetables. The company focuses on enhancing the overall satisfaction level of the customers by offering quality products and services.
PESTLE ANALYSIS
Political Factor
Woolworths is a largest company and it fulfills the needs of the customers by various retail outlets. The political scenario of the country is linked with the overall performance of the company. There is also political pressure in relation to the duopolistic nature of the retail market. It has been seen that there are many political rules and regulations that are followed by the company so that growth can be achieved easily. The company has various rules and policies that help the employees to take guidance to align the constitutional imperatives of the land. The company enjoys political stability which helps to achieve high level of profits in an effective manner (Grundy, 2017).
Economic factor
The economic factor like recession and higher employment give impact on the overall financial performance of the company and also it can lead to reduce in the overall sales. The financial situation of the company has been declined just because of the financial crisis. The financial crisis has given negative impact on the overall sales earned by the company. The retail sector in the Australia market has more stability if comparison is made with the other parts. These all factors focus on the economic performance of the company.
The economic factors are more favorable for the company as Australia has economically stable environment. If comparison is made with the other countries it has been seen that Australians focuses on maintaining the living standards. The gross domestic product of Australia was ranked on the 10th number. The regulations in the retail sector are for the new entrants and also the customers are spending less which is giving impact on the retailers (Kew and Stredwick, 2017).
Social factor
The company is facing issue with the suppliers and it has led to the change in the overall business culture. In the present scenario, the customer prefer the companies and the products who show more commitment towards the products that have green tag and organic. The company has become the trend setter in context to greener and good lifestyle. The company has focused on the sustainable strategies so that good and healthy environment can be created (Pickles, Barrientos and Knorringa, 2016).
Technological factor
In context to the technological factor it has been seen that new forms of technologies have enhanced the shopping experience of the consumers. Woolworth has also considered the integrated service oriented architecture in the activities and it support the technology and management in an effective manner. It is important for the retail sector to enhance their identity and consider the upcoming technologies so that good position can be achieved. The company has also considered the self-service checkout which has given negative impact on the large customers (Steenkamp, 2017).
Legal factor
It has been analyzed that the taxation policies and the recruitment and the engagement of the employees are considered as an important legal framework in the retail sector. It is important for the company to consider food licensing so that quality can be maintained. Woolworth also considers these policies related to food licensing. The plans are made in the company by focusing on the legal laws and rules regulations given by the company. The trading policies related to government have given impact on the retail industry in Australia. Favor is given to the supermarkets where consumer commission and also trade practicing act in Australia. Therefore, it can be stated that legal and regulatory factors are in favor in the development and increase the business.
Environmental factor
The factors related to environment have given impact on the sustainability of the business. The company policies related to environment has considered the step towards producing the organic products and also it helps in creating the good market position. The environmental factor is in favor of growth and development of the company in Australia. The company is investing in the resources so that carbon footprint can be reduced and also the waste of the natural resources can be reduced. The company is focusing on participating in recycling the activities to minimize the amount of wastage in the landfill which can help to recycle the material used at the time of processing in a proper manner. The practices related to sustainability consist of sourcing the items related to food in an ethical manner and it create a good image by being socially responsible and it supports the sustainability initiatives of the company.
SWOT ANALYSIS
Strength
The strength of the company is that it has a good image in the market. The company has achieved a large market share which has given success in the market. It is one of the well-known brands in Australia. The company has acquired the share of 39% in less time. There are many products and services offered by the customers and due to this the customers can easily avail the services from one place. This has given success to the company and also strong commitment to environment and sustainability has taken place. The company also offers variety of products in the Australian market which range in liquor petrol and also in insurance sector.
Weakness
It has been evaluated that the company has a low international presence and also lost the competitive advantage due to the high level of competition in the market. The drawback possessed by the company is that the company has taken late entry on the online retailing (Berman, 2015).
Opportunities
There are many opportunities for the company. It has been seen that company has achieved growth in the retail sector in 2014. Also there are better promotions given to win back the consumers. Woolworth can achieve success in the retailing sector in an effective manner. In the present scenario, the company has an opportunity to use social media. If the company uses social media then it can be easy to achieve success. Latest technology can help to focus on the competitive advantage in a proper manner. The company can attract the customers towards the outlet by giving discounts and promotions. When discounts and offers are given by the company then it can be easy to induce the customers or to attract them towards the products and services offered in the competitive environment (Azeem et al., 2018).
Threat
Due to the high level of competition it has been seen that the company has to face issue and threats. It has been seen that there are many companies who are offering same products in the market so it can lead to threat and also high competition to beat the other competitors in the market. A competitor like Aldi has expanded which has given threat to the other companies. In Australia it has been seen that here is low growth if the online retail. This is also the major issue which is faced by the company. The retail sector has a promising growth and after the recession in 2009 the retail sector has shown the sign of recovery. Food retail sector has expanded by 0.2% in 2015.
|
Strength · One of the biggest company · Well-known brand · Offer large number of products and services · Good commitment level towards the environment. |
Weakness · International presence is low · Lost competitive advantage because of high level of competition · Late focus on the online retailing |
|
Opportunities · Good promotions to attract customers · Increase in growth · Social media for involvement of customers · Large retail market |
Threats · Slow growth of the retail sector in Australia · Aldi’s expansion · High level of competition · Discounting competition with the competitors. |
Segmentation is a process of dividing the total market intro different group of people in the global market. No company can identify and evaluate the target market without segmenting its products into different group of people. The company should identify and evaluate the target market on the basis of four market segmentation that has been detailed below.
Demographic area: In this market segmentation, Woolworths focuses on the age, income level, gender, sex, religious and education level of the customers. It shall be noted that gender plays a significant role towards the inception and expansion of large number of retailing services and products in the market place. Along with this, segmentation shall be based on the age levels of people (Chron, 2018).
Geographic area: The Company focuses on the geographic area to identify and analyze the effective and unique target market. In this segmentation, the firm should focus on the weather, climate change, natural resources and pollution. These products help Woolworths to identify the potential target market in various countries (Rundle-Thiele, Dietrich and Kubacki, 2017).
Behavioral area: In this segment, the company divides its market into different groups of the basis their knowledge, occasion, usage rate, loyalty status, user status and buyer readiness. Woolworths also focuses on the behavior of the target market to attain competitive benefits in the international market (Arli et al, 2013).
Psychographic area: This type of segmentation pertains to personality and lifestyle traits. In this condition, products and services are dependent on the lifestyle and personality characteristics. By using this segmentation, Woolworths has been able to stand out against the competitors in the international market (Luiz, Bowen and Beswick, 2011).
After using the segmentation strategy the company can identify and evaluate the potential and effective target market. Woolworths can target its upper middle class households and working class population. Besides this, the company can target those people who are the age group between 6-17 years of age.
Along with this, it can also focus on the needs, requirements and expectations of the senior citizens to enhance and increase its revenue and profitability. By using segmentation strategy, Woolworths has been able to reach its target market in the competitive market. The target market is reflected by the high quantum of sales that has taken place in terms sales of the retail products followed and used by the home products and services. Along with this, the firm should use positioning strategy to increase and enhance the selling process of the firm.
|
Details |
Budgeted cost for implementing new services (AUD$ in million) |
|
Office equipment set up cost |
10 |
|
Hiring employees Employees salary= 2K* 13 employees=26K Hiring expenses = 10K Directors salary= 6k*2 =12K |
20 |
|
Administration expense |
30 |
|
Advertisement expenses |
20 |
|
Compliance expenses |
2 |
|
Cost for vendors contract |
2 |
|
Cost related with Drink licenses |
2 |
|
Land rent |
20 |
|
Escalations amount |
10 |
|
Total cost |
106 |
|
Description |
Details |
No of days |
Predecessor |
|
1 |
Finance arrangement |
2 |
|
|
2 |
Business value chain |
3 |
|
|
3 |
Employee hiring |
10 |
1 |
|
4 |
Appraisal of investment |
12 |
2 |
|
5 |
Sales plan |
20 |
4 |
|
6 |
Implementation of plan |
15 |
3 |
|
7 |
Sales team activities |
10 |
5 |
Recommendation of new products or services
On the basis of SWOT analysis, free delivery of products and services for the senior citizens has been initiated by Woolworth. So, the company has focused on senior citizens as a new target market. The senior citizens can order products and services by phone or via the internet. It has been observed that senior citizens are not able to visit store due to their personal and health issues. So, targeting senior citizens can help the company to increase it’s market share.
It can create customer value to the company by knowing what drives value to customers. Woolworth should consider the perspective of customers and understand what is important to the target market. It provides insights into the current and future customers ((Flint& Woodruff, 2015).
The customer’s value can be created by consistently working to improve customer satisfaction. The feedback survey on regular basis provides an opportunity to identify the brand in the marketplace (Flint& Woodruff, 2014). The tools like Survey Monkey. Kwik surveys and survey planet can be used to conduct a survey and collect feedback. The marketing models help in forecasting demand on the basis of market trends. The unforgettable customer experience like reviews and higher ratings are more likely to add value to the company.
Marketing Mix
Conclusion and Recommendation
By analyzing the report it has been concluded that the company is one of the largest company in the retail sector. It is recommended to provide a special category of products for the citizens like health and nutrition supplements. The customers are going to be convinced when they get such special attention from the company.
The company can create a unique category of products preventive to their health problems. Such products can provide an additional health benefit to customers. The company can establish products which are beneficial to fight diseases. This can help the company to achieve success.
References
Arli, V., Dylke, S., Burgess, R., Campus, R. and Soldo, E., 2013. Woolworths Australia and Walmart US: Best practices in supply chain collaboration. Journal of Economics, Business & Accountancy Ventura, 16(1).
Azeem, M.M., Baker, D., Villano, R.A., Mounter, S. and Griffith, G., 2018. Food shoppers’ share of wallet: A small city case in a changing competitive environment. Journal of Retailing and Consumer Services, 43, pp.119-130.
Berman, B., 2015. How to compete effectively against low-cost competitors. Business Horizons, 58(1), pp.87-97.
Bjorkquist, C., Ramsdal, H. and Ramsdal, K., 2015. User participation and stakeholder involvement in health care innovation–does it matter?. European Journal of Innovation Management, 18(1), pp.2-18.
Chron.2018. The four types of target marketing[Online], Available from https://smallbusiness.chron.com/four-types-target-marketing-30472.html, [Retrieved from 1st June 2018].
Flint, D.J. and Woodruff, R.B., 2014. Marketing’s service-dominant logic and customer value.In The Service-Dominant Logic of Marketing (pp. 201-213).Routledge.
Flint, D.J. and Woodruff, R.B., 2015. Issues in a grounded theory study of customer desired value change: Resolutions using phenomenology, ethnography and holistic transcript readings. In Proceedings of the 1997 Academy of Marketing Science (AMS) Annual Conference (pp. 134-139). Springer, Cham.
Giacalone, D., Wendin, K., Kremer, S., Frøst, M.B., Bredie, W.L., Olsson, V., Otto, M.H., Skjoldborg, S., Lindberg, U. and Risvik, E., 2016. Health and quality of life in an aging population–Food and beyond. Food quality and preference, 47, pp.166-170.v
Grundy, T.D., 2017. Dynamic Competitive Strategy: Turning Strategy Upside Down. Routledge.
Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context. Kogan Page Publishers.
Luiz, J., Bowen, A. and Beswick, C., 2011. Woolworths South Africa: making sustainability sustainable. Emerald Emerging Markets Case Studies, 1(1), pp.1-21.
Pickles, J., Barrientos, S. and Knorringa, P., 2016. New end markets, supermarket expansion and shifting social standards. Environment and Planning A, 48(7), pp.1284-1301.
Rundle-Thiele, S., Dietrich, T. and Kubacki, K., 2017. Why We Need Segmentation When Designing Social Marketing Programs. In Segmentation in Social Marketing (pp. 197-214). Springer, Singapore.
Steenkamp, J.B., 2017. Global Brand Strategy: World-wise Marketing in the Age of Branding. Springer.
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