Woolworths Limited Strategic Implementation

External Analysis of Woolworths

Discuss About The Woolworths Limited Strategic Implementation?

Woolworths Limited in the year 1931 opened its door to the public in the Cape Town of Australia. The founder of Woolworths Limited is Max Sonnenberg. The Company is having an extensive interest in retail throughout the countries such as Australia and New Zealand. It is regarded as the second largest company in Australia in terms of revenue after the retail based market Conglomerate West Farmers. The main operations of the company incorporate supermarkets (Woolworthsgroup.com., 2017) The important stakeholders and players of the Woolworths Limited are employees, customers, shareholders, suppliers, government, franchisee, unions, media organized business, interest groups and community groups and other non- governmental organizations. The recent changes in the Woolworths organization are the private changes in label, which is a response to the popularity of Aldi where the company is struggling with the decreasing growth of sales. The recent performance of Woolsworth is to catch up with Coles with its turnaround plan where the supermarket is trying to close the gap with the Coles supermarket in the financial year of the first three months. It has maintained its trading performance till now and continue to rise in future (Woolworthsgroup.com., 2017)

Political: Woolworths is an important organization, which is fulfilling the demands of the customers through the different outlets of retail (Gupta, 2013). The country’s political environment is associated with the organization’s performance and the retail based companies which are affected out of the political climate. The political conditions in the country shapes the environment of the business which is providing the organization with a better growth opportunities The political disturbances also discourage the investors and business from entering the market. Since the functioning of the company is more or less stable, it would reduce the risk of the business (Woolworthsgroup.com., 2017; Koumparoulis, 2013).

Economic: The economical factors such as recession and unemployment at a higher rate has a stronger effect on the financial performance of the entity of business as both the above mentioned factors would lead to the growth of lower sales which is finally causing the decline in the financial level. A decline in the economic condition has been pointed out due to the crisis in the global finance, which also lead to close its operations in United Kingdom. For instance, the retail industry of Australia maintained in the other parts of the world, continuing its operations despite it suffered a setback in the market of United Kingdom (Woolworthsgroup.com., 2017; Gupta, 2013).

Porter’s five forces

Social: Customers are regarded as the important source of revenue for the entity of business. Thus the needs’ identification of the targeted market and a plan’s development focuses on the accomplishments of those who needs are essential for the profitability based on sustainability. The company is also looking forward to indicate the shift towards healthy eating, other than offering lowest price on the different types of item.

Technological: In terms of the factors of technology, the newer types of technology such as increasing the experience of shopping of the buyers, which comprise of the core area for the retail organizations. The usage of RFID has been the important part of the retail stores, which renders help to the inventory’s management by keeping the availability of stock in the visitors of stores. The company has also taken the service oriented architecture to run its operations, which is focusing on the support to technology while supplying the different items across the outlets of the retail stores (Woolworthsgroup.com., 2017; Gupta, 2013).

Bargaining powers of suppliers: As the Porter’s five forces stated that if there are higher numbers of suppliers, stronger the suppliers are. Therefore, to take into account the business of Woolworths particularly the Safeway super markets, whose dependence is low on the suppliers, which means the supplier’s bargaining power is weak. The main reason behind this is that about the amount of marketing share of the retailing in both New Zealand and Australia (Woolworthsgroup.com., 2017; Dobbs, 2014).

Customer’s bargaining power: The maximum customers of Woolworths are the buyers who are individual but have strong power of bargaining and that is why the low priced products is one of the important strategies of the company.

New Retailer’s threats: The threats of new entrants are significant due to a number of reasons. Firstly, setting up stores and providing excellent quality, bringing the supermarket in competition with Coles. Moreover, Woolworths and its competitors are the key players who have access to the different types of distribution channels in the retailing industries (Dobbs, 2014).

Threat of substitution: The substitute products are available in all the supermarkets of Australia. Therefore, the supermarket must come up with new competitive and innovative strategies in order to attract the customers and building the reputation of building the brand.

Rivalry among competitors: The presence of the strong competitors in the retail stores of Australia and the grocery industries are trying to limit the market share of Woolworths and to the higher level of concentration (Dobbs, 2014)

Opportunities based on three essential external factors

• In terms of politics, there is a political stability in the country Australia, therefore, the country can do its business properly without any external political problems and can further dig out the opportunities for further expansion (Woolworthsgroup.com., 2017).
• In terms of technology, the future of the organization can be reshaped through the presence of computerization, which would lead to the development of technology and manufacturing industries and the lifestyle changes of the customers. This in future would develop the country’s economy at a higher pace.
• As Woolworth is increasing its shift to the healthier food, as discussed in the PEST analysis, the fresh food future program would provide an opportunity for the new farming sustainability and productivity for a longer period of time (Woolworthsgroup.com., 2017; Hollenson, 2015).

Woolworth’s organization is not able to counteract the competition from the list of discounters, killer of category and specialists; they lacked a range of capabilities and understandings of the structure of market that they are capable of challenging them once the supermarket becomes an established one (Drucker, 2017). However, there are several core competencies some of which are regarded as historic and others are adapted over the times by utilizing promotional strategies, offerings of products and prices. Woolworths adapted different product, prices and technologies. The organization has been using the strategy of low price system, which is regarded as the core competency of the firm. Another important success factors are the channels of distribution. It is regarded as one of the important chain distributors in the United Kingdom (Drucker, 2017).

The resources that Woolworths company is having are the

• Retail Management Resources which includes Profit centre of Retailer’s, online financial training of the retail and the owners institute of the retail.
• Operation resources include the online digital retail and the foundation based on loss prevention (Menther, Hamann & Nilsson, 2015).
• Information for the Growth management of retail stores which includes customer services, fixtures of stores, locations about stores, retail personnel store’s security system and the software for stores based on accounting (Woolworthsgroup.com., 2017).

• Most of the business of Woolworths have presented about the past few years with the growth of the sales. On the basis of the resources, the company has the ability for capital generation and in this case, the firm has the plan to expand their market by opening more stores and updating facilities (Menther, Hamann & Nilsson, 2015).
• The organization developed a long-term relationship with the suppliers and producers. The organization developed a charter on fair trade, which encapsulates the key principles of the business relationship with retailers.
• The success of the organization was the channels of distributions.

The strategy of the company is to develop a team, reducing the processing of the costs improvements, Developing the brand based on cohesive, making the stores refreshed and updating the offerings of product (Woolworthsgroup.com., 2017; Shore et al., 2017)

The main strategy of the company is to keep the customers in the first position and accordingly they are looking forward to develop a team who can cooperate with each other and making the brand of the store famous by serving the consumers. In order to update their offerings they work on the innovations such as fresh sushi bars and serving fresh meat and fish to the consumers daily (Woolworthsgroup.com., 2017). Through these activities, they want to make their brand cohesive so that the customers are attracted to the products of the supermarkets.

Woolworths organization implement its strategy by involving themselves by creating a link with their suppliers and the firm focuses on less cute of price and more on the strategies in order to grow their sales of firm. In the future, they would implement strategy through the better use of the data analytics also looking forward to invest bigger data and the implementation of the strategic plan of four points (Woolworthsgroup.com., 2017).

• Proliferation of product: Broadening the target market of Woolworths by entering the pharmaceutical market and continuing the process of unrelated diversification is another recommendation (Johnson et al., 2013).
• Development based on people: The supermarket must recruit people who can give good quality services. The company must manage the people accordingly.
• Culture based on cost leadership should be integrated as a form of strategy to deliver goods and services, which would manage the products of supply chain and for that, the firm, must use the program of stock replenishment (Woolworthsgroup.com., 2017).

To improve their economy more and to compete with their existing competitor, the market can look forward to offer discounts on the products on special occasions, which would increase the buying nature of the consumers.

Conclusion

Therefore, to conclude it can be stated that Woolworths follow a particular strategy and it was judged on the basis of different strategic formulations. In order to bring improvements on the business, the company must work harder to gain its competitive advantage to gain back its reputation in the market place.

References

Drucker, P. F. (2017). The Theory of the Business (Harvard Business Review Classics). Harvard Business Press.

Dobbs, M. (2014). Guidelines for applying Porter’s five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), 32-45.

Gupta, A. (2013). Environmental and pest analysis: An approach to external business environment. Merit Research Journal of Art, Social Science and Humanities, 1(2), 13-17.

Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.

Johnson, G., Whittington, R., Scholes, K., Angwin, D., & Regnér, P. (2013). Exploring strategy text & cases (Vol. 10). Pearson.

Koumparoulis, D. N. (2013). PEST Analysis: The case of E-shop. International Journal of Economy, Management and Social Sciences, 2(2), 31-36.

Methner, N., Hamann, R., & Nilsson, W. (2015). The Evolution of a Sustainability Leader: The Development of Strategic and Boundary Spanning Organizational Innovation Capabilities in Woolworths. In The Business of Social and Environmental Innovation (pp. 87-104). Springer International Publishing.

Shore, A. D., Morton, A. G., Addison, A. F., Investments, A., Hahn, J., Read, A. G., … & Waterhouse,(2017) M. AGM reports published on the ASA website.

Woolworthsgroup.com. (2017). Woolworths Group: Quality Brands and Trusted Retailing. Woolworthsgroup.com.au. Retrieved 21 September 2017, from https://www.woolworthsgroup.com.au/