Analysis of Woolworths Limited

This presentation provides a strategic review of Woolworths Limited, one of the largest retailers in Australia. It includes an analysis of the external and internal environment, competitive advantages, and diagnosis of the company. The presentation also discusses the challenges and opportunities in the retail industry in Australia.

Analysis of
Woolworths limited

 Introduction
 Overview of Woolworths
 Analysis of external environment
 Analysis of internal environment
 Competitive advantages of Woolworth
 Diagnosis of the company
 Conclusion
 References
Table of Contents

 In the following slides a strategic review of an Australian
organization is performed
 The review of both internal and external environment has been
performed
 This has led to the identification of certain competitive
advantages
 Diagnosis of the strengths and weakness of the competitive
advantages is undertaken
 The long term sustainability of the competitive advantages is also
determined
Introduction

 Woolworths group was found in 1924 and is one of the largest
retailers in Australia
 The company operates 32402 stores across Australia and has
some of the most recognized brands (Woolworths, 2018)
 The company serves around 29 million customers in a week
 Woolworths is a committed business partner to thousands of
manufacturers, farmers and producers
 Some of its top brands are Big W, BWS, Woolworths, Dan Murphy’s
etc.
Overview

Overview

Overview

Analysis of External
environment
 PESTEL Analysis of Australia
Political-
 Parliamentary democracy operational under a constitutional
monarchy.
 Queen of Australia is Elizabeth 2
 Safe and stable political environment.
 Criticized over deportation laws, treatment of refugees, rights of
indigenous people etc (Cody and Nawaz, 2017).
Economic-
 1.248 trillion GDP at purchasing power parity makes it 19th largest
economy
 Follows an open market economy
 Member of G20, OPEC and WTO
 Has free trade agreements with Thailand, Korea, Japan, US, Malaysia
etc.

Analysis of External
environment
 PESTEL Analysis of Australia
Social-
 Australia has a aging population
 Australia has a small population size and low population growth
rate
 The life expectancy is large
 5.3% of country’s GDP is spent on education (CIA., 2019)
Technological-
 One of the few countries in the world that is very technologically
advanced
 Over the years there has been good growth in technology
 Local companies are investing in latest technologies to create
more design and innovation

Analysis of External
environment
 PESTEL Analysis of Australia
Environment-
 Smallest among the continents but 6th largest among countries
 The country is geographically diverse and is very beautiful
 Party to several agreements based on climate protection
 There are several environmental issue that the country faces
Legal-
 There are consumer laws, competition laws and fair trading laws
 High court is the final appellate court in the country
 Each state and territory has a separate supreme court
 Employment is governed by fair work act 2009

Analysis of External
environment
Retail industry in Australia
 It is expected that between 2019 and 2024 the retail sector would
grow at a CAGR of 4.6% (Mordor intelligence, 2019)
 The are major winds of disruptions blowing in the sector
(Mortimer, 2019)
 There are several challenges that are being faced by the retail
sector at present (Jacobs, 2018).
 The number of retail companies witnessing failures has seen an
increase (Jacobs, 2018)

Analysis of External
environment
PORTER’S 5 forces
Competitive Rivalry- High
Threat from new entrants- High
Threat from substitutes –High
Bargaining power of buyer- High
Bargaining power of supplier- low (Mitchell, 2019a)

Analysis of Internal
environment
SWOT Analysis
Strength
 There are two key players in the Australian retail space and one of
them is Woolworths
 Woolworths has good penetration in all segments of the society
 Their efficient pricing and promotion strategy has enabled them to
manage the perception of customers well
 The company exhibits high employee satisfaction
Weakness
 The company has a confused positioning strategy
 High price competition has forced it make losses
 The company is not agile enough to embrace change at a fast
pace

Analysis of Internal
environment
SWOT Analysis
Opportunity
 The company has to understand ways in which it can turn around
fast
 Using its market position to advantage
 Changing its business model
Threat
 Rise in popularity of online platforms
 Rise of category-killers or the retailers who specialize in same
category retail products (Mitchell, 2019) (Lannin, 2019)
 Changing taste and preferences of customers

Competitive advantage of
Woolworhs
 Woolworths has been in business for a long period of time in the
year 1924
 Among the global retailers it comes at no. 17 (Sammartino, 2014)
 Starting as a variety chain in entered into supermarket business in
1960 and diversified into other formats later
 The company has good gender balance amongst its workforce
 The retailer has survived through several ups and downs in
market but has still remained strong
 The financial position of the company is good

Diagniosis of Woolworths
 The major concern for the company is the fact it has lost its agility
to change and respond fast to environment
 Its future sustainability would depend upon its response to
changing environment
 Discount department stores are not where they used to be in the
past. For surviving the future, they have to change.
 Woolworths huge scale however, keeps it protected price wars to
gives it ability to survive in the highly challenging retail landscape
in Australia.

Sustainability at Woolworths

Conclusion
 The high GDP rate combined with urbanization presents an
excellent opportunity.
 The aging population is however a challenge
 The retail environment is highly challenging
 Woolworths has been able to tide over the challenges due to its
size
 Woolworths however needs to be agile to be sustainable in future.

Reference
Woolworths. (2018). Annual report. [online] Available at:
https://www.woolworthsgroup.com.au/icms_docs/195396_annual-rep
ort-2018.pdf
Mortimer, G. (2019). The trouble with Big W: don’t blame online for
killing discount department stores. [online] Available at: https://
theconversation.com/the-trouble-with-big-w-dont-blame-online-for-kil
ling-discount-department-stores-114630
Mitchell, S. (2019). Woolworths finally bites bullet on Big W. [online]
Available at: https://
www.afr.com/business/retail/woolworths-to-shut-30-big-w-stores-201
90401-p519jr
CIA. (2019). The World fact book- Australia. [online] Available at:
https://

Reference
Lannin, S. (2019). Woolworths to shut 30 of its Big W stores amid retail
gloom. [online] Available at: https://
www.abc.net.au/news/2019-04-01/woolworths-to-shut-30-of-big-its-w-st
ores-over-next-three-years/10958700
Jacobs, S. (2018). Australian retailers are now 'going bust in record
numbers‘. [online] Available at:
https://www.businessinsider.com.au/australian-retail-companies-collapsi
ng-2018-11
Mordor intelligence (2019). Australia retail sector - growth, trends and
forecast (2019 - 2024). [online] Available at: https://
www.mordorintelligence.com/industry-reports/retail-industry-in-australi
a
Cody, A & Nawaz, M. (2017). UN slams Australia’s human rights record.
[online] Available at: https://
theconversation.com/un-slams-australias-human-rights-record-87169

Reference
IBIS WORLD. (2019). Retail Trade - Australia Market Research Report
. [online] Available at: https://
www.ibisworld.com.au/industry-trends/market-research-reports/retail-tr
ade
Mitchell, S. (2019a). Suppliers pull products in standoff with Woolworths
and Coles. . [online] Available at: https://
www.afr.com/business/retail/suppliers-pull-products-in-standoff-with-wo
olworths-and-coles-20190404-p51arx