Internal and External Stakeholder Analysis of Woolworths

This report provides an analysis of the internal and external stakeholders of Woolworths, a leading Australian supermarket chain. It covers the key functional areas of the company, the conflicting interests with stakeholders, and a stakeholder matrix. The report also includes a comparative analysis of Woolworths and BHP Billiton, a mining company, in terms of their stakeholders.

RUNNING HEAD: BUSINESS ENVIRONMENT
Business Environment

BUSINESS ENVIRONMENT 1
Executive Summary
The research report is based on the title ‘Internal and External stakeholder analysis’.
Woolworth’s stakeholder analysis report pours light on the following heads:
 Woolworth’s key functional areas are
 It is a recognized supermarket based in Australia.
 Its internal stakeholders are Employees
 Its external stakeholders are Customers, Suppliers, Shareholders and Debt Funders.
 Its chief stakeholders are Employees, Customers and Suppliers.
 Its customers and employee attains good interest in Woolworths.
 It is asses that conflicting interest with stakeholder has a serious impact on the business.
 For the stakeholder analysis, Woolworth’s stakeholder matrix is developed.
 In the discussion forum section, stakeholder analysis is done between Woolworths and
BHP Billiton.
 The major dissimilarity between both the company’s stakeholders is that BHP Billiton
has diverse stakeholders than Woolworths.

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Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................3
Functional areas...............................................................................................................................3
Stakeholders.....................................................................................................................................4
Internal stakeholders....................................................................................................................4
External stakeholders...................................................................................................................5
Chief Stakeholders...........................................................................................................................6
Implication of Conflicting interest...................................................................................................7
Stakeholder Analysis Matrix...........................................................................................................8
Stakeholders comparative analysis..................................................................................................9
Conclusion.....................................................................................................................................10

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Introduction
The report is prepared on the title ‘Business Environment’ of Woolworths. It is an
Australian supermarket founded in the year 1924. It attains the largest supermarket chain and it
has around 995 stores in Australia (Group, Woolworths Supermarkets, 2019). It is a multination
supermarket company and thus operates in eleven countries in the global market (Khumalo ,
2016). It has 115000 team members in supermarket stores, distribution center and support office.
It operates in physical as well as online channels (Group, Woolworths Supermarkets, 2019).
(Jones, 2019). The key purpose of the report is to pour light on some aspect of the business
environment and to enhance managerial knowledge.
Figure 1: Woolworth’s Annual revenue
Source: (Jones, 2019)
Functional areas
 Marketing department
 Human resource department
 Finance department
 Customer service department (Gaspar , Risa , Bierman , & Kolari, 2013)
Marketing department plays a significant role in the business as it promotes the products
and services offered by the company. It helps in fostering business growth and profitability. It
attains the responsibility for enhancing the revenue of the company. Its main role is to reach out
to the potential customers and investors and represent a positive image of the company (Gaspar ,
Risa , Bierman , & Kolari, 2013). Similarly, Woolworth marketing department has developed
subtle advertising messages and it had helped the Woolworth in raising more customers. Its
strategies include providing better convenience, superior freshness and innovative products.

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Additionally, its strategies for developing a mobile app, the official website have assisted in
retaining the customers (Mitchelson , 2018).
Human resource department as act as the backbone of the company. It is responsible for
performing the main activities of recruiting a suitable candidate, developing a safe and healthy
work environment, fostering employee’s interpersonal relationships, conducting training and
developing compensation and benefits for the employees (Gaspar , Risa , Bierman , & Kolari,
2013). Woolworths has strength of 46000 employees (WHL, 2019). It offers multiple benefits to
its human resource to enhance their motivation to retain productive output. It provides key
benefits in the form of flexible working, paid leave and financial incentives (Indeed, 2019).
The finance department is responsible for performing the financial transactions including
planning, auditing and controlling the financial expenses of the company. It is responsible for
marinating the cash liquidity in the company. Additionally, it is accountable for acquiring fund
for the business (Gaspar , Risa , Bierman , & Kolari, 2013). It has assisted the Woolworth in
boosting its financial profit (Letts & Janda , 2017). Moreover, it helped the Woolworths in
enhancing its sales by 3% (Finance, 2013).
Customer service department attains the role of ensuring customer satisfaction in the
company. It is accountable for developing healthy relationships with the customers and solving
the queries of the clients in respect of product and services. It helps in understanding the needs
and wants of the customers. Additionally, it assists in raising satisfied customers (Gaspar , Risa ,
Bierman , & Kolari, 2013). It is asses that Woolworth provides fine customer service with 24
hours availability. However, it is recognized that its customers are not satisfied with its service
(Pilot, 2019).
Stakeholders
A stakeholder is a party that attains key interest in a company and can affect or be
affected by the business. These are interested in the financial wellbeing of the company
(Freeman R. E., 2010). The key stakeholders of the Woolworths are as follows:
Internal stakeholders
Internal stakeholders are the entities within the business. It includes the groups and
individuals that work within the organization. These are involved in the company’s internal

BUSINESS ENVIRONMENT 5
business process and directly affected by management decisions. The company attains primary
responsibility towards them (Freeman R. E., 2010).
Employees- Woolworths has around 46000 employees with respect to global operations.
It acts as a leading employer as it invests in developing skills, learning opportunities and positive
work environment in the Woolworths. They are considered as the most important resource and
thus attains the duty of performing their work in the most effective and efficient manner in the
company (Group, Investors, 2019).
External stakeholders
An external stakeholder is individuals or groups outside the business. They are not
members of the business but attain a major influence on the long-term success of the business.
The company attains secondary responsibility towards them (Freeman R. E., 2010).
Customers – Woolworth has a large strength of loyal customers in Australia as well as in
the global market. From the retail stores and through its online channels, Woolworths serves
approximately 3 million customers each day (King , 2014). They attain a significant role, as they
are highly responsible for the company overall sales and growth in the market.
Suppliers – There are thousands of direct and indirect suppliers associated with the
Woolworths (WHL, 2019). Their major role is to provide the company with quality supplies as
reasonable rates. Its major suppliers are AB Foods, Australian British foods, Kailis Brothers,
perfection fresh and Driscoll’s Australia (AFN, 2018).
Shareholders – Woolworth has several shareholders because it is a JSE listed and
publicly traded company. Its major shareholders are from South Africa and other countries.
These are a major institution and financially powerful individuals (WHL, 2019). It has a strength
of 445000 shareholders, majority of them are Australians (Group, 2019).

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Figure1: List of Woolworths top shareholders
Source: (AFR, 2019)
Debt Funders – Its debt funders attains a significant role in Woolworth’s financial
process. They are the major source of business capital. It adequately helps in funding the
business to help the company in meeting their financial responsibilities (WHL, 2019).
Chief Stakeholders
Employees are considered as the primary internal stakeholders in Woolworths. It is
because they invest their time and perform a defining role in business operations. Their presence
is highly important as they carry out the basic business activities needed for running the business.
Thus, they act as the backbone for the company in performing the necessary activities. They
attain fine interest in the Woolworth as it provides several benefits to its workforce. It delivers
paid sick leave, staff discounts, work flexibility and health insurance discounts (Group, 2019).
Figure 2: Woolworth employees rating

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Source: (Indeed, 2019)
‘Figure 2’ suggests that Woolworths employee are satisfied with the overall work
process. Additionally, it has received a fine rating of 3.8 from its employee reviews. Hence, it
concludes that Woolworth’s employees have a high interest in the company (Indeed, 2019).
Customers, Investors and Suppliers reflect as the main external stakeholders in the
Woolworths. This is because the basic purpose of the business is to fill the customer needs. They
are highly important and their needs and wants were given due consideration in the business.
Woolworth’s customers possess a high interest in the company with respect to the products. It is
analyzed that it offers several benefits to its customers like discounts, vouchers and rewards. It
has also topped in ‘Customer satisfaction index, of 2016’. It has gained a higher score than the
industry average and has succeeded in retaining highly satisfied customers (Community, 2017).
Its highly satisfied customers have helped the Woolworth’s in achieving better sales, profit and
customer score (Cameron , 2018). Hence, it is analyzed that customers have superior interest in
respect of Woolworth supermarket.
It is examined that Woolworth’s investors are satisfied with the company, it is because it
is progressing in making new records. It has become the world first retailor to issue green bonds
(Maisch , 2019). Suppliers are also termed as key external stakeholders. They act as helping
hands for the business in fulfilling the customer’s wants and often act as a base for the
organization business process. It is assessed that Woolworth has poor relations with the suppliers
(Halliday , 2017). Hence, it is analyzed that Woolworth’s suppliers are not satisfied, as it had
reduced the supplier’s prices. Thus, they attain a fair interest in Woolworth’s (Battersby , 2013).
Implication of Conflicting interest
Conflicting interest with the stakeholders had a serious impact on the business. It has a
direct effect on the overall work process of the business and generates a poor relationship with
the specific stakeholder. It is time-consuming and thus incurs a long time for resolving conflicts.
Additionally, it also suffers from high cost and often affects the goodwill of the business in the
market. It limits the growth opportunity for the business. Hence, it has a direct influence on the
performance of the business (Carney, 2011).

BUSINESS ENVIRONMENT 8
It is assessed that Woolworth has faced conflicting interest with the Suppliers. It had
faced challenges with the suppliers as they were giving less attention to the company (Sheedy ,
2016). It was also accused of bullying suppliers for paying am the heavy sum in respect of an
issue (Hawthorne , 2014). Thus, it is laying high attention in improving its relationship by
developing a voluntary code of conduct with the suppliers (Janda , 2013). Hence, conflicting
interest with the stakeholder has a serious impact as it disturbs the whole work process of the
company.
Stakeholder Analysis Matrix
Serial Number Title Interest Engagement strategy
Stakeholder 1 Employees Intermediate
interest
Share in profit
Stakeholder 2 Customers Fine interest Personalize customer
communication
Stakeholder 3 Suppliers Intermediate
interest
Supply chain mapping
Stakeholder 4 Shareholders Maximum
interest
Conducting regular
meetings
Stakeholder 5 Debt Funders High interest Enhancing financial
transparency
Source: (Van der Heijden, 2011)
Engagement strategy relates to encouraging the essential human resource to foster
company growth and loyalty. By providing a subsequent share in profit, it will help the
Woolworth in retaining the best service and quality work from the employees. By allowing share
in profit, it will motivate the employee to work more efficiently for achieving financial gains.
Through the development of personalized customer communication, it will generate a
harmonious relationship between the Woolworths and its potential customers. Thus, it will result
in enhancing sales revenue. By developing supply chain mapping, it would help the suppliers in
spotting potential threats and allowing a reduction in risk. By developing regular business

BUSINESS ENVIRONMENT 9
meetings, it will enhance the interest of the shareholders in the Woolworths. Moreover, it will
help in acknowledging them with the latest financial position of the company. In order to gain
financial assistance from the debt funder, Woolworths should focus on enhancing financial
transparency. It will generate trust among the debt funders and thus it will ease in raising fund
from them.
Stakeholders comparative analysis
Woolworths operates in ‘Supermarket industry’ whereas BHP Billiton operates in the
‘Mining industry’. A supermarket industry is a self-service store that offers a wide variety of
food, beverages and household products. It such stores, products are organized into sections and
shelves. In this industry, employees are given limited services free of charge. It includes a
separate department in respect of the product category (Dwivedi, 2012). The mining industry is a
branch that deals with the extraction of valuable resources from the earth surface. It is usually
engaged in the extraction of minerals such as coal and other precious gemstones (Kirsch, 2010).
BHP Billiton stakeholders are employees, shareholders, customers, non-government
organization, suppliers, labour unions, industry associations, government and regulators,
business partners and media. Its key stakeholders are employees, customers and suppliers. Thus,
it is asses that BHP Billiton has multiple stakeholders than Woolworths (Thompson & Macklin ,
2010).
BHP Billiton employees act as its internal stakeholders. It is asses that its employees are
not satisfied with the company as it prioritizes profit before employee safety. Additionally, BHP
Billiton does not pay fair wages and benefits to its workers (Fredenburgh , 2018). Additionally,
its employees were not given rights in respect of workplace accident (Herald, 2016). In order to
reduce operational cost, it also cuts jobs (Foster , 2014). From these findings, it is assessed that
its employees do not attain fair relations with the company. BHP Billiton attains fine relation
with its suppliers. It builds opportunities for its suppliers at the local level (Club, 2016). It also
developed the ‘World Class Supplier Program’ to boost the emergence of its local suppliers
(Smith , Longo, & Murray , 2019). Additionally, it attains adequate relation with its investors.
One of the major reason for such poor relation is the occurrence of Brazil environment disaster
because of dam subside (Chapman , 2018).

BUSINESS ENVIRONMENT 10
In relation to the above findings, it is asses that Woolworth’s employees have higher
interest than BHP Billiton employee’s. Suppliers (external stakeholder) have less interest in
Woolworths Company in contrast to BHP Billiton. Additionally, it is analyzed that Woolworth
has highly satisfied investors than BHP Billiton.
Conclusion
The report is summarized on the ‘Environment Analysis’ of Woolworths. From the above
findings, it is analyzed that employees, customers, suppliers and investors are the key
stakeholders of Woolworths. It is examined that Woolworth’s employees, customers and
investors have a positive response in the company as compared to its Suppliers. It has also
poured light on the effect of developing conflicting interest with the stakeholders. Additionally,
it also includes a stakeholder’s matrix for achieving to enhance engagement of the stakeholders
in the business. The last section of the report includes the comparative analysis of Woolworth’s
stakeholders with the BP Billiton stakeholders. Thus, it concludes that stakeholders are
considered an important resource for the company. It has a vital presence in the company as it
assists in achieving organizational goals. Hence, its stakeholder analysis is very significant for
achieving long-term gains.

BUSINESS ENVIRONMENT 11
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