Change Management in Woolworths

This report discusses the concept of change management in Woolworths, a leading retail organization in Australia. It explores the areas where the company requires change, analyzes external and internal factors, and suggests possible change strategies to improve the situation. The report also highlights the role of change in enhancing customer experience.

Running Head: Change Management in Woolworths
Organisational Learning
Report
System04104
6/6/2019

Change Management in Woolworths
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Table of Contents
1. Introduction.........................................................................................................................2
2. Overview of the company...................................................................................................2
3. Areas where company requires change..............................................................................3
3.1 External Factor (Macro) analysis of Woolworths............................................................3
3.2 External (Micro) factors...................................................................................................4
3.3 Internal Factors analysis...................................................................................................4
4. Literature Review...............................................................................................................5
4.1 Rational Approach............................................................................................................6
4.2 Incremental Approach......................................................................................................6
4.3 Emergent Approach..........................................................................................................6
5. Possible Change strategy to improve the situation.............................................................7
6. Recommendation for the most suitable strategies..............................................................7
7. Required resources for implementing the identified suitable strategies.............................8
8. Conclusion..........................................................................................................................9
References................................................................................................................................10

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1. Introduction
Change in organisation is necessary for the business sustainability and gaining competitive
advantage over other competitors. Change is the necessity for any business organisation to survive in
the market for the long time and gaining competitive edge over competitors. Change not only helps
the organisation to grow rather it increases the market share and profitability of the organisation.
Change also helps in identifying the future needs and preferences of customers (Knox, 2014). This
report will help to understand the change concept of Woolworths and about the required resources and
strategies to implement the change in the company. The report also helps to understand that what are
the challenges and issues arises when company decides to implement the change in the organisation.
However, Woolworths is one of the leading retail organisations in Australia, which needs change in
the organisation because of increasing competition in the Australian retail sector and changing needs
and preferences of Australian retail customers. The report also helps to understand the role of change
in enhancing the customer experience.
2. Overview of the company
Woolworths is one of the leading retail organisations in Australia, which deals in grocery
products and general household products. Woolworths was founded in 1924. Woolworths is
committed to provide quality products on very low prices to its customers. Woolworths has more than
3000 retail stores and with more than 14000 retail products. The Woolworths is known for its
marketing strategies. However, company is operating its business in Australia, South Africa, etc. It is
the parent company of Countdown, which is one of the reputed retail business organisations in New
Zealand. The revenue of the company in 2018 was AUD 56.726 Billion while more than 115,000
employees are working in the Woolworths stores and in different organisations of Woolworths
(Biddle, 2016). Woolworths is normally providing basic grocery and household products like
vegetables, fruits, package foods, grains, beauty products, electronic gadgets etc. However, the
mission of the company is to provide best quality products on low prices to its customers, which is
based on provide same value for money principle. The company believes that its customers are the
key reason for their existence in the market and their main motive is to server their customers
(Thomsen, 2016).
Woolworths almost formed a duopoly in Australian retail market with Coles. However, the
increasing number of competitors in the Australian retail market forces the companies to change its
strategies and focus on increasing its market share and profit maximisation by enhancing its services
and focusing on technological innovations. There are many other retail players like Aldi, Coles, etc.

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are giving strong competition to the company and many companies like Wal-Mart, Big Bazar, etc. are
looking for making entry in the Australian retail market. The increasing competition and large number
of players are forcing Woolworths to bring change in the company and its strategies to face the tough
competition in the Australian retail market (Brook, 2018).
3. Areas where company requires change
It is believed that change is the necessity of any business organisation for the survival and
facing completion in the market. Apart from this, change in management is also crucial for the
organisation as it enables the organisation to implement new strategies and technologies in the
organisation that helps the company to survive in the market and earn maximum profit. The company
needs to change its overall policies regarding its business operation, which is essential for facing the
competition in the organisation. To analyse the areas where company needs to change, it is essential
to analyse various external and internal factors of the organisation that poses threats for the company
(Verma, 2018).
3.1 External Factor (Macro) analysis of Woolworths
There are many external threats for the company among them price war and strong
competition in the retail industries some of the major threats. To analyse the external threat, it is
essential to analyse the company on PESTELE Analysis. Pestle analysis helps to understand various
external factors such as Political, economic, social, technological, environmental, and legal (Arli,
Dylke, Burgess, Campus, & Soldo, 2013).
Political Factors: Woolworths operates its business in many countries, thus instability in the
political scenario always leads to a serious threat for the company. Woolworths operates its business
in more than a dozen countries and it has to face different kind of political environment. Although, in
present times no country will face any political instability where company need to change its policies
because of instability in political environment (Knox, 2014).
Economic Factors: The Australian economy is moving with slow growth rate, while
uncertainty in the economy is also a problem for the Woolworths. The economic growth in Australia
is not stable rather than it is stagnant, which might pose threats for the company. However, the
increasing employment rate, hike in fuel prices, and high wages rates are also some of the crucial
problems for the Woolworths in Australia. However, the disposable income of people in the country is
increasing from last few years, which is favourable for the company (Jie & Gengatharen, 2019).
Social Factors: The life style and cultural trend of the company is modernizing every day in
the country. People spend lots of money on their life style and consumption patters as well. The

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demand of clothes and fancy dresses also increased everyday with increasing population of the
country.
Technological Factors: The technological advancement in the country and implementation
of new technologies and innovation by the competitors is a major threat for the company. Technology
plays an important role in product offering and services offered by the Woolworths to its customers.
The rate of technological diffusion in the Woolworths is so high and it is the major concerns for the
company (Verma, 2018).
Environmental Factors: Every organisation is looking for sustainable development approach
that helps to win the heart of customers and their trust in the company. Woolworths is also focusing
on sustainable business development, but it needs some major changes such as avoiding plastic
packaging, selling cage free eggs, and other CSR initiatives that help the company to establish itself
as a global brand in the world (Price, 2016).
Legal Factors: In most of the countries, entering in a new market is a risky and challenging
task for the company. It reduces the opportunities to expand the market in retail sector at the
worldwide. However, different law and regulations related to retail business in different countries
affect the profitability of the company in different ways (Knox, 2014).
3.2 External (Micro) factors
There are some micro external factors that influence the business of Woolworth and provide a
reason for the company to implement change in the organisation.
Strong competition: The competition in Australian retail industry is very high as there are
large number of player like ALDI, Coles, AUR, and SPAR Australia already enhancing their market
share in the country and give strong competition to the Woolworths. These companies are also using
the same tactics such as high quality products in low pricing strategy. Apart from this, threats of new
entrants in Australian retail market are also increasing, as there are many large and medium size
organisations are looking for entry in the Australian retail market (Nenycz-Thiel, 2011).
Price War: The new entrants and even the existing players are focusing on low margin on the
product and services. Apart from this, reducing the operational cost in the product pricing also leads
to the price war in the retail industry. However, Woolworths faced many blames in the past that
Woolworths was involved in unethical practices and its compromises with the quality because of
lowering the prices of the product. Therefore, product standards were sometimes compromised by the
Woolworths in price war with other competitors (Juan Ding, Jie, A. Parton, & Matanda, 2014).

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3.3 Internal Factors analysis
To analyse the internal factors and requirement for change, it is essential to do the SWOT
analysis of Woolworths.
STRENGTH
The major strength of the company is that its
key priority is customer and it formulates all its
strategies and policies for providing best value
for money. The company focuses on quality
products in reasonable prices and greater
customer experience.
WEAKNESS
The major weakness of the company is that it
faces problems regarding implementing new
technologies in the organisation. Apart from this,
managing the large human resource workforce is
also a major problem for the company.
OPPORTUNITIES
The Company can enter in the online market
with some other segments like clothes and
shoes. The online market really provides great
opportunity for the company to expand its
business.
THREATS
The major threat for the company is increasing
number of competitors and threats of new
entrants. Apart from this, the low pricing policies
of new entrants is also a challenging issue for the
company.
Based on the above analysis, it can be said that the major challenge for the company are
increasing competition in the retail market, technological advancements, increasing number of
customers at their stores, low products margin strategies of competitors, and new entrants in the
Australian retail market. The increasing competition and technological advancement force the
Woolworths to bring change in its strategy and it cannot be possible without a proper change strategy.
The increasing demand of people, change in the needs and preferences of customers and high
bargaining power of customers because of large number of alternatives in the market, force the
Woolworths to bring change in the organisation (Kang & Gray, 2013).
4. Literature Review
Every company adopts the change in the organisation because it not only essential for
providing better products and services to the customers, it also helps the company to survive in the
market and faces the tough competition (Price, 2016). Making change in the business organisation
not only helps the company gain competitive advantage rather it also helps the company identify the
potential needs and demand of the consumers and fulfil the needs and demand of customers

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accordingly. The Lewin’s change model highlights the change process in three phases; Unfreezing,
moving, and re-freezing. However, the model is generally criticized by people for its re-freezing
strategies (McCarthy, 2018). The idea of Lewin’s change model is to bring a strong change in the
organisation and cemented the change in the organisation ton place a new organisational reality.
Armenakis and Bedeian’s reviewed in their work that most of the change model is influences by the
Lewin’s change model (Phillipov, 2016). The review of academic literature discusses about a
perplexing collection of change models. This literature model focuses on three management change
approaches such as rational approach, incremental approach, and emergent approach.
4.1 Rational Approach
The rational approach of change states that people have the capacity to think logically and
rationally. The large numbers of researchers states that this is the one way of approaching the problem
or responding the opportunities, and therefore there will be one basic way of planning and
implementing change. The approach of managing and implementing change is based on a systematic
approach and it is essential that organisation know the clear change objectives before implementing
the change in the organisation (Price, 2016). However, this method will be beneficial when
quantitative criteria are used to implement the change. However, this approach can be fallen in three
categories like, the description phase, the options phases, and the implementation phase. The
description phases identify the objective for change; the options phase generates options for change
and helps in selection of best alternative in change process, while the third phase, the implementation
phases helps in putting the feasible pans into reality and helps in monitoring the results (McCarthy,
2018).
4.2 Incremental Approach
While the rational approach helps in planning and implementing change where objective is
not clear, the incremental approach is effective where the organisation wants to avoid unintended
outcomes and looking for a sustainable change in the organisation (McCarthy, 2018). The
incremental approach is focusing on organisational strategies, structure and processes for improving
the organisational effectiveness. The overall approach of this model is based on the organisational
development (OD) approach. The OD model approach focuses on diagnosis the current situation of
the organisation and develops an action plan to encounter the current situation and implement the
change process in the organisation. However, the top management and some external factors can
easily dictate the change in OD model approach and incremental approach of change (McCarthy,
2018).

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4.3 Emergent Approach
The emergent approach in managing change provides facilities in deep underlying changes,
where both rational and incremental approaches were not suitable. The emergent approach helps the
organisation to change its real nature such as culture, its organisational structure etc. The incremental
and rational approach of change does not consider the culture, behaviour, or nature of the organisation
while the emergent change can deal with all these aspects of an organisation. The Lamond supports
the view with her argument that there are three key levels in the Emergent approach that leads to the
management of change (Knox, 2014). The first step addresses artefacts, behaviour, the second step
addresses behaviour, and attitudes while the third step deals with behaviour, attitudes, beliefs, and
values.
However, apart from these change models and approaches the role of leadership in change is
so crucial as a leader can motivate and encourage people to adopt the change. The role of leader is
important in change management process as a leader can easily eliminate the chance of resistance in
the organisation by his mentoring and leadership skills.
5. Possible Change strategy to improve the situation
To face the strong competition in the organisation, Woolworths can adopt various strategies
that can help the organisation to face the competition and implement the required change in the
organisation. The increasing market forces and eternal market factors forces the companies to change
its organisational structure and culture (Price, 2016). When an organisation faces extreme pressure
from the competitors it needs to breakdown. The intervention and diagnostic approach helps the
company to identify the possible gaps in the services of Woolworths. The emergent approach can also
be used to change the organisation culture and behaviour of people in the organisation. The emergent
approach of change helps the company to change its organisational structure and overall culture of the
organisation. It will also help the organisation to remove the gaps in is human resource management
(MacMahon, Smith, & Lawrence, 2015).
Apart from this, the organisation can also change the technologies in the organisation and
adopt the latest technologies and innovation techniques to face the competition in the Australian retail
market. The Woolworths should focuses on installing latest technology equipment in the Woolworths
for better customer experience and providing better facilities to customers (Scott, 2012). It is the
major complaint for the Woolworths that company is failing to satisfy the customers and company
also involved in cheap goods and services. This is the reason that gives opportunities for other
competitor companies to raise questions on the products standards and quality of Woolworths.

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Change in technology helps the organisation to enhance its overall capacity and reduces the
operational cost of the organisation (Lawrence, Richards, & Lyons, 2013).
6. Recommendation for the most suitable strategies
As Woolworths is facing strong competition in the retail sector of Australian market and the
technological changes also poses threats for the company. The company needs to think about its
organisational strategies and culture. The company should focuses on implementing latest
technologies in the stores and providing a great customer experience to the customers in the stores
(Nakandala, Dilupa, & Lau, 2018). However, these are the small changes, but if company change
its organisational structure, it will lead to a great benefit for the company. Company should focus on
the emergent approach for the change process while the Lewin’s change model helps the company to
implement the change in the organisation in proper way.
The Woolworths needs to adopt the change in organisational strategies and structure as well
to face the threats of strong competitors and their low pricing strategies. However, the Woolworths is
one of giant retail organisation in Australia, but it is still facing issues related to its low market share,
declining in profitability, and loss in customers because of new technologies used by the new entrants
in the market. Apart from this, the company should also focuses on cultural development in the
organisation. The role of leader is important as leader can play a role of persuasive leader, who can
encourage and motivates the existing employees for the adopting the new changes in the organisation
(Scott, 2012).
7. Required resources for implementing the identified suitable
strategies
Implementing the technology needs huge financial resources in the organisation. However,
investment in the latest technologies equipment and modernising the Woolworths stores in such a way
that will provide a greater customer experience may help the organisation to overcome the challenges.
However, the role of top management and changes in organisational structure is necessary for these
changes (Wahyuni, 2010). The Woolworths needs to match the resources to the opportunities
available in the organisation. For this, organisation needs to work upon to assigning the work to the
middle and upper middle level management and give them more responsibilities for the new changes
and its implementation. Apart from this, the organisation will have to spend money on employees
training and learning program, that helps the employees in the organisation to adopt the new
technological changes in the organisation. Apart from this, the Woolworths also need to hire new
talent in the organisation who are capable in handling new technology in the organisation (Xu, Gao

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& Hammond, 2017). The Woolworths also need to build a customer centric policy that helps the
organisation to identify the current customer needs and their preferences. The Woolworths should also
focus on innovation part and it needs huge financial and human resources for the new research and
development products and services.
8. Conclusion
In conclusion, change is the necessity of business organisation to survive in the market and
gain competitive advantage over other players in the market. The report focuses on the change
management process of Woolworths, which is facing strong challenges from competitors and
technological advancements. Woolworths should focus on bringing technological changes in the
organisation and also focuses on innovation. This is not possible if the top management of the
company will not support these changes in the organisation. However, if the organisation focuses on
bringing change in its overall organisational structure, it will be beneficial for the organisation and
will help to encounter the both challenges related to heavy competition and technological
advancement in the retail industry. The Woolworths should adopt the Emergent approach to
implement the changes while the three phases of Lewis change model helps the company to
implement the change process in the organisation.

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