Closure of 60 Big W Stores: Analysis of Project Management Strategies

This report analyzes the closure of 60 Big W stores in Australia due to inefficient project management strategies. It discusses major issues, control systems used for cost, schedule, quality and scope, and analysis of costs and schedule overruns. It also analyzes the project estimation team and the relationship between overruns and stakeholders.

Running head: CLOSURE OF 60 BIG W STORES
Closure of 60 Big W Stores
Name of the Student
Name of the University
Author note

1CLOSURE OF 60 BIG W STORES
Table of Contents
1. Project Snapshot..........................................................................................................................2
2. Introduction..................................................................................................................................3
3. Major Issues.................................................................................................................................4
4. Control Systems...........................................................................................................................5
4.1 Control Systems used for Cost..............................................................................................5
4.2 Control Systems for Schedule...............................................................................................6
4.3 Control Systems for Quality and Scope.................................................................................7
5. Analysis of costs and schedule overruns.....................................................................................8
6. Analysis of the project estimation team.......................................................................................9
7. Analysis of relationship between overruns and the stakeholders..............................................10
8. Analysis of possible actions for success....................................................................................11
9. Conclusion.................................................................................................................................12
References......................................................................................................................................14

2CLOSURE OF 60 BIG W STORES
1. Project Snapshot
(Figure 1: The Snapshot of the News Article)
(Source: Richards et al. 2019)

3CLOSURE OF 60 BIG W STORES
2. Introduction
The project is based on the understanding over the major factors based on closedown of
major projects and which have led to severe loss structure. In the present study, the major focus
is put over the struggle being faced at Big W based on their major closedown of stores due to
various aspects of inefficient project management strategies. Falling business profits being
incurred within the company has been the primary reason for the closedown of 183 minor stores
and 60 major stores within Australia (Matthews, Allouche and Sterling 2015). In a recent report
released by Macquarie Wealth Management, it can be understood that the decision for the
closedown of 60 stores from all across Australia has been made after the organisation had lost
nearly $8 million within the first half of year 2019 and $110 million in the past financial year.
The closedown of the major stores of Big W indicates the case of a major failure in the
management of projects by the internal management team. There are many kind of complex
projects, which mostly fail to gain the best kind of outcomes that had been planned during the
planning phase of the project. There are many organizations, which mostly commit to the
customers about the success of their projects (Jensen, Thuesen and Geraldi 2016). However, after
a certain point of time, it can be seen that these kind of projects mostly fail to deliver the best
outcomes and thus would have to be shut down completely owing to their low success rate.
The following part of the report would thus discuss about the major reasons that could
have occurred within the project. This is followed by a proper discussion over the type of control
systems that might have been used within the project in order to avoid the cases of failure. Based
on a proper kind of analysis made over the cost and time, it can be discussed about the major
reasons that had led to the failure of the project.

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3. Major Issues
From the latest reports being published by various news sources, it has been understood
that 60 big stores at Big W have tipped towards the closure of their stores. This is mainly due to
the reason that the discount departments have been facing major amount of struggle in order to
compete with many of the big retailers in the competitive market (Samset and Volden 2016).
According to the reports published, it can be seen that Walmart have been in the process of
purchasing the major amount of stocks. The main person behind the initiative is Roger Corbett,
who is the former CEO at Woolworths and has also been a former director at Walmart.
Based on the major move, it can be seen that the closure of these stores would lead to a
whopping drop of profits of nearly $800 million as claimed by Macquarie Wealth Management
team. One of the major issues that was posing over the systems of Big W was the declining
number of profits, which had led the Macquarie Wealth Management team to bring in new
strategies in order to prevent the entire closedown of their major stores in the country
(Denscombe 2014). The managers at Big W were considering over a national review over their
internal business systems and trying to understand the processes while bringing in improvements
within the scenario.
The straightforward projects have the major kind of possibilities that there could be many
areas, which could be the primary cause of the root problems. This could manifest within the
system, damage the internal processes and lead to failure. Other levels of problems and
complexity could rapidly escalate the internal matters of the company and progress towards
massive disasters (Becker and Smidt 2015). In the consideration of the currently discussed
project, it has been seen that Woolworth had confirmed that nearly 60 stores located in Australia

5CLOSURE OF 60 BIG W STORES
were on the verge of facing shutdown, which also included two major distribution centres. The
number represented 60% of their entire network strength spread all over Australia.
One major problem that had led to failure of the project established by Big W is online
shopping, which has become the trend in the current market. With the increasing penetration of
online shopping habits being incurred by customers, it can be defined that the footprint of the
physical departmental store would continue towards shrinking.
4. Control Systems
4.1 Control Systems used for Cost
The Woolworths had been in the process of being forced for shutting down their Big W
stores due to a massive loss of profits that were estimated to be in the range of $800 million. Big
W had planned for a 2.7% rise in the amount of profits till a maximum time period of December.
The estimation of cost in order to boost their productivity and aim at increasing the business
profits was also estimated at $2.1 billion, including the tax amount of $34 million. The above
section in the report discusses about the major issues, which could have leaded the project
towards failure and entire shutdown of their stores (Harrison and Lock 2017). Though the online
shopping methods made within the various stores and department are growing at a fast rate, the
total amount of spent money made by Australian shoppers had been calculated at AUD $28.8
billion.
In order to control the loss of profit margin and better manage the cost structure of the
company, certain control systems needs to be put in place that would help in managing the vast
range of issues. Cost management structure should be incurred based on planning and controlling
the entire budgeting structure made for the business (Maskell, Baggaley and Grasso 2017). Thus,

6CLOSURE OF 60 BIG W STORES
costs control could be defined as the process of regulating the actions made by executives
towards undertaking projects. The practice of cost control could thus be achieved towards
targeting of sales functions.
(Figure 2: The Cost Management Control System for the Project)
(Source: Maskell, Baggaley and Grasso 2017)
The cost management that could be made within the project would incur four certain
steps, which are described as: Resource planning, cost estimating, cost budgeting and controlling
unnecessary costs. From the understanding of the business structure of Big W stores, it has been
discussed that most stores of the company were mainly spread across regional areas. This is the
main reason that people were not able to gain access to the stores, which further led to problems
based on gaining momentum and earn better profit margins (Sears et al. 2015). Thus, in order to
mitigate the gap based on meeting better profit margins, the company should consider the
accessible regions within the country and thus set plans based on store development.

7CLOSURE OF 60 BIG W STORES
4.2 Control Systems for Schedule
Controlling of the project schedule is another key activity of project management. This
can be defined as a form of control system in which the project could be aligned based on
gaining the maximum amount of business benefits. Determining the schedule baseline would be
helpful in understanding whether a particular activity is being progressing as per planned or
lagging behind the schedule (Hazır 2015). In the case of the project failure based on the
shutdown of the globally located stores of Big W, it can be discussed that the project manager
working over the project should have made possible corrections at determining plans for
upgrading their present business situations.
Preparing schedule baselines and determining of a schedule management plan could be
defined as inputs that could be made within a certain process. A plan designed for schedule
management would mostly recommend tools and methods based on usage. This would also
include the factors of Schedule Variance (SV) and Earned Value Management (EVM). Schedule
baseline can thus be considered as a reference based on comparing the present progress made
over the project (Chaari et al. 2014). On the other hand, controlling activity could be thus be
defined as comparing of the information of present project progress against the pre-determined
baseline.
4.3 Control Systems for Quality and Scope
Scope control could be defined as the process based on the purpose of performing
monitoring and controlling of the project activity structure. It thus puts their entire focus over the
management of internal and external project aspects (Shehu, Endut and Akintoye 2014). The
changes that need to be made within scope of any project could incur the following control
systems structure. These include:

8CLOSURE OF 60 BIG W STORES
1. Writing a clear scope statement that mentions the vision of the project.
2. Defining of requirements that need to be procured for the successful project
implementation (Safa et al. 2015).
3. Maintaining a strong communication between each of the stakeholders involved within
the project.
4. Creation of estimates based on cost structure, determination of assumptions,
constraints, extra contingencies, risks and many others.
However, the control systems based on quality aspect would involve the several kind of
activities that could be used together for evaluating whether the services or products being used
would be able to meet with the quality standards. Thus, having a strong control over the quality
structure can be defined as highly beneficial (Wong 2018). This would also be able to ensure that
the project would be designed as per planned. In the case of the present project, it can be seen
that the project management team at Macquarie Wealth Management were not able to maintain
good quality in maintaining the hold over customers.
5. Analysis of costs and schedule overruns
The cost overruns, which are also known as budget overrun or increase in costs within the
project, involves the unexpected form of incurred costs during the designing of the project. Due
to increasing kind of pressure from the major competitors of the retail market such as Amazon,
Big W has been in the process of incurring the best kind of retail infrastructure. During the entire
process of redesigning of the project, the cost was overestimated at an amount of $2.7 billion
made during lease commitments (Aretoulis, Kalfakakou and Seridou 2015). This was made

9CLOSURE OF 60 BIG W STORES
during the process when the Big W store consultants were mostly committed to operate their
functionalities in most of the reputed shopping malls.
From the understanding of the schedule overruns, it can be described that the Big W
stores should discuss over aspects based on turning their project schedules based on gaining
maximum amount of profitability. In order to redesign the project based on reducing the rapid
shutdown of stores, it can be discussed that there would be several stages that needs to be
performed. However, it can be discussed that there are several stages that needs to be performed
in order to bring the project on track and align them with the needs of the requirement for the
business (Larsen et al. 2015). The Macquarie Wealth Management team who have been in the
process of updating the project management strategies and thus implement better plans have
discussed over a long term process. In the recent stages, it has been seen that almost 60 stores
have been shut down for Big W. The review for the entire process over the present situation
would need to be firstly done and is currently under review (Hulett 2016). However, no kind of
decisions about the analysis over the review have been made in the current process. This would
thus result in the analysis that the schedule would overrun, which could lead to more failure for
the project outcomes.
6. Analysis of the project estimation team
The project execution team who would be responsible for incurred time or cost overruns
should be highly responsible in determining the best kind of needed actions and implement
procedures that could be followed. The performing of analysis could be made in the following
ways:

10CLOSURE OF 60 BIG W STORES
1. One of the major reason for costs overrun is based on making errors within the design
aspects. The project estimation team should determine the requirements as mentioned or required
by the client and design a blue print of the costs. Any wrong kind of estimation that would be
made within cost estimation strategies could affect the future outcomes from the project. Less
amount of budget estimation than the required amount could lead to shortage of money at any
stage of the project (Titarenko, Titov and Titarenko 2014). This would in turn delay the end
result of the project. Hence, in order to control the aspect of cost overrun and project design,
there should be a high need to involve professional skills and implement competent tools, which
would lead to better outcomes.
2. The project estimation team could be held responsible for cost or time overrun based
on faulty form of contractual management system. During the process of redesigning of the
stores and make them reputable in the global market, it could be discussed that there need to be
some form of contract signing within every stakeholder involved within the team. The
importance of contracts could be discussed as a description of business correlation, service
levels, pricing strategies and payment terms (Rokooei 2015). Poor contractor selection could lead
to low bids and no kind of technical capability based on handling of projects, which would
further lead to delays in schedule, poor quality outputs and cost overruns. In these cases, the
project estimation team would be held fully responsible and they might lose their contracts from
the project.
7. Analysis of relationship between overruns and the stakeholders
The certain needs and influence made by stakeholders in relation to the identified
problems based on cost or time overruns could be discussed as:

11CLOSURE OF 60 BIG W STORES
1. Competent skills should be highly required by every concerned project team members
in order to reduce the design errors that would be made during the project design (Sovacool,
Gilbert and Nugent 2014). The project estimation team should be extremely professional within
their workplace and thus be capable of delivering the best possible outcomes. The achievement
of good communication would be helpful for both the project estimation team and Macquarie
Wealth Management team to determine the best possible project design (Barcellini, Van
Belleghem and Daniellou 2014). Ensuring the best kind of communication would lead to
corrective actions being performed, monitor the business solution and control them based on
managing of project performance.
In the case of the present project, the Macquarie Wealth Management team needs to
investigate the best sites, which would be highly crucial for gaining the attention of customers.
This would majorly help the business to incur higher revenues during the entire financial year.
2. Faulty identification of contractors could lead to negative impacts over the entire
project structure. Poor selection of contractors could lead to loss of costs and bring delays within
the entire completion time of project. Cost overruns within the project could lead to shortage of
business funds during the implementation phase of project (Drees, Wang and Holzapfel 2014).
The major needs of the stakeholder would be to implement the best kind of project design
standards that would help towards the entire development of the project.
The problems that have been identified within cost or time overruns could be solved
based on a proper selection of contractors. These contractors would thus help in solving of
critical problems that might arise during the time of project design. Hence, they would be able to
accommodate each of the project scheduled activities in proper place so as to avoid the time or
cost overruns.

12CLOSURE OF 60 BIG W STORES
8. Analysis of possible actions for success
The project management actions that could help in better controlling of stakeholders and
project outcomes for increasing the chances of successful delivery are:
1. In order to ensure that the project estimation team be able to bring out the best kind of
project design, it would be highly recommended that error free design could only be made based
on incurring the best kind of communication method (Aragonés-Beltrán, García-Melón and
Montesinos-Valera 2017). The process of reviews and extensive investigation that would be
made over the presented design could also be confirmed as the best way to improve the project
designs and gain best future outcomes.
2. The most qualified contractor should be firstly selected. This could be possible with
the help of an ethical tender system (Mok, Shen and Yang 2017). This would be followed out
with a suitable type of contract that could further be applicable with every project condition.
9. Conclusion
Based on the discussion from the above key aspects of the report, it could be concluded
that the closure of Big W stores in Australia were the main cause of improper project design
structures, lower estimation of customer demands and absence of an online presence. The project
designers who were working over the project were not capable of bringing out the possibilities
that could help in impacting the overall business structure. The initial part of the report puts
focus over the major kind of issues that were faced by Woolworth based on which they were
being forced to shut down their 60 major stores within Australia.
Thus, this discussion leads to an understanding over the type of control systems that
could be used in relation to the consideration of schedule, cost, quality and scope. These are

13CLOSURE OF 60 BIG W STORES
considered as one of the major aspects that lead the project towards the standards for success. In
the case of projects, there are two important concerns that lead to failure of projects, which
includes time or cost overruns. Hence, from the above discussion, it could be concluded that
these type of problems have a great impact over the project and the involved stakeholders.
Hence, in order to meet with the standards, the key lessons that could be learnt by the project
management team have been mentioned as a recommendation. Thus, from the conclusions
gathered from the understanding of the report, it has been understood that the inclusion of these
kind of strategies and necessary actions would help the Big W stores to attract more customers
towards their business and make future benefits.

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