Impact of Competitive Analysis on Retail Industry and Woolworths

This report analyzes the impact of competitive analysis on the retail industry and Woolworths. It includes an overview of Woolworths, Porter's Five Forces Model Analysis, and recommendations for Woolworths to become more competitive.

Running head: STRATEGIC MANAGEMENT
Strategic Management
Name of the Student
Name of the University
Author note

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Executive Summary
The report has helped in understanding the impact of the competitive analysis on the retail
industry along with on Woolworths retail company. Furthermore, there are different inter-
connectedness between the different forces which have been analysed along with the
recommendations and implications have been analysed.

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Table of Contents
Introduction of Industry Analysis..............................................................................................3
Overview of Woolworths...........................................................................................................3
Purpose of Analysis....................................................................................................................3
Inter- connectedness of different aspects Porter’s Five Forces Model Analysis.......................3
Overall Impact on Woolworths and Retail Industry..................................................................5
Conclusion..................................................................................................................................5
References..................................................................................................................................6

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Introduction of Industry Analysis
The report helps in analysis of the industry analysis with the usage of Porter’s Five
Forces Model Analysis. Furthermore, the interconnectedness with the different aspects have
to be identified and analysed effectively as well. Industry analysis is one of the essential
business functions which is completed by business owners along with individuals as to assess
the current business conditions effectively.
Overview of Woolworths
Woolworths is Australian supermarket which was founded in the year 1924 and the
revenue which has been earned by the company is 3655.93 crores and the number of
employees working in the organization is 1,11,000 and the number of locations which is
being served by them is 995 till the year 2017 (Woolworths.com.au, 2018).
Purpose of Analysis
Porter’s Five Forces Analysis helps the organizations in understanding the different
threats in the industry and they can shape themselves accordingly.
Inter- connectedness of different aspects Porter’s Five Forces Model Analysis
Figure 1: Porter’s Five Forces Model

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(Source: Yunna & Yisheng, 2014)
Threat of New Entrants in the food and retail sector brings new innovation and new
ways of performing things. This will be creating pressure on Woolworths as the other
entrants can provide same products at lower price and there are different other barriers (E.
Dobbs, 2014). Woolworths need to tackle by innovating new products along with building
economies of scale. Furthermore, building capacities along with spending money on the
research and development effectively.
Bargaining power of the suppliers is the other element in which there are numerous
suppliers from whom the raw materials can be purchased. The suppliers in dominant kind of
position can reduce the margins of Woolworths and this will lower profitability as well.
Woolworths needs to tackle by building efficient supply chain with multiple number of
suppliers. Development of the suppliers is essential who will help in providing the different
kinds of essentials to the firm and the retail industry (Yunna & Yisheng, 2014).
Bargaining power of buyers is the element in which buyers demand various products
and they will choose the ones wherein best offerings are available at cheap prices. This will
create pressure on profitability in long-run. In case of Woolworths, this is essential in nature
to build large number of customer base and rapidly innovate new kind of products
effectively.
Threats of Substitute Products or Services is the element wherein there are similar
kinds of products which are being sold by the company to the customers in the market who is
able to meet similar demands of the customers effectively. Woolworths is under pressure and
this is solved by increasing switching cost for the different customers and being more service
oriented and not just product oriented (Yunna & Yisheng, 2014).

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Rivalry among the Existing Competitors is wherein there can be rivalry among
existing players and is intense in nature and this decreases overall profitability of firm.
Woolworths need to tackle by building sustainable differentiation strategy (Yunna &
Yisheng, 2014).
Overall Impact on Woolworths and Retail Industry
With analysis of the porter’s five forces model, a complete picture can be gained in
which this is seen that there are game changing trends and this exploits the emerging
opportunity in retail industry. By analysis of the same, Woolworth’s managers need to shape
such forces in their favour.
Conclusion
Therefore, this can be concluded that Porter’s Five forces analysis is essential which
is required to be conducted by Woolworths and the other retail companies in industry as to
shape their company in accordance to five forces and this will help them in becoming more
competitive in nature.

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References
E. Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of
industry analysis templates. Competitiveness Review, 24(1), 32-45.
Mathooko, F. M., & Ogutu, M. (2015). Porter’s five competitive forces framework and other
factors that influence the choice of response strategies adopted by public universities
in Kenya. International Journal of Educational Management, 29(3), 334-354.
Woolworths.com.au (2018). Retrieved from https://www.woolworths.com.au/
Yunna, W., & Yisheng, Y. (2014). The competition situation analysis of shale gas industry in
China: Applying Porter’s five forces and scenario model. Renewable and Sustainable
Energy Reviews, 40, 798-805.