Business Strategy of Australian Supermarket

In the same way, current report is also easily focused on the business strategy of Australian supermarket and describe some models and theories that help to understand the entire business strategy in better manner. Executive summary2 INTRODUCTION 1 MAIN BODY1 Australian supermarket case 1 Strategic issues faced by the company1 SWOT analysis 2 BCG Matrix 3 Marketing Mix 5 Porter's five forces6 Herzberg Hygiene theory 8 CONCLUSION 8 REFERENCES 10 WOT Competitive strategy is defined as the long term plan for the particular

Competitive strategy

Executive summary
In this modern era, every company wants to stay ahead in the competition and that is
why, most of the company uses competitive strategy as well. In the same way, current report is
also focused on the business strategy of Australian supermarket and describe some models and
theories that help to understand the entire business strategy in better manner.

Table of Contents
Executive summary..........................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Australian supermarket case........................................................................................................1
Strategic issues faced by the company.........................................................................................1
SWOT analysis............................................................................................................................2
BCG Matrix.................................................................................................................................3
Marketing Mix ............................................................................................................................5
Porter's five forces.......................................................................................................................6
Herzberg Hygiene theory............................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Competitive strategy is defined as the long term plan for the particular company in order
to gain the competitive advantages. Thus, the business strategy is also the set of competitive
moves as well as action that mainly used to attract the customers and also attain the objectives in
better manner. In the same way, the present study also outlines how the business should be
carried out in order to reach the desired ends as well. The entire report is based upon the
Australian Supermarket and the chosen firm is Woolworth which is one of the well known
supermarket in Australia or a grocery store chain that is owned by Woolworths Group. The
report describe the business strategy for quoted firm using different theory and models.
MAIN BODY
Australian supermarket case
Australian Supermarket is helps in the growth of economy because it meet the demand
and needs of the customer in better way. In the same way, Woolworths also provide the best
grocery items to their customer at low rate. Moreover, the quoted firm also occupies 28.8 percent
of the market and this shows that it hold the top spot in Australia. In the same way, the business
strategy of Woolworths is to increase the sales and profit up to 10% in the next 12 months, so
that the business attain the further level of success too. Moreover, it is also analysed that quoted
firm also faces slow growth rate from last many years. That is because of high competition of
Australian supermarket. Therefore, there are different strategic issues that the company or the
market recently faced.
Strategic issues faced by the company
As from the secondary research, it is observed that Woolworths faces low in its profit
market and as a result, it faces different strategic issues as well. Such as the company has slow in
its consumer cycle, this leads to affect the business in negative way. On the other side, lower
Australian dollar also affect the supermarket business and this leads to lower down the sales.
Sometimes, for Woolworths, it product quality is also become an issue and this decrease the
customers base as well (Nasri and Ikra, 2017). Therefore, these issue generally creates a negative
impact upon the business and as a result, the financial performance of the entire company is
affected.
Therefore, to meet the aim and objectives of Woolworths, it is quite necessary for the
firm to analyse its internal business environment and this is done by using SWOT analysi.
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SWOT analysis
It is the strategic management tool that helps a firm to analyse the internal working
environment. Thus, it is as mention below:
Strength: Woolworths is one of the largest supermarket in Australia and it also
successfully executes the new project and then generated the good returns as well. In addition to
this, the company has more than 10000 employees and strong presence at global level. Quoted
firm also have several brand loyalty schemes for their regular customers (SWOT analysis of
Woolworths, 2018). There are different private labels brand which are also popular among the
customers and even it is one of the oldest company who introduce the modern retail model as
well.
Weaknesses: Company did not invest high amount on the research and development that
is why, it did not fulfil the needs and demand of their customers. On the other side, it also has
limited global presence as compared to its rivals. From last many years, the company did not
raise its sales and decline in its financial performance as well. As the firm has strong brand
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Illustration 1: SWOT analysis
(Source: SWOT analysis, 2017)

image but it did not offer online services to their customers which is consider weakness of the
firm (Ramdani and et.al., 2018).
Opportunities: Having a brand image, the company may easily uses effective
promotional tool such as advertising, promotion that helps to overcome the weakness. Further,
Woolworths may also open new stores in different geographic which can easily boost the
business and raise the profit margin as well. It should also invest in its research and development
department so that it will help a firm to produce the products as per their customers demand
(Konyk, 2016).
Threats: It faces though competition from their rivals and even the rising cost of raw
material creates direct impact upon the margin, thus, it is consider as a threat. On the other side,
the economic recession also affect the overall growth strategy, while it opening a store.
BCG Matrix
It is another strategic management tool that helps to analyse the positioning of the
strategic business unit and even it also help Woolworths to implement the business level
strategies for the business units (Mohajan, 2017). The tool is divided into four parts which are as
mention below:
Stars: For Woolworths, the financial service are the star in BCG matrix and even the
household commodities also represent an important segment for the company, because of the
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Illustration 2: BCG Matrix
(Source: BCG Matrix, 2018)

high market share and low market growth. Moreover, the Woolworths should also vertically
integrate by occupying other firm in the supply chain and this assist in earning more profit.
Cash Cows: For this, the supplier management services are cash cow and as the market
share of company is high, but on the other side, the overall market is declining as the companies
are manage their suppliers rather than outsourcing (Chiu and Lin, 2019). As Woolworths is
consider the market leader and it also provide an innovative products as well, which directly
influence the market. Thus, by investing in the research and development department, company
will grow and can easily turns the cash cow into star.
Question Mark: As the firm have limited market share and from last so many years, the
sales and profit also affected in negative way. That is why, it is recommended to the firm to use
market penetration under Ansoff growth vector matrix that helps a firm to make its product in the
existing market only. So that it will help a firm to become the cash cow and then a stars.
Dogs: Loss leader falls in the category of Dog and fro Woolworths, the plastic bags are
fall in this category. Moreover, the firm is operate in a market that is also decline due to having
lots of environmental concerns. On the other side, the artificially flavoured products are also
recently launched because with the increasing health consciousness, people also forbear from
consumption of artificial flavours. Thus, it also affect the business performance.
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Marketing Mix
Woolworths will develop marketing mix to accomplish the aim of increasing the sales
upto 10% in the coming 1 year. By developing the strategies the company will address the
purpose and will achieve the sales.
Product: Woolworths is dealing in 5 different categories of products and each product
line is separate. The company allows the customer's to choose according their taste and
preference. The company can add extra benefits for purchasing the product like warranty, after
sale services and helpline services etc. to enhance the customer's experience and eventually
increasing the sales of the company. Product packaging can be improved to make it more
convenient for the customers (Bahadir, Bharadwaj and Srivastava, 2015).
Price: Pricing strategy followed by Woolworths is competitive pricing strategy as the
data on competitors is available easily as there is large number of rivals in the market. The
company sell it' s product at a price higher than of competitors, as they provide more features.
The company should introduce discounts on occasions to increase the sales of the items.
Woolworths can use psychological pricing, where the company prices the product that just seems
lower, like price a product worth of $10 as $9, people will consider it to be less and will be
attracted to buy thus increasing the sales.
Place: Woolworths sell their products via two marketing medium. First one is direct
selling and second is the chain(from wholesalers to retailers to customers). Company has
captured over 500 retail stores in the country (Haider and et.al., 2019). The company should
open it's shop on social media where the company can use social media to increase the sales of
the products. The company should try to sell their products to large retailers that through by
personal selling. So that they van attract a large number of customer's, in this manner it can
ensured that Woolworths will increase it's sales by coming one year.
Promotions: The company use multiple media channels to advertise the product. IT uses
traditional channel like advertisement and radio. It is helpful in attracting a large number of
people. Woolworths should hire some bloggers or movie stars to promote their product. The
organization can include TV stars in commercial advertisements to influence the customer's. This
way sales can be increased.
People: The company has employees that working in the customer's service department,
and can be contacted in case of any issue the customer experience within the product. These
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people guide them to resolve their issues. Woolworths should focus on giving training to their
employees for sales force, purchasing people and customer service so that they provide value
services to the customers (Richards, Hamilton and Yonezawa, 2018).
Process: Woolworths always ensures that their products are always accessible at the
retail stores. The company has installed a system that notifies when the stock is low and needs a
refill. The company should constantly try and look for methods that will help in improving the
process as it will help in lowering the cost, that will lead to lowering the price of the products
and increase in the sales.
Physical Evidence: Woolworths has distinct colour packaging for it's product that makes
them easily identifiable on the shelves and more attractive so that it can easily influence the
customers to buy the product. The company should start collecting feedbacks from their
customer's regarding the packaging of the product so that they can improve it and eventually the
sales will increase.
Porter's five forces
Threat of new Entrants
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Illustration 3: Porter's five forces
(Source: Porter's five forces, 2018)

Threat of new entrants in food & Commodity retailing brings innovation, new ways of
doing things and which might put pressure on Woolworth by imposing lower pricing strategy,
reducing costs and providing new value propositions to others. New entrants firms generally also
creates competition challenges for the existing firms. In order to deal with this situations,
company has to adopt new strategies and build up the new effective barriers to safeguard its
competitive edge. There are some strategies recommended to Woolworth limited that helps
company to make strategies to gain sales volume by 10% such as by innovation of new services
or products it might help organisation to attract new customers or higher sales expectations.
Bargaining power of suppliers
Bargaining power of suppliers is low because of high availability of suppliers. But on the
same side, powerful suppliers can take advantage of negotiation power in order to extract higher
prices from the firms in food & Staples sector (Zhao and et.al., 2016). In order to sustained the
competitive edge Woolworth has to adopt some new productive strategies like to building up the
good relation with the suppliers or also developing the good attractive plans for suppliers to gain
the quality raw material for the product or services.
Bargaining power of buyers
Buyers are highly demanding in the retail sector which mostly are very complex for the
sellers to meet their expectations. This situations can occur challenges for the company. In order
to cope up with the risk Woolworth can offer some new exciting offers, modify new changes in
packaging of the products that helps to make customers happy and satisfied.
Threat from substitute products
This is the new threat for the company which occurred due to which customers get switch
their brand to other due to not satisfying with the existing brand. However, to cope up with this
challenges needs high attention towards the customer expectations and on quality that retained
the interest of buyers on the same existing brand (Mathooko and Ogutu, 2015).
Rivalry among the existing players
Existing competition between brand is the threat for the company which impact the
growth and sustainability aspect. Apart from that, it also create distances between the buyers and
sellers as well. Rivalry firms should have required to manage their competition level in order to
gain the effective business outcomes and approach to measure new business opportunities and
goals. Apart from that, rivalry among the existing players in an industry apart from many
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barriers. In order to overcome from this challenges it company should required to collaborating
forces Woolworth limited strategies that easily fulfils the long term existing policies and goals.
By building efficient supply chan multiple suppliers, and also makes the study more complicated
and building effective learning source (Lüttgens and Diener, 2016). Company can also
implement new positional working on their development and adopt new strategic position in
order to maintained the working goals and objectives. Such as sustainable differentiation,
competitive better environment and also can collaborating in order to increase the market size
rather than just competing for small market.
Herzberg Hygiene theory
It is also known as two factor theory that helps to analyse the soft aspect of the individual
in company. As the company wants to achieve higher growth in next 1 year, it is quite essential
for the firm to implement the strategy and then motivate the people who contribute to the team as
well. That is why, Herzberg Hygiene theory of motivation is used that states, there are some
factors which causes job satisfaction that is known as Motivating factors, on the other side, if the
motivation factors are not satisfied, it leads to dissatisfaction which is further known as Hygiene
factors (Alshmemri, Shahwan-Akl and Maude, 2017). For example, in order to attain the aim,
manager of Woolworths implement the strategy and develop a team that helps to achieve defined
aim. At that time, the hygiene factor such as Salary, Working condition, working environment
and security are unsuitable, then this make a person dissatisfied and unhappy.
On the other side, some motivating factors also increases the job satisfaction such that
they start realize their responsibility and it directly cause satisfaction. That is why, the company
should provide all the necessary hygiene factors in suitable conditions that helps to satisfied the
individuals and helps to attain the defined aim as well (Hur, 2018).
CONCLUSION
By summing up above report, it has bee concluded that Woolworths (Australian
Supermarket) faces different strategic issues and from last many years, the performance of
Woolworths is also decline, for that the business strategy is developed that is to raise the sales up
to 10% within 12 months. Further, the report also concluded that using SWOT analysis, the
company determine the internal environment and further, by using Porter five force model, the
company easily determine the competitive advantage as well that help a firm to attain the define
aim. Moreover, study also concluded that by using BCG matrix, the product portfolios are easily
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determined that helps Woolworths to identify which cause success and loss. Lastly, report uses
Marketing mix as a promotional strategy that assist to attract wide range of customers that
directly raise the profit.
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REFERENCES
Books and Journals
Alshmemri, M., Shahwan-Akl, L. and Maude, P., 2017. Herzberg’s two-factor theory. Life
Science Journal.14(5). pp.12-16.
Bahadir, S. C., Bharadwaj, S. G. and Srivastava, R. K., 2015. Marketing mix and brand sales in
global markets: Examining the contingent role of country-market characteristics. Journal
of International Business Studies. 46(5). pp.596-619.
Chiu, C. C. and Lin, K. S., 2019, July. Rule-Based BCG Matrix for Product Portfolio Analysis.
In International Conference on Software Engineering, Artificial Intelligence, Networking
and Parallel/Distributed Computing (pp. 17-32). Springer, Cham.
Haider, A. A., and et.al., 2019. Marketing Management.
Hur, Y., 2018. Testing Herzberg’s two-factor theory of motivation in the public sector: is it
applicable to public managers?. Public Organization Review.18(3). pp.329-343.
Konyk, O., 2016. MARKETING STARTEGY of AEGEE Brno.
Lüttgens, D. and Diener, K., 2016. Business model patterns used as a tool for creating (new)
innovative business models. Journal of Business Models. 4(3).
Mathooko, F. M. and 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),.pp.334-354.
Mohajan, H., 2017. An analysis on BCG Growth sharing matrix.
Nasri, R. and Ikra, M., 2017. Application of Cost Leadership and Differentiation Startegy to
Reach A Competitive Benefit (A Case Study Of “Fish Streat” Culinary Business). IMC
2016 Proceedings, 1(1).
Ramdani, D. and et.al., 2018. Business Growth Strategy: Collaboration-Literature
Review. Sustainable Collaboration in Business, Technology, Information and Innovation
(SCBTII).1(1).
Richards, T. J., Hamilton, S. F. and Yonezawa, K., 2018. Retail market power in a shopping
basket model of supermarket competition. Journal of Retailing. 94(3). pp.328-342.
Zhao, Z. Y. and et.al., 2016. Competitiveness assessment of the biomass power generation
industry in China: A five forces model study. Renewable Energy. 89. pp.144-153.
Online
SWOT analysis of Woolworths. 2018. [Online]. Available through:
<https://www.mbaskool.com/brandguide/lifestyle-and-retail/5745-woolworths.html>.
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