Situational Analysis of Woolworths’ Business Operations in the Australian Retail Sector

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Executive Summary
The Australian retail industry is recognized as highly reputable markets encompassing of
about 140,000 businesses performing their operations in this part. Nevertheless, the retail market
principally involves one of the few principal organisations functioning in the retail business. As a
result of oligopoly, major retail giants for example Woolworths make higher proceeds in contrast
to less significant companies. As a consequence, encompassing of nearby 31% of the market
portion in retail subdivision and has been dignified as one of the principal providers to the
Australian economy by producing $53 billion of Australian's GDP. Subsequently, its founding
Woolworths have accomplished to increase and transform with the purpose of revelling its
market stocks. It has mentioned that Woolworths developed as of first store in the world, which
introduced printed bills for its customers through cash registers. However, through range of
procurements Woolworths has achieved to expand rapidly by penetrating overseas markets and
conquering Australia as major percentage of retail sector. Conversely, reports have claimed that
with the entry of Coles in the Australian supermarket sector, Woolworths has been facing severe
competition to increase its market share. Moreover, in recent times, Woolworth has only one
strong contestant, Coles Ltd., besides it has been distinguished that because of demanding rivalry
among them, it has become extremely problematic for a new participant to enter into the
Australian retail sector. In addition, it has been claimed that oligopoly has invigorated the
suppliers to decrease their values, as there are a small number of consumers in the retail sector
and the corporations such as Woolworth can command their environments irrespective of their
barriers. However, one of the likely mediations is to capitalize on the retail market by supporting
farming and food production. The report has conducted a situation analysis of Woolworths’
business operations in the Australian retail sector and further evaluate its current situation related
to company’s key stakeholders organisational structures. In addition to this, the paper has

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provided inclusive insights and few recommendations for Woolworths to attain greater
competitiveness in the Australian retail industry.

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Table of Contents
Introduction......................................................................................................................................5
Discussion........................................................................................................................................6
Situational Analysis.....................................................................................................................6
PESTLE Analysis........................................................................................................................6
Political Factor.............................................................................................................................6
Social Factors...............................................................................................................................6
Technological..............................................................................................................................7
Legal............................................................................................................................................7
Environmental..............................................................................................................................7
Porters’ Five Forces Analysis......................................................................................................7
SWOT Analysis...........................................................................................................................9
Strengths......................................................................................................................................9
Weaknesses................................................................................................................................10
Opportunities.............................................................................................................................10
Threats.......................................................................................................................................11
Woolworths’ Organizational Structure and Key Stakeholders (Mintzberg theory)..................12
Stakeholder Analysis.................................................................................................................13
Strategy Formulation and Choice of Woolworths Australia.....................................................14
Recommendations..........................................................................................................................15

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Conclusion.....................................................................................................................................16
References......................................................................................................................................18
Appendices....................................................................................................................................21

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Introduction
The Australian retail sector is identified as one of the highly established markets
comprising of around 140,000 companies executing their operations in this area. However, the
retail market primarily comprises of one of the few leading organisations operating in the retail
industry. Owing to oligopoly, major retail giants such as Woolworths generates higher revenues
in comparison to smaller companies (Bailey 2017). Thus, comprising of around 31% of the
market share in retail sector and has been measured as one of the leading funders to the
Australian financial system by generating $53 billion of Australian's GDP. Since, its
establishment Woolworths has managed to expand and revolutionize with the aim of celebrating
its market shares. Bailey (2016) has mentioned that Woolworths developed as of first store in the
world, which introduced printed bills for its consumers via cash registers. On the other hand,
reports have claimed that with the entry of Coles in the Australian supermarket sector,
Woolworths has been facing severe competition to increase its market share. Moreover, in recent
times, Woolworth has only one strong challenger, Coles Ltd., and it has been noted that because
of demanding competition among them, it has become highly difficult for a new entrant to
penetrate into the Australian retail sector. Furthermore, studies of Sutton-Brady, Kamvounias
and Taylor (2015) have claimed that oligopoly has encouraged the suppliers to reduce their
prices, as there are few purchasers in the retail sector and the businesses such as Woolworth can
dictate their conditions regardless their barriers. However, one of the likely involvements is to
participate into the retail market by being supportive towards agriculture as well as food
production. The following report aims to conduct a situation analysis of Woolworths’ business
operations in the Australian retail sector and further evaluate its current situation related to