Macro Analysis of the Woolworths Group

Running Head: MACRO ANALYSIS OF THE WOOLWORTHS GROUP
Macro Analysis of the Woolworths Group
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MACRO ANALYSIS OF THE WOOLWORTHS GROUP1
The company Woolworths is a grocery and retail business company. The Woolworths is
the largest company in Australia. This company has further extended to New Zealand. The
company was established in the year 1924, the market share of the company is 40% in the
country of Australia and the rank of the company is 2nd among the 2000 retail companies in the
country of Australia (Arli, et al., 2013). In the year 2016, the number of employees working in
the company was 205,000 and the number has increased ever since (Hattersley, 2013). The
grocery industry is one of the biggest employment providers in the world. At present, the
Australian grocery industry is quite competitive since the company Aldi has entered the grocery
industry market. The company Aldi has posed a serious threat to the Woolworths. They have
new pricing strategy which has become the biggest threat to the Woolworths. However, the
company Woolworths has not yet been affected by the pricing strategy of the Aldo. This essay
will analyze the macro environmental factors that affect the company Woolworths.
The economic, political, social, technological, legal and environmental factor has impact
on the macro environment of Woolworth Company. Any changes that occur in the macro-
environment have a direct impact on the Woolworths sales. The changes in the macro
environment can have an impact on the competitive advantage or overall profitability of the
company.
PORTER’S FIVE FORCES
The five forces of Porter’s is tool that analyses the current situation and performance of
the company (E. Dobbs,2014). The areas that are included in this analysis are:
Bargaining Power of the buyers: In the merchandising trade of Australia, customers have a wide
range of products to choose from (Nwagbara & Reid, 2013). It is because of the varied number

MACRO ANALYSIS OF THE WOOLWORTHS GROUP2
of choices and options that the customers have that increases the bargaining power of the
customers. With new food retail companies entering the market the company is facing a lot of
competition. The bargaining power of the company has significantly increased because of the
presence of smaller companies like the Aldo’s. The presence of these new companies has given
more power to the customers.
Bargaining power of the Suppliers: There is a lot of competitiveness among the suppliers of
Woolworths; hence, the suppliers of the company have a high bargaining power. Further the
changes in seasons affect the food industry.. In case of the reduction of the supply due to the
changes in the season, the suppliers usually have the majority of the power. The company needs
to find another ways of finding their supplies as the suppliers of the company have a lot of
bargaining power.
Threats of New Entry: New retail food stores that want to enter the market because of the
presence of the large companies have already dominated the market. Hence the threat that is
posed by the new entrants is not as high. Hence to a company like the Woolworth the threat of a
entrant is less, but a company like the Aldi does have a lot power over the market, and has been
creating quite a lot of problems. This is the only new entrant that has affected the productivity of
the company. Perhaps the sales of the company could have increased if the new company would
have not shared the market.
Rivalry among the Existing Firms: The main competitors of Woolworths are the companies of
Aldi, Asda among others. They usually contest for more market share and makes it apparent that
the company is facing some rivalry when it comes to new companies. The profitability of the
company has decreased because of the customer base shifting to these new companies.