Opportunity Analysis of Woolworths Limited in India

RUNNING HEAD: OPPORTUNITY ANALYSIS
OPPORTUNITY ANALYSIS
Name of the Student:
Name of the University:
Author’s Note:

1OPPORTUNITY ANALYSIS
Executive summary:
Woolworths Limited is one of the largest business organisation In Australia. The management
team of this company is interested to expand its business. This report will conduct an opportunity
analysis through the internal environment analysis and external environment analysis. For the
internal environment analysis, SWOT analysis of Woolworths Limited will be done. For the
external environment analysis, a PESTLE analysis will be done in this report. This analysis finds
that Woolworth Supermarket has to do business in an intensely competitive environment in
India. However, this company has the opportunity to create a successful business in India as the
consumer of this country is interested in foreign products. By implementing online and offline
method this company can attract the large market of India.

2OPPORTUNITY ANALYSIS
Table of Contents
Introduction:....................................................................................................................................3
Company background:.....................................................................................................................3
Product, distribution and supply:.....................................................................................................3
Competitive Environment, Industry Situation Relative to Potential Opportunity...........................4
Strengths:.....................................................................................................................................8
Weaknesses:...............................................................................................................................10
Opportunities:............................................................................................................................10
Threats:......................................................................................................................................11
Strategic Fit Evaluation.................................................................................................................12
Conclusion:....................................................................................................................................12
References:....................................................................................................................................14

3OPPORTUNITY ANALYSIS
Introduction:
A leading supermarket chain named Woolworths is owned by the Woolworths Limited.
Headquarter of this company is in Australia. It can be said that more than 80% of the market
share of the grocery and food retail market in Australia is controlled by this company. This
report aims to conduct an opportunity analysis for Woolworths Limited. The management team
of this company is interested to expand its business in India. In this report, internal environment
analysis and external environment analysis will be done to identify the opportunity of the Indian
market. Due to the market size and its developing nature, India can be a good option for this
country to expand its business.
Company background:
Woolworths Limited is an Australian business organisation. In 1924, this company
started its business in the Imperial Arcade of Sydney (Woolworthsgroup.com.au, 2018). At
present this super chain market has a broad product portfolio which contains grocery, bakery
products, vegetables, toiletries, home furnishing, clothes, non-vegetarian products,
confectionery, footwear, and various other products. In Australia near about one thousand stores
are controlled by this company which includes convenience stores and supermarkets
(Woolworthsgroup.com.au, 2020). This company provides products with low price, exclusive
customer service and convenient shopping experience under one roof for its customers.
Product, distribution and supply:
Products of this super chain market are discussed in the previous paragraph. The supply
chain of this company manages distribution centres, packaging, barcode requirement, and
primary freight (wowlink.com.au, 2018). In the Australian market, this supermarket has 995

4OPPORTUNITY ANALYSIS
stores, 115,000 employees working in those stores and several distribution centres and support
offices (Woolworthsgroup.com.au, 2018). To continue its product supply, the management team
of Woolworths Supermarket collects 96% of all fresh fruits and vegetables and 100% fresh meat
from Australian farmer and growers (Woolworthsgroup.com.au, 2018).
Competitive Environment, Industry Situation Relative to Potential
Opportunity
In India, Woolworth Supermarket has to face competition from Big Bazaar, Reliance
Retail, and Spencer’s. To attract the potential customer of India, Woolworth Supermarket has to
provide extra benefits for its targeted customers. Several business organizations endorse the
home delivery process for customers. Woolworth Supermarket has to compete with Big Basket,
Grofers, Nature’s Basket, Amazon Pantry, and Flip kart Grocery, Zopnow, Spencer’s and
Reliance Smart. Competitors of Woolworth Supermarket ensure their presence both in the online
retail market and offline retail market. It is the nature of Woolworth Supermarket’s competitors.
The online retail market in India is mounted to an estimated 32.7 billion US dollars (Statista,
2019). This market is rapidly growing. Woolworth Supermarket can utilize the online retail
market as the government of India allows the 100 per cent FDI inflow (Statista, 2019). As there
are several business organizations are doing online retail business, it can be said that Woolworth
Supermarket has to face intense competition in the Indian retail market. As a leading business
organization, Woolworth Supermarket can implement the offline-online model for the retail
market of India. India is the second most populated country of this world. In 2018, the
population of this country was 1.353 billion (Data.worldbank.org, 2019). Some part of this
population prefer offline shopping and some part of this population prefer online shopping. The
trend of busing products from local shops can be potential difficulties for Woolworth

5OPPORTUNITY ANALYSIS
Supermarket. Ad this country is a developing country. The government of this country is
interested to improve infrastructure. Several business organizations are doing successful business
in the retail industry. That is the reason it can be said that adequate distribution infrastructure is
available in this country. So it can be said that by implementing online-and offline model
Woolworth Supermarket can achieve competitive advantage.
To enhance its market share this company has to expand its business globally. It can be
said that India can be a good option. Through PESTLE analysis several factors of this country
will be identified which can affect the business of Woolworths Limited (Ho, 2014). This analysis
will address the political, economic, social, technical, legal and environmental factors of India.
Political factors  Largest democratic country with political stability.
 Though President is the figurehead of this country yet he
does not have legislative power.
 Prime minister of this country is the controller of this
country.
 Political interference in the management activities has
reduced after introducing the privatisation.
 The Indian government can be characterised as the Federal
Republic (Asher & Novosad, 2017).
Economic factors  GDP of this country in 2018 was worth around 2.72 trillion
US dollars (Plecher, 2019).
 The corporate tax of this country is the lowest. At present,
the corporate tax for the existing company is 22% and for

6OPPORTUNITY ANALYSIS
new companies is 15% (Statista, 2019).
 FDI is introduced by the Indian government. The Indian
economy of this country is boosted by the FDI. This country
is one of the best destinations for FDI.
 An appropriate taxation system is followed in this country.
To do business in this country, a company has to pay certain
taxes which are corporate income tax, pollution tax, central
sales tax, property tax, social security contributions, and
others.
Social factors  This country is the second-largest most populated country.
The huge market of this country is a key attraction for the
business organization.
 Family structure is essential in this country. The 2000-year-
old caste system is followed in this country.
 The religious heritage of this country influences the business
of this country.
 Corruption is present in this country (Kumar & Sethi,
2016).
 Standard of living in this country is developing constantly.
The middle class of this country is improving with a better
disposable income.
Technical factors  Though this country is improving its technical infrastructure
yet it can be said that the technical improvement of this

7OPPORTUNITY ANALYSIS
country is not well enough.
 Due to its attractive market, technical giants are investing in
this country, which is beneficial for this country.
 The government of this country is interested to improve the
technical infrastructure. That is the reason the government of
this country is investing in R&D (Kumar & Sethi, 2016).
Legal factors  Supreme Court of this country controls the legal issues.
 To do business in this country, a business organization has
to follow the Companies Act 2013.
 A nosiness organization has to follow the labour laws and
taxation laws
Environmental factors  This country is facing problems like air pollution, diversion
of consumer waste in the river, water pollution, and loss of
biodiversity, floods.
 Rapid industrialization is creating an adverse impact on the
environment of this country.
 This country is facing the problem of climate change.
Temperature is increasing in this country.
 The government of this country is interested to promote the
use of renewable energy.
After conducting the PESTLE analysis, several important factors are identified which can
influence the business expansion procedure of Woolworths Limited. The market strength of this

8OPPORTUNITY ANALYSIS
country is the key attraction for this company. The middle class of this country has been
becoming economically strong. It can be beneficial for Woolworths (Greer, 2018). This company
has to utilise its strengths and opportunities to manage the obstacles of doing business in India.
To compete with the local retailer, this company has to prepare a proper strategic plan, which
will generate brand awareness.
Synthesis of Strengths Relative to Potential Opportunity
In this part, the internal analysis of Woolworths Limited will be done through SWOT
analysis. SWOT analysis, a recognised management framework, helps a business organization to
benchmark its operation, business performances (Gürel & Tat, 2017). This analysis identifies the
strengths and weaknesses, which are internal factors, opportunities and threats, which are
external factors. To achieve competitive advantage this analysis is beneficial for a business
organization. Woolworths Limited is one of the leading business organisation in the lifestyle and
retail industry. In this part, a SWOT analysis will be done to identify its internal and external
factors of this company.
Strengths:
 Indian have a positive attitude toward foreign products. As Woolworth Supermarket is an
Australian business organization, it can be said that foods coming from Australia can
attract the consumers of India. India is a developing country and Australia is a developed
country. Diplomatic relation of these two countries is good. It can be said that Australian
brands as a country of origin will create a positive impact in India.

9OPPORTUNITY ANALYSIS
 The Australian retail market is controlled by two companies which are Coles and
Woolworths. More than 80% market share of the Australian market is managed by
Woolworths Company (Knox, 2015). So it can be said that this company is the leader in
the Australian retail market.
 Appropriate segment penetration is followed by this company. To target the wealthy class
of Australia, the management team of this company maintains a well-stocked in upscale
brands. By introducing the private label brands, the management tea, of this company
started targeting the lower value segments (Woolworthsgroup.com.au, 2020). So this
company is successful to maintain its presence in both ends of the spectrum.
 The management team of this company is successful and well experienced in retailing,
they know how to run a successful chain of supermarkets. Core values followed by the
management team of this company care deeply, always do the right thing, and listen and
learn. The management team of Woolworth Supermarket endorse freedom within the
framework (Woolworthsgroup.com.au, 2018).
 The HR team of this company recruit the most diverse workforce and provides proper
training for the development of the employee. To satisfy the employee the management
team of this company provides sufficient salaries, bonuses and extra benefits
(Woolworthsgroup.com.au. 2018).
 Good customer tracking through social media analytics and business analytics tool is
maintained by this company (Knox, 2015).
 For promotion purposes, this company follows an aggressive strategy. For the promotion
purpose, this company use all types of medium to attract the customer. Value proportion
is prioritised by this company (Woolworthsgroup.com.au, 2018).

10OPPORTUNITY ANALYSIS
 As a leading business organization of Australia, Woolworth Supermarket focuses on low
price. Woolworth Supermarket prioritises value and innovation
(Woolworthsgroup.com.au, 2018).
Weaknesses:
 Confused positioning is a weakness of this company. By using the same products, the
management team of this company target various income segments which create
confusion among the potential customers.
 In comparison with its competitor, the global presence of this company is limited.
 By targeting both premium and value segment, this company is maintaining partial
behaviour to a specific market.
 To manage the competition with Coles, this organisation has to face price war.
 The growth of this company is restricted by enhancing the presence of online brands.
Opportunities:
 By focusing on customer experience, this company can enhance its business growth. To
differentiate with its strongest competitors, this company can provide the best customer
experience, which can be treated as an important opportunity. To do that the management
team of this company can introduce self-checkout, personalised service and products, AI-
based shopping support system, and loyalty schemes (Knox, 2015).
 Expanding the business in a new venture can help this company to increase its market
share and profit. As a leading business organization of Australia, this company has the
financial capability to expand its business globally. Several emerging markets like India,
China are growing. By expanding the business in those emerging market this company
can enhance its market share and profits (Woolworthsgroup.com.au, 2018).

11OPPORTUNITY ANALYSIS
 By following strategic acquisitions and franchise model, this company can enhance its
market share.
Threats:
 Excessive competition due to international business organisation can affect the business
growth of this company. There are several business organizations like Amazon Pantry,
Reliance Retail, Spencer’s and Flip kart Grocery, Grofers are already doing business in
the retail industry of India (Investindia.gov.in, 2018).
 The impact of the economic recession can hamper the business growth of Woolworths
Limited. Economic recession creates an impact on the purchasing capabilities of the
customer. Though India is the second most populated country yet economic recession can
hamper the buying power of Indian customer.
 The cost of raw materials for food and non-food products are increasing. It can affect the
profits of this company. Increase in the cost of raw material will force the Woolworth
Supermarket to reduce its profit margin (Knox, 2015).
 The customer demand is changing due to the enhanced awareness and concern regarding
health-related issues. For this reason, the management team of this company has to
modify its business operation.
So it can be said that the management team of this company utilize its strengths and
opportunities to manage threats and weakness. It will help the company to manage and prepare a
strategic plan to compete with its competitors.

12OPPORTUNITY ANALYSIS
Strategic Fit Evaluation
The online retail market in India has amounted to an estimated 32.7 billion US dollars
(Statista, 2019). This market is rapidly growing. Woolworth Supermarket can utilize the online
retail market as the government of India allows the 100 per cent FDI inflow (Statista, 2019). The
population growth rate of this country is 1.1% in 2017 (World Bank, 2018). India is the second
most populated country in this world. The consumer of this country has a fascination with
foreign goods. As Woolworth Supermarket is an Australian company it can be said that this
company can create its demand in the Indian market. Indian consumers are interested to buy
products from international retailers like Amazon Pantry (Investindia.gov.in, 2018). Woolworth
Supermarket has to ensure a high level of online penetration to compete with its competitor in
India. There are several business organizations like Amazon Pantry, Reliance Retail, Spencer’s
and Flip kart Grocery, Grofers are already doing business in the retail industry of India
(Investindia.gov.in, 2018). The market size of India, the number of customers, the attraction of
the Indian customer towards foreign products will be beneficial for Woolworth Supermarket to
enter the Indian market.
Conclusion:
This report can be concluded in this way that the management team of Woolworths
Limited can expand its business. It will help this company to enhance its market share and profit.
Though this company is the largest retailer in the Australian market yet to increase its revenue
this company has to expand its global presence. India can be a good destination for this
company. There are several opportunities for doing business in India. This company can ensure a
successful expansion in India by preparing an appropriate strategic plan. The management team
of this company has to prepare the plan based on the data found through internal analysis and

13OPPORTUNITY ANALYSIS
external analysis. It can be beneficial for Woolworths Company. To manage the competitive
market of India this company has to implement both offline and online model.

14OPPORTUNITY ANALYSIS
References:
Asher, S., & Novosad, P. (2017). Politics and local economic growth: Evidence from
India. American Economic Journal: Applied Economics, 9(1), 229-73.
Data.worldbank.org. (2019). India | Data. Retrieved 6 March 2020, from
https://data.worldbank.org/country/india
Greer, G. (2018). Win in India: An Analysis of Market Entry Strategy Into India’s Food and
Beverage Industry.
Gürel, E., & Tat, M. (2017). SWOT analysis: a theoretical review. Journal of International
Social Research, 10(51).
Ho, J. K. K. (2014). Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), 6478-6492.
Investindia.gov.in. (2018). Retail and Ecommerce In India - Investment Opportunities | Invest
India. Retrieved 4 March 2020, from https://www.investindia.gov.in/sector/retail-e-commerce
Knox, M. (2015). Supermarket monsters: The price of Coles and Woolworths' dominance (Vol.
6). Black Inc..
Kumar, R., & Sethi, A. (2016). Doing business in India. Springer.
Plecher, H. (2019). GDP of India 1984-2024 | Statista. Retrieved 26 February 2020, from
https://www.statista.com/statistics/263771/gross-domestic-product-gdp-in-india/
Statista. (2019). India - online retail market size 2015-2022 | Statista. Retrieved 4 March 2020,
from https://www.statista.com/statistics/759428/india-e-retail-industry-market-size/

15OPPORTUNITY ANALYSIS
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https://www.statista.com/study/48366/india/
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