Organizational Culture and the Structure of Woolworths

Running head: ORGANIZATIONAL STRATEGY OF WOOLWORTHS
ORGANIZATIONAL STRATEGY OF WOOLWORTHS
Name of the Student
Name of the University
Author Note

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ORGANIZATIONAL STRATEGY OF WOOLWORTHS
Executive Summary
The report is based on the analysis of the generic strategies, the culture of the organization
and the structure that has been implemented. The organization that is taken into consideration
is Woolworths which is an Australian organization that its operations in the retail sector. The
ways by which the company operates in the industry with the help of the Porter’s Generic
strategies is analysed in the report. The organizational culture and the structure is analysed in
the report. The discussion depicts that the culture and the organizational structure are
interlinked each other. The issues that were faced by the company were solved with the help
of changes in the organizational structure.

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Table of Contents
Introduction....................................................................................................................3
Generic strategy implemented by Woolworths..............................................................4
Organizational culture of Woolworths...........................................................................7
Formal structure of Woolworths..................................................................................10
Conclusion....................................................................................................................12
References....................................................................................................................14

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Introduction
Woolworths is an Australian organization which operates in the retail sector of the
country. The organization has acquired the second largest position in the retail sector of
Australia. Woolworths has also become a huge takeaway for the retail of liquor in Australia.
The first store of the organization was opened in Australia in the year 1924. The company
had started its operations with a capital of 185,000 Euros. Woolworths then went on to
become one of the largest organization in the retail market of Australia and has shown
immense growth in the next few years (Woolworths.com.au. 2018). The company started
growing from the year 1920 and opened a second store in Sydney which was followed by the
stores in Perth and Brisbane. Woolworths further opened a Big W discount based department
in the year 1970. The organization opened its variety stores by removing the variety products
from the supermarkets. The process of opening the online stores was completed in the year
1989 (Woolworths.com.au. 2018).
The organization currently operates more than 900 stores all over Australia and the
employee base consists of 115,000 members in the different areas of its operations.
Woolworths is known in the market for working closely with the farmers and the growers so
that they are able to provide the best products to the customers. The organization is famous in
the retail sector for the fresh products like fruits and vegetables that it offers to the customers.
This has given the title of “Australia’s fresh food people” to Woolworths. Woolworths has
thereby become one of the most innovative type of retailer in the Australian retail market.
The report will be based on the various strategies that have been formulated by Woolworths
for its operations in the market (Woolworths.com.au. 2018).

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Generic strategy implemented by Woolworths
Woolworths has been selling a diverse range of products which includes, clothing,
food, digital products and home ware. The company is also running a financial service in
joint venture with Absa Bank. The strategy of Woolworths is based on the mainly four focus
areas which are, the customers, the operations, the people and the good business journey.
 Woolworths has always aimed at becoming a customer-centric business
organization and has tried to analyse the needs and demands of the customers.
The two ways by which Woolworths has tried to achieve this objective with
the help of segmentation and analysis of the shopping habits of the customers
(Bell, Dyck and Neubert 2017).
 The organization has also planned to become a brand value-driven business
and has ensured that the brand and its values can be understood by the
customers.
 Woolworths has planned to build a strong and profitable relationship with the
customers with the help of their loyalty programmes. The programme will be
helpful for the customers to save money and they can be happy as they are
able to participate in the various business activities (Kaya 2015).
 The company wants to make the products available to the customers in its
stores all over the country. The major strategy of the company is thereby based
on making the shopping experience convenient for the customers and the
stores need to be made more visible.
 The organization aims at increasing the dominance of the general merchandise
and the products so that it is able to supply the same to the customers.
 The company has also aimed at expanding the operations in the offering of
information, products and the services (Salavou 2015).

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Woolworths has used generic strategies in its operations in the different part of
Australia. The company has been using some of the generic strate)gies suggested by Porter.
Porter has mainly suggested three different strategies or approaches which are, the cost
leadership strategy, the differentiation strategy and the focus strategy. The organizations aim
at gaining competitive advantage in the market with the implementation of one or more of the
generic strategies that have described by Porter (Liu and Atuahene-Gima 2018).
The cost leadership strategy is based on the process by which the company aims at
developing an edge over the other organizations with the help of low prices of the products.
The prices of products can be kept low with the help of low costs of production and the raw
materials that are required for production. This strategy is helpful for the organizations so that
they are able to maintain the topmost position in the market. The organizations are also able
to save on the amounts that are required to invest in the future growth with the help of the
low cost related to production (Moon et al. 2014).
The differentiation strategy mainly involves the services or products which are
different and more attractive as compared to the products that are offered by other
organizations. The success of differentiation strategy is based three major needs of the
organization which are, good research, innovation and development, ability of delivering the
best quality services and products and effective process of marketing and sales. The large
organizations can use differentiation strategy for the purpose of staying agile in the new
process of product development. This strategy helps the companies to stay safe from the
competition that is provided from the competitors in the industry (Walsh and Dodds 2017).
The focus strategy is used by the organizations which focus their activities in
specific areas of the market and customers to whom the products and the services will be
offered. The company thereby tries to build strong loyalty towards the brand by focussing its

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marketing activities in that particular area itself. The organizations which apply this strategy
tend to serve the customers in a better manner as compared to the other organizations or its
competitors in the market (Bayraktar et al. 2017).
Woolworths has used two of three generic strategies that have been suggested by
Porter which are, differentiation strategy and the focus strategy. The use of focus strategy by
the company is evident in the ways by which it focusses on the selling of food products and
clothes. The major focus of the company has been to sell the freshest vegetables and fruits
and meat products. The company has been collaborating its operations with the Australian
farmers and growers for the purpose of providing the high quality products to its customers.
The organization has implemented the differentiation strategy with the help of the
distinguished and different products that it offers to the customers (Chungyalpa and Bora
2015). Woolworths has also been selling its own products which have been effective in
gaining the market in the retail industry. The company is therefore able to provide the higher
quality products to customers at lower prices. This has been the result that has been obtained
by Woolworths in the retail industry of Australia (Alvesson and Sveningsson 2015).
Woolworths has been facing tough competition from Coles in the retail industry of
Australia. The two companies have engaged in fierce price related wars which have led to
increased burden for the suppliers. The low priced products that are offered by Woolworths
to the customers have been a reason behind the differentiation that has been created by the
company in the industry. The focus based strategy of Woolworths has been effective for the
promotional activities of the company. The company is focussing on the promotions of some
of the products which are targeted towards a particular group of people (Bortolotti, Boscari
and Danese 2015). The focus of the company on marketing related activities for the
customers belonging to a niche market have further enabled Woolworths to create a loyal
customer base. The organization has thereby provided tough competition to Coles by

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attracting the brand conscious customers and providing them with high quality services. The
major reason behind the commitment of Woolworths to promote the brand was based on the
high momentum of sales of the company from a particular part of the market. The
organization has also been successful in winning over the suppliers as they were supporting
the brands and also were promoting them in an effective manner. Market development is a
major strategy that has been implemented by Woolworths was related to the growth of the
company in the retail industry (O'Neill, Beauvais and Scholl 2016). The product development
related strategy is based on the ways by which Woolworths plans to formulate strategies
related to the increase of the number of products in the existing product line. The growth
strategy that has been implemented by Woolworths is based on the innovation related
activities of the organization. The company has been implementing new ideas in the services
and products which has enabled the successful growth (Valmohammadi and Roshanzamir
2015).
Organizational culture of Woolworths
The culture that is followed in Woolworths is based on the commitment of the
organization towards integrity and hard work. The organization has a down-to-earth type pf
culture which celebrates the family-friendly values. The senior leaders of the organization
had started the careers on the floors of the shop itself. The aspects of the business that is
conducted by the company is based on the taste and preferences of the customers. The
customers of the company are at the heart of the decisions that are made by the company. The
organization has always placed the customers at the first preference. This customer focus has
helped the company to serve more than 28 million loyal customers in a week (O’Reilly III et
al. 2014).

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The culture of the organization helps in the development of positive relationship with
the suppliers. The mutual trust that has been built among the company and the suppliers is the
major reason behind the successful relationship that has been built by the company. The
partners or the vendors of Woolworths are always free to provide their opinions related to the
issues that they in the work process. Woolworths goes up to large extent to provide the
products that are demanded by the customers. The stores of the company are thereby always
stocked with huge number of household brands. The Woolworths has formulated a three-year
strategy which is based on the complete transformation of the operations of the company
(Körner et al. 2015).
The organization aims at creating a customer-first culture which can help
Woolworths to neutralise the customers. The strategy of the company will be mainly focussed
on three areas which are, improving core offers, innovating the products and services
provided to meet the needs of the customers. The company is aiming at changing the culture
of work with the help of the lean retail model that has been implemented in various
processes. The experience that can be provided to customers is the most important part of the
culture that is followed in Woolworths. The most notable component of the strategy is to
ensure the ways by which the employees can be measured with respect to their performance
in the company (Baker, Lichy and Stokes 2015).
The customer-first system has been implemented in all the parts of the culture of
Woolworths. Additional 58,000 hours per week have been implemented in the customer
service sector of the company. A new and improved loyalty system was implemented in the
existing culture of the company. The customer insights tool has been used by the company to
focus on their needs and demands. The organization has also developed a new division which
is named as Woolworths Food Co. for the purpose of developing the new categories of
products and improving the supply and processing of the relationships with the partners

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(Xenikou 2017). The main strategy that was applied in the company was based on the
concept related to lower prices and the best services provided to the customers. The service
provided to the customers is also a part of the culture that is followed by the organization.
The management team of Woolworths Group has been reshuffled and the culture of
the company has been changed after the rearrangement of the employees. The issues in the
culture of Woolworths were revealed by the new chief executive of the company. According
to him, the hierarchy and process of the company is more important than the actions and the
decisions. The main promise which was made by the new CEO was based on the reduction of
costs related to the various organizational processes. The retail company has been squeezed
by the competition in the market and the online retailers as well (Ashkenas et al. 2015).
The company has faced challenges based on the bullying related activities that were
experienced by the employees. The security that is provided to the customers is high and the
employees do not wish to change the job drastically. However, the workers were quite
stressed and the customers suffered due to the lack of commitment of the employees. The
former NSW employees have also claimed that they did not wish to work for the company
anymore. The culture of the organization has been affected by the changes that have taken
place in the internal environment. The management at the stores and the organizational skills
were not up to the mark which has further led to complaints raised by the customers
regarding the various organizational processes (Van der Voet 2014).
The lists of tasks that was set by the management for the staff was not well defined
and they were always confused regarding the jobs that are required to be performed. The
workforce of the organization is diverse in nature and consists of employees belonging to
different areas and with different backgrounds. The company has been awarded an
impressive score based on the work process that is followed in the organization in spite of the

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ORGANIZATIONAL STRATEGY OF WOOLWORTHS
issues that have been faced by the company in the work process (Neubert, Hunter and
Tolentino 2016).
Formal structure of Woolworths
The hierarchical structure of business is followed by Woolworths. The company has
always followed the hierarchical process of the arrangement of employees. The top
management team controls the entire operations of the company in the different stores of the
company all over Australia. The tasks that need to be performed by the employees were
decided by the management and employees needed to follow the same. The senior
management team f Woolworths had however faced many changes in the year 2015 after
issues that were being faced by the company and the employees were revealed (Strese et al.
2016).
The company demanded to be customer centric in nature, however, the various
decisions related to services to be provided to the customers were taken on a hierarchical
basis which had further led to high amounts of dissatisfaction among the employees and the
customers. The complaints that were raised by the customers had hurt the image that was
developed by the company in the industry. The organization had thereby decided to bring
changes in the management structure for the purpose of restoring the sales of the company.
Woolworths had been facing the exodus that was based on the decisions that were being
taken by the top management of company (Král and Králová 2016).
The structure of the company was being changed for the purpose of restoring the
sales and growth of the earnings. The director of customer experience of the company had
left after the resignation of the general manager for marketing. The departure of the members
of the top level managers further led to the changes that were made in the organizational
processes. The spokesperson of the company had revealed that the company had planned to

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invest the savings in the cost reduction based activities for the products and services that were
provided to the customers. The company has also aimed at increasing the growth of sales that
had occurred due to the issues in the management (Worley and Doolen 2015).
The major factors that are being reviewed by the company are mainly the marketing
activities, the customer loyalty based activities and the data analytics. The company has
thereby attempted at shaking the culture and the entire structure of Woolworths. The core
replenishment and buying teams of Woolworths have been restructured by Claire Peters, the
boss of Woolworths. This step has been taken for the purpose of creating a lead among the
other big players in the market. The new structure that has been formulated by Woolworths is
mainly based on the shift of the responsibilities that have been performed by the management
team of the company (Hoffmann 2016).
The reshaping of the management of the company has been one of the major strategic
moves that has been made by the boss of Woolworths. The company has thereby aimed to
increase its sales as compared to the competitors in the market like Coles and Aldi. The
organization is framing the structure which is easy to work with. The top management of
Woolworths has started working as a team for the purpose of achieving the goals that are
related to the service that needs to be provided to the customers (Worley and Doolen 2015).
The change of structure of the company has thereby been helpful for the proper functioning
of the company in the retail sector of the country.

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Figure 1 – Source - (Woolworths.com.au 2018)
Conclusion
The analysis in the report has depicted that the generic strategies that ae implemented
by the business organizations are based on the environment in which they have their
operations. Woolworths has used two of the Porter’s generic strategies which has helped the
company to create a position in the retail industry of the country. The culture and the
structure of the company is interlinked and has been implemented in such a manner which
can help in the proper implementation of the strategies. The company has however faced
some major issues that are related to the traditional structure. The new management team of
Woolworths had thereby aimed at changing the structure of the company so that the
customers can be served in the best way. The change in structure had led to the increase in
the growth of the company in the retail sector of Australia. Woolworths was thereby able to

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increase its sales and competitive advantage in the market with the new and improved
strategies.

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