Risk Management Initiatives for Woolworths Supermarkets

This report discusses the risk management initiatives undertaken by Woolworths Supermarkets, an Australian supermarket chain. It identifies and analyzes the risks faced by the organization, such as lack of international presence, competition, and regulatory issues. The report also prioritizes the risks and suggests action plans for smooth functioning.

Running head: RISK MANAGEMENT INITIATIVES
RISK MANAGEMENT INITIATIVES
Name of the student
Name of the university
Author note

1RISK MANAGEMENT INITIATIVES
Table of Contents
1. Company Overview.....................................................................................................................2
2. Consultation and Communication...............................................................................................2
3. Identification and analysis of Risks.............................................................................................5
3.1 Establishment of the Context and Identification of Risks.....................................................7
3.2 Risk Identification.................................................................................................................8
3.3 Risk Analysis, Evaluation and Prioritisation.......................................................................11
3.3.1 Identification of risks....................................................................................................11
3.3.2 Explanation of risks......................................................................................................12
4. Risk Register Plan......................................................................................................................13
Action Plan....................................................................................................................................20
Monitoring plan.............................................................................................................................21
References......................................................................................................................................23
Appendix........................................................................................................................................25

2RISK MANAGEMENT INITIATIVES
1. Company Overview
The concerned organization for the report is Woolworths Supermarkets which is an
Australian supermarket chain owned by Woolworths Limited. The organization was founded in
the year 1924 and since then the modifications in the organizational offerings has helped the
same in maintaining the efficacy of the operations. The concerned organization undertook a
duopoly with Coles, which constituted of around 80% of the Australian retail markets (Aven
2016). The diverse range of offerings of the organization (groceries, DVDs, health related
products, household products, baby products and stationery commodities) has helped the same in
adhering to the needs of wide range of customers in the market. On the other hand, the
modifications in the line of product offerings of the business have helped the same in
maintaining the efficacy of the operations.
The concerned organization currently holds around 1000 stores, 976 supermarkets and
around 19 convenience stores in order to support their smooth functioning in the different
regions of the Australian markets (Creeden et al. 2013). Diverse range of technological
innovations that are undertaken by the organization has helped the same in upholding the
competitive advantage of the same. The revenue of the organization was calculated to be A$
56.726 billion as was computed by the end of the fiscal year 2018 (Aven 2016). The different
aspect of change that is undertaken by the organization has helped the same in maintaining the
efficacy of the operations of the same while operating in diverse regions of Australian markets.
2. Consultation and Communication
Stakeholder Role Stakeholder’s agenda for Risks

3RISK MANAGEMENT INITIATIVES
Suppliers The suppliers of the
organization plays a major role
in upholding the smooth
operations of the business
The agenda of the suppliers is to
provide the organization with
information on the inventory of raw
material and finished products
Employees The employees of the
organization helps in
facilitating the smooth
functioning of the processes
that are planned by the
management for supporting the
competitive advantage
(Seuring and Gold 2013)
The employees undertake the
collaborative operations of the same
in order to meet their individual
targets for avoiding the risks
(Loorbach and Wijsman 2013)
Shareholders Shareholders of the
organization aim at providing
the business with financial
resources for the smooth
functioning of the Woolies.
The total holdings that are
undertaken by the shareholders
contributed to the revenue
The profitability of the business is
one of the guiding force that
influences the shareholders of the
business

4RISK MANAGEMENT INITIATIVES
streams of the corporation.
The Government The regulations that are framed
by the government in the
nation help the organizations in
guiding their activities. On the
other hand, the government of
the nation plays a major role in
supporting the activities of the
organization in the homeland
as it helps in enhancing the
economic position of the
nation (Armstrong, Cools and
Sadler‐Smith 2012).
The government’s agenda is to
impose different regulatory
frameworks in order to minimize the
financial and other risks that might
be faced by the business
Investors The investors support the
business of Woolworths
through capital investments.
The capital investments helped
the organizations in
maintaining the efficacy of the
operations
The agenda of the investors are based
on the profitability of the
organization. Profitability of the
organization is one of the major
priorities of the investors as they
invest their capital on the venture.

5RISK MANAGEMENT INITIATIVES
The organization currently undertook AUS 2005; 113 risk management method, which
helped the same in identifying the risks, and thereby allocate preferable resources as per the
criteria. The organization is planning to undertake different communicative measures through
meetings with the stakeholders for transmitting all the important information on different
changes that are planned by the business for avoiding certain risks. The risks that are faced by
the concerned organization is based on the lack of international presence of the same. Franks et
al. (2014) stated that the globalization has offered the organizations in making aggressive
expansion in the different international markets. Currently the organization undertook
consultation with the board members before implementing a change. The risks in the
organization are assessed as per the research of its undertakings in the different markets.
However, the organization is planning to undertake the rational decision making process in
order to assess the risks and thereby implement different changes in the processes. The
organization undertakes consultation with different consultancy organizations and the
stakeholders that are well aware of the market situations and negotiate with the same.
3. Identification and analysis of Risks
The risks that are faced by the organization are based on the quality of the undertakings.
The key elements of change that are undertaken by the organizations are based on the
identification of the risks and the manner in which they might be mitigated in order to facilitate
the smooth functioning. Paape and Speklè (2012) stated that the culture of the organization helps
in understanding the risks that might be faced by the same while operating in diverse economies.
The concerned organization, Woolworths, has taken steps to prioritize the customers over the
other stakeholders in order to maintain the sustainability of the same. The organization is
certified with the ISO quality assurance, which helped the same in retaining the loyalty of the

6RISK MANAGEMENT INITIATIVES
customers. Currently the organization identifies, analyzes, evaluates and ranks, treats and
monitors the risk for facilitating the smooth functioning of the processes. However, the lower
international presence of the organization has affected the wider customer base of the business.
Woolworths operates in the different regions of Australia. The organization did not take any step
for expending in the other economies, which limited their customer base within the regions. On
the other hand, the new entrants in the retail; industry and the threat of the substitute products
resulted to risks relating to the sustenance of the business. Hofmann et al. (2014) stated that the
fluctuations in the global economies also pose a serious threat to the organizational operations.
The risks that are encountered by the concerned organization has affected the performance of the
same in the relevant market sections.

7RISK MANAGEMENT INITIATIVES
Figure 1: The progress made by Woolworths as per the identified risks
(Source: Bromiley et al. 2015)
3.1 Establishment of the Context and Identification of Risks
Political Technology
 The political pressure towards a
duopolistic retail markets has restricted
the functioning of the business. The
unstable political situation of the
Australian markets has affected the
objective of uninterrupted functioning of
 The introduction of SAP based
technology in the retail markets has
enhanced the competition in the
duopolistic markets.
 The technological innovations in
retail markets have helped in

8RISK MANAGEMENT INITIATIVES
the business in the different market
sections in Australia.
enhancing the rate of competition in
the markets.
Economic Environmental factors
 The free trade policies of the
organization have enabled the
growth of the new entrants in
the Australian markets.
 The environmental regulations that
are induced by the Australian
government have restricted the
smooth functioning of the
organizations.
Social issues Legislation
 Poor relation with the suppliers and
other stakeholders of the organization
has affected the smooth functioning
objectives of the same.
 The legal issues with ACCC
(Australian Competition and
Consumer Commission) have
restricted the activities of the
organization relating to expansion in
the duopolistic retail market situation
(Vilko and Hallikas 2012).
Competitors Other
 The different competitors of the  The other issues that are

9RISK MANAGEMENT INITIATIVES
business are Aldi, Amazon, eBay,
Coles Group, Walmart and Tesco. The
competitors of the business have
affected the expansion objectives of the
same while operating in the different
parts of Australia.
faced by the organization are
based on the lack of proper
communication with the
customers, which has
restricted the designing and
marketing capabilities of the
same.
3.2 Risk Identification
 Strengths Weaknesses
 Well known brand image of the
organization
 Wider range of products and services
 Efficacy in the CSR activities of the
organization has helped the same in
gaining the trust of communities (Kern
et al. 2012)
 Enhanced quality of the products and
services offered by the organization has
helped in retaining the loyalty of the
customers
 Lack of suitable international presence
and marketing capabilities of the
organization
 The growing competition in the
Australian retail industry has affected
the processes of the business
Opportunities Threats

10RISK MANAGEMENT INITIATIVES
 The growing potentiality of the
developing economies might assist the
organization in undertaking expansion
 The organization might provide the
customers with better promotions in
order to retain the loyalty of the same
while operating in different economies
 The organization might undertake
social media integration initiatives in
order to maximize the customer
engagements (Colicchia and Strozzi
2012)
 The heavy loss of customers by the
end of the financial year 2017 has
affected the business processes that
are planned by the same.
 Aldi’s aggressive expansion in the
different parts of market has affected
the competitive edge of the concerned
business venture (Alhawari et al.
2012).
 The slow growth of the online retails
in the Australian markets has
restricted the growth of the
organization while operating in the
diverse regions. The slow growth of
the industry has also restricted the
demand that is faced by the business.
 The new entrants in the Australian
retail markets have affected the
growth of the concerned business.
 The threat of substitute products has
resulted to switching customers, which
affected the profitability of the venture
while operating in the Australian

11RISK MANAGEMENT INITIATIVES
markets.
As per a report, the petrol pumps owned by Woolworths and Coles were affected through
a allegation by the Chairman of ACCC against the petrol shopper dockets, as the scheme was
believed to hurt the interests of many fuel retailers (Ghadge, Dani and Kalawsky 2012). The
intervention of the ACCC restricted the smooth functioning of the concerned organization due to
enhanced competitiveness. On the other hand, introduction of ERP (Enterprise Resource
Planning) systems in the organizational processes helps in maintaining the efficacy of the
operations that are undertaken by the organizations. The ERP technology has helped the
organizations in facilitating inventory management. Inventory management of the organization
helps in maintaining the smooth functioning of the supply chain operation as per the priorities.
However, regulations relating to the reduction of the carbon foot prints and emissions has
maximized the costs that are incurred by the concerned organization while operating in diverse
regions of the Australian markets. The implementation of different monitoring and emission
controlling devices has resulted to maximization of the operating costs of the organization.
Alternatively, lack of suitable collaboration with the stakeholders like the suppliers and the
distributors has affected the supply chain and logistics department of the concerned business.
The different environmental regulations have restricted the smooth functioning of the businesses
while operating in diverse international markets. Therefore, the different issues that are faced by
the organization restricted the smooth functioning of the same to support the objectives of
sustenance.

12RISK MANAGEMENT INITIATIVES
3.3 Risk Analysis, Evaluation and Prioritisation
3.3.1 Identification of risks
The risks that are faced by the concerned organization are:
1. Marketing risks
2. Risks relating to regulations
3. Lack of adequate stakeholder participation in operations
4. Lack of proper communication
5. Resource insufficiency
6. Lack of understanding the demand faced by the organization
7. Lack of proper health and safety measures
8. Fluctuations in the global economies
9. The decreasing quality of the products and services
10. The failure of the operating process planned by the organization
3.3.2 Explanation of risks
The operations that are undertaken by Woolworths are restricted to the definite regions of
the Australian markets. It has affected the growth of the organization in maintaining their
efficacy of holding a large customer base. Moreover, the lack of international presence of the
organization has affected the capability of the same while operating in diverse international
markets. The chief modifications that are undertaken by the organization are dependent on the
prioritization of the needs of the customers. However, the new entrants in the retail markets has
restricted the operations of the same as the customers switched to the substitute products offered
by the competitors in a lower price (Wieland and Marcus Wallenburg 2012). Lack of suitable

13RISK MANAGEMENT INITIATIVES
marketing operations of the concerned business has restricted the promotional activities of the
same. The organization prioritizes the customer concerns as their major objective in order to
adhere to the changing needs of the same. However, lack of international presence has affected
the organizational activities and retention of large customer base. The enhanced competition that
is faced by the organization in the retail industry is due to Aldi’s aggressive expansion in the
different market sections. It has provided the concerned business with lower scopes of expansion
in the different market sections.
The organization also faced different issues while operating in a duopolistic retail
mar4ket as the ACCC has levelled charges against the organization relating to the increased
competitiveness and price hikes. The organizational operations has affected the interests of the
different other businesses in the Australian markets. The growing concern of the organization in
making its expansion in the Australian markets is dependent on the regulations that are imposed
by the ACCC. Wu, Chen and Olson (2014) stated that the ACCC has restricted the operations
of Woolworths in Australian markets for promoting the growth of other businesses and to uphold
the concerns of corporate ethics. Therefore, the organization faced different risks with higher
likelihood of affecting the operations while expanding their venture in the Australian markets.
4. Risk Register Plan

14RISK MANAGEMENT INITIATIVES
Risk Register Part A. Risk register: (Woolworths)
Function (activity e.g. department): Compiled by: Date:
Date of risk review: Reviewed by: Date:
Risk
Reference
(unique
identifier
code)
What is
the risk?
(Risk)
What
can
happen
?
(Event)
How can
it
happen?
(Cause)
What can
happen?
(Consequenc
es/level of
impact)
Current
control
strategi
es
A
(Adequ
ate)
M
(Moder
ate)
I
(Inadeq
uate)
Current risk level
analysis Risk
priorit
y
(refer
to risk
matri
x and
attach
matri
x in
appen
dix)
Acceptability of Risk
A (Acceptable) or
Tre
at
Ris
k
Ye
s
or
No
Likelihood
Consequences
Level
MAR01
Marketin
g risks
Lack of
proper
awarene
ss
among
the
custome
r groups
Lack of
suitable
communicat
ion
mediums
chosen by
the
organizatio
n
1. Failure of
expansion
strategies
2. Failure to
retain the
customers
Moderat
e
Almost certain 80% /
catastrophic $
1.5million< 0.5%
2 A yes
REG01 Risks
relating
to
regulatio
Breakdo
wn of
operatio
ns
Loss of
flexibility in
operations
Breakdown
of operations
Inadequa
te
Likely 65% / major $ 85
Billion < 0.7%
1 A yes

15RISK MANAGEMENT INITIATIVES
ns
STAKE01
Lack of
adequate
stakehold
er
participa
tion in
operation
s
Process
breakdo
wns
Loss of
collaborativ
e approach
Process
breakdowns
moderat
e
Likely 52% / moderate $
90 billion < 1.2%
1 UA Yes
COMM1 Lack of
proper
communi
cation
Process
breakdo
wn
Miscommu
nication in
the
different
department
s
Process
breakdown
moderat
e
Possible 42% /
moderate $ 1million <
0.23%
3 A Yes
RES02 Resource
insufficie
ncy
Supply
chain
breakdo
wn
Lack of ERM
practices
Supply chain
breakdown
Adequat
e
Likely 56% / moderate
$92 billion < 0.42%
2 UA Yes
MARRES02 Lack of
understa
nding the
demand
faced by
the
organizati
on
Inability
to
design
processe
s
Lack of
proper
market
research
Inability to
design
processes
Inadequa
te
Unlikely 26% /
moderate $ 87 billion <
0.5 %
1 A Yes
HEALTH04 Lack of
proper
Compro
mised
Inability of
the
Compromise
d health and
Moderat Rare 15% / minor $ 47 2 A Yes

16RISK MANAGEMENT INITIATIVES
health
and
safety
measures
health
and
safety of
the
workforc
e
workforce
to
undertake
smooth
functioning
safety of the
workforce
e billion < 0.4%
FLUCTUATIN
GECO01
Fluctuati
ons in the
global
economi
es
Affects
the
profitabi
lity of
the
venture
Expansion
in the
diverse
economies
without
proper
knowledge
of the
economic
condition
Affects the
profitability
of the
venture
Inadequa
te
Unlikely 30% / minor $
45 billion < 0.2%
1 A Yes
QUALITY04 The
decreasin
g quality
of the
products
and
services
Decreasi
ng
custome
r loyalty
Lack of
quality
monitoring
systems
Decreasing
customer
loyalty
Moderat
e
Rare 9% / insignificant $
23 billion < 0.1%
2 UA Yes
OPERATION
AL01
The
failure of
the
operating
process
planned
by the
organizati
Minimiz
ation of
organiza
tional
producti
vity
Lack of
proper
planning
Minimization
of
organization
al
productivity
Adequat
e
Rare 12% / insignificant
26 billion < 0.2%
3 UA Yes

17RISK MANAGEMENT INITIATIVES
on

18RISK MANAGEMENT INITIATIVES
Risk Register Part B. Risk register: (Woolworths)
Risk Reference
(unique identifier
code)
Potential
treatment
options
Person
responsible for
monitoring the
risk
Cost to
implement
risk
treatment
Time frame
to
implement
treatment
Monitors to
measure the
effectiveness of the
risk treatments
Treatment
of Risk
Complete
Yes or No
MAR01
1.Social media
integrations
2. Establishing
suitable marketing
communications and
promotions
Marketing
manager
$4.5 million 7- 8 months Increasing customer
base of the
organization
Receptive nature of
the consumers in the
different economies
No
REG01 1.Flexibility of
operations
Internal auditor $1.5 million 7- 9 months Smooth functioning
of the organization
in the Australian
markets
Yes
STAKE01
1.Facilitate
stakeholder
engagement
programs
PR executives $2.5 million 1 – 5 years Collaborative
functioning of the
stakeholders as per
the needs of the
organization
Yes
COMM1 1. Establishing a
sound
communication
system
IT manager $3 million 1- 3 years Enhanced
communication with
the stakeholders
No
RES02 1. Setting up an
ERM (Enterprise
resource
management)
Operations head $ 5 million 2 years Suitable resource
allocation and
inventory
Yes

19RISK MANAGEMENT INITIATIVES
system management
MARRES02 1. Establishing a
team of market
research
IT and
communication
$ 2 million 3 years Identification of the
demand and
concerns of the end
level consumers
No
HEALTH04 1. Creating
regulations relating
to health and safety
of the employees
Legal advisor $ 1.5 million 1.5 years Smooth functioning
of the workforce
No
FLUCTUATINGECO01 1. Establishing
R&D
Marketing
department
$ 3.7 million 3 years Undertaking
investments in the
profitable
economies
No
QUALITY04 1. Quality control,
and monitoring
systems
Quality control $ 2 million 2 years Enhanced quality of
products and
services
Yes
OPERATIONAL01 1. Proper planning Process designers $ 1.7 million 3 years Minimization of
operational failures
No

20RISK MANAGEMENT INITIATIVES
Action Plan
Goals Actions Timeframe Relevant
stakeholders
Digital
marketing
 Research of the market situation
 Investigating costs of implementing
software implementation
 Implementing the process
7- 8
months
IT managers
Framing
flexible
regulations
 Identifying the market concerns
 Meeting with board of directors
 Implementing changes in the policies
7- 9
months
Auditors and
government
agencies
Facilitate
stakeholder
engagement
programs
 meetings with the stakeholders 1 – 5 years PR executives
Establishing a
sound
communication
system
 Research of the market situation
 Investigating costs of implementing digital
communication technologies
 Implementing the process
1- 3 years IT manager
Setting up an
ERM
(Enterprise
resource
management)
 Research on cost of implementation
 implementation
2 years Operations
head and
internal
auditors
Establishing a
team of market
research
 meetings with the board members
 recruiting experts
 creation of team
3 years IT and
communication
Creating
regulations
relating to
health and
safety of the
employees
 research on the market situation
 creating regulations as per the standards set
by the ISO
1.5 years Legal advisor
Establishing
R&D
 Recruiting engineers and specialists
 creating the R&D team
3 years Marketing
department

21RISK MANAGEMENT INITIATIVES
Quality
control, and
monitoring
systems
 Monitoring the processes
 Creating frameworks for
quality checks
2 years Quality control
Proper
planning
 consultation with the experts
 meetings and consultations
 planning as per the assessment of the
capabilities and competencies of the
organization
3 years Process
designers
Monitoring plan
Goals Person
maintaining
the risk
register
Frequency of
reviewing the
plan and the
register
Frequency of
reporting
progress
Person
reported to
Frequency of
reporting
Digital
marketing
Marketing
head
Every 2 weeks Once a week Risk manager Quite often
Framing
flexible
regulations
Auditors and
legal advisory
board
1 month Twice a month Risk manager Often
Facilitate
stakeholder
engagement
programs
PR manager 3 months Once in three
months
Risk manager Rare
Establishing a
sound
communication
system
IT manager 5 months Twice a month Risk manager Rare
Setting up an
ERM
(Enterprise
resource
management)
Logistics and
supply chain
manager
3 months Twice a month Risk manager Quite often
Establishing a
team of market
research
Market
research
manager
Every 2 weeks Once a week Risk manager Often
Creating Policy makers 3 months Thrice a month Risk manager Quite often

22RISK MANAGEMENT INITIATIVES
regulations
relating to
Health and
safety of the
employees
and auditors
Establishing
R&D
R&D head 3 months Twice a month Risk manager Quite often
Quality
control, and
monitoring
systems
Quality
monitoring
manager
Every 2 weeks Once a week Risk manager Often
Proper
planning
Operation
manager
Every 2 weeks Once a week Risk manager Often

23RISK MANAGEMENT INITIATIVES
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24RISK MANAGEMENT INITIATIVES
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25RISK MANAGEMENT INITIATIVES
Appendix
Consequences
Risk codes and Likelihood Insignificant Minor Moderate Major Catastrophic
MAR01 (Almost certain) High
REG01 (Likely) Moderate
STAKE01 (Likely) Moderate
COMM1 (Possible) Moderate
RES02 (Likely) Moderate
MARRES02 (Unlikely) Low
HEALTH04 (Rare) Low
FLUCTUATINGECO01(Unlikely) Low
QUALITY04 (Rare) Low
OPERATIONAL01 (Rare) Low
Risk Assessment matrix