Strategic Development Tools for Woolworths: PEST, SWOT, VMOST, Porter Five-force Framework

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2018
Woolworths

Strategy Development Tools
This paper is being presented in order to explain different strategic development tools and
their use in a business or organization. In order to explain this, the paper will make use of
PEST Analysis, SWOT Analysis, VMOST Analysis, and Porter five-force framework.
Moreover, to support the discussion regarding all the tools, Woolworths Company has been
selected.
Strategic Development Tool
PEST Analysis
PEST Analysis is an easy and broadly used tool that support in analyzing the Political,
Economic, Socio-cultural, and Technological alterations in the environment of business. This
support in understanding the "big picture" powers of change that business is exposed to, and
through this, they take advantages of the opportunities provided by them.
Political- Here regulations of government and legal factors are measured in regards to their
capability to influence the environment of business and trade markets (Pestle Analysis, 2013).
For example, the political regulations have adversely influenced the Australian retail
industry. Recently, the government has initiated a campaign that was directed to block the
established businesses such as Woolworths from removing smaller retailers by unfair
competition.
Economic- By this factor, companies evaluate the economic issues that are certain to have an
influence on the business. For example, if the purchasing power of the customer is weak, the
company’s performance is adversely affected.
Social- With the support of the social factor, the company can evaluate the socio-economic
environment of the market through the elements such as culture limitations, education,

customer demographics, and lifestyle attitude. For example- The demographic features in
Australia constantly changes; Customers change their demands as per the technical changes,
denoting that they like to use current products, which makes Woolworths change its offering
as per the market trend.
Technology- Technology can affect the introduction of the service or product negatively or
positively in the market through advancements in the technology, role of the internet, and the
lifecycle of technology. For example- Woolworths has initiated the use of green refrigeration
technology in order to store perishable goods (Fern Fort University, 2018).
SWOT Analysis
SWOT analysis is said to be a framework, which is utilized to measure the competitive
position of the company by recognizing its strength, weakness, opportunities, and threats
(Ommani, 2011).
Strength explains what a business shines at and differentiates it from its rivals: a strong
balance sheet, strong brand, unique technology, and a loyal customer base, etc. The strength
of Woolworths is:
 Woolworths is the oldest and famous brand of retail in Australia.
 Offers a variety of services and products
 Strong commitment towards sustainability and environment (SWOT & PESTLE,
2017)
Weaknesses stop a business from performing its operations at its maximum level. They are
the divisions in the business that needs improvement to stay competitive. Weaknesses of
Woolworths are:
 Delayed in making a decision regarding entering in the online retail