Strategic Management - Report On Woolworths
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American International Theism University
Strategic Management (MGT-403)
Added on 2020-03-07
About This Document
In this document, we will discuss various aspects of strategic management in the context of Woolworths, such as strength, competitive advantages, leadership, organization structures, and resources. Strategic management is the formulation and implementation of specific objectives by an organization to gain a competitive advantage.
Strategic Management - Report On Woolworths
American International Theism University
Strategic Management (MGT-403)
Added on 2020-03-07
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Running head: STRATEGIC MANAGEMENTStrategic ManagementName of the Student:Name of the University:Author’s Note:
2STRATEGIC MANAGEMENTExecutive SummaryThis present report evaluates the strategic management in the context of Woolworths. However,this is a well-known supermarket of Australia and having the strong strategic position in theAustralian supermarket segment. Hence, it has been understood from the internal analysis thatsuch organization has a huge number of stores and employees that are a big strength of theirbusiness. Therefore, they provide the unique product, which makes them different from theircompetitors. This is the another strength of such organization. Value chain analysis modelhighlights on the inbound, outbound logistic and operation process of such organization. Fromthe PESTLE analysis, the external environment of the industry is analyzed. 7's model addressesthe current system, style, strategy and other functions of the organization. Moreover, it has beeninferred from the Porter five force analysis that new rising organizations and the alternativeproducts bring challenges for Woolworths in Australian retail industry. In order to gaincompetitive advantages, this organization needs to mitigate such threats. Apart from this it hasbeen found that Woolworths is a growing organization with high profitability despite this thereare several challenges occuring in the operation process of such organization. Hence, moreemployee engagement and improvement in the customer service will be the beneficial approachfor such organization to maximize their business performance.
3STRATEGIC MANAGEMENTTable of ContentsIntroduction......................................................................................................................................4Company Background of Woolworths............................................................................................4Internal Strength Analysis in context of Woolworths.....................................................................4Generic Strategy..............................................................................................................................5Porter competitive strategies........................................................................................................6Value chain analysis........................................................................................................................7Porter value chain analysis model...................................................................................................77s framework.................................................................................................................................10Industry Analysis in context of Woolworths.................................................................................12Porter’s Five Force analysis...........................................................................................................14Implication of the Analysis............................................................................................................17Recommendations..........................................................................................................................18Conclusion.....................................................................................................................................19References......................................................................................................................................20
4STRATEGIC MANAGEMENTIntroductionStrategic management refers to the formulation and the development of specificobjectives that are carried out by an organization in order to achieve the competitive advantages.Strategic management is based on the resources of an organization and the assessment of theexternal and internal environment of an organization (Wheelen & Hunger). This study deals withthe different aspects of strategic management such as strength, competitive advantages,leadership, organizational structure and resources in the context of Woolworths. Moreover, thestrategic position and current strength of this organization will be addressed through Porter fiveforces, model, value chain analysis and 7 s framework in this present study.Company Background of WoolworthsWoolworths is a well known Australian supermarket offers a verity in the grocery. Theyoffer online grocery and food service to the customers. The vision of such organization is tomake their business financially strong and secure. However, Woolworths provide financialsecurity to their employees and their immediate families. The mission is to provide value to theircustomers and to provide quality service, which can satisfy their consumers. They aim to buildcustomer oriented service and store-led culture. Apart from these developing sustainable sales intheir business is also a part of their mission (Wecu.com.au, 2017).Internal Strength Analysis in context of WoolworthsInternal strength of an organization refers to the internal components such as capabilitiesof an organization, competitive advantages, structure, resources, and system of an organization(Ibscdc.org, (2017). In the context of Woolworths, they have strong resources includes 180000
5STRATEGIC MANAGEMENTemployees, 3000 stores, and well-designed logistics and innovation skills. Therefore, thisorganization has started their business from 1924, which ensures that they are capable toincorporate right person in their business and they are able to utilize their resources properly.They use their strength to gain competitive advantages. The competitive advantages ofWoolworth have developed through their supply chain. The main focus of Woolworths is to cutthe cost in order to mitigate the unnecessary expense and to maximize the efficiency of staffs.Development of the slogan “The fresh food people” by Woolworth has improved their brandimage as it ensures the consumers of providing healthy food with reasonable price. The innovative idea of Woolworth as for example, the "re-fresh" is another internalstrength of their organization to compete in the global market. Vertical integration ofWoolworths with its supplier through the development of own input increases their marketpower. In order to get success from the competitive strategies, it is necessary for the businessorganization to make their strategy based on the sources of competitive advantages (Rees &Smith, 2017). One of the distinct competitive strategies of Woolworths is to provide assuranceabout the quality and freshness of their products through the excellent management of theirsupply chain. This strategy of Woolworths makes them unique from the other retailers in theAustralian supermarket. This strategy of the competitive advantages makes Woolworthsdifferent, which enables them to obtain the unique market position in the Australian supermarketchain.Generic StrategyPorter competitive strategies are used to evaluate the generic strategies regarding anorganization. In the recent year, Woolworths has been facing the threat of new rivalry in the
6STRATEGIC MANAGEMENTsupermarket such as Aldi and German retailer Lidl. In order to mitigate the power of suchrivalry, Woolworths needs to obtain competitive strategies.Porter competitive strategiesThe current position of an organization highlights on its profitability whether it is belowor above of the industry average (Simões & Sebastiani, 2017). Porter competitive strategiesinclude cost leadership, cost focus, differentiation, and differentiation focus. However, by usingcost leadership strategy Woolworths will be able to become a low-cost producer in the retailindustry. Through this strategy, this organization will be able to get all the sources of costadvantages, which enable them to gain sustainable development in the cost leadership.The differentiation strategy allows the organization to be different from the otherorganizations by providing unique product or service (Patel, Guedes & Pearce, 2017). However,Woolworths makes itself more competent through its unique product quality freshness of theirproduct. Hence, by applying such strategy this organization will be able to ensure theirsignificant characteristics for which the buyers are interested to pay for their products.Focus strategy is another component of Porter’s competitive strategy, which enables theorganization to concentrate in particular component such as particular product or particularmarket segment (Rowlands & Iles, 2017). In order to gain competitive advantages, Woolworthsneeds to give their concern towards their product or market or technology. Woolworths isfamous for their product quality. Hence, by following this strategy they will be able tounderstand the demand of the current market and the evolving technology that are essential toobtain competitive advantages. However, the focus strategy is categorized into cost focus and
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