Strategic Management at Woolworths Holdings

This assignment delves into the strategic management approach employed by Woolworths Holdings Limited. It examines how top management utilizes strategic tools to achieve targets and maintain a competitive edge. The analysis focuses on competitive strategies like best cost and differentiation, as well as international marketing tactics such as acquisitions adopted by Woolworths Holdings Limited to bolster its brand image and gain a competitive advantage.

Strategic Management
Table of Contents

INTRODUCTION...........................................................................................................................1
TASKS.............................................................................................................................................1
Analyse whether this acquisition will fit for both industries.......................................................1
Competitive strategies of WHL and DJL....................................................................................1
Five force model..........................................................................................................................2
SWOT model for analysing the acquisition.................................................................................3
International marketing strategies of Woolworths Holdings Limited.........................................3
Defensive strategy.......................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................5

INTRODUCTION
Strategic management is a kind of process that is used by an organization where some
planning and monitoring has been performed so that objectives can be achieved. This kind of
practice is performed by the top management like business owner, executives after conducting
the assessment of internal as well as external environment (David, 2011). The present report is
based on Woolworths Holdings Limited (WHL) which perform an acquisition with David Jones
Limited (DJL) of Australia where all retail industries are undergoing with earthquake. In this
context, report explain the competitive strategies of both industries and a SWOT model is also
used for evaluating the advantages of acquisition. Furthermore, it explains some defensive
strategies which will help an enterprise in performing better than their competitors.
TASKS
Analyse whether this acquisition will fit for both industries
When an organization establish their operations then they make their goal statement and
follow some values which will set a direction for all other staff members. The current vision of
WHL is to be the leading retail in southern hemisphere and mission is to be the first choice of
consumers who are looking for suitability, value and innovation. The overall business is based on
their values like innovation, integrity, service, sustainability and so on (Aspara and et. al., 2011).
On the other hand, the vision and core values of DJL explained that we perform our business by
delivering the customer centric outcomes to people so that other new strategies can be
formulated in an effective manner.
After analysing the vision, mission and core values, it can be stated that the acquisition will
be fit that occur between Woolworths Holdings Limited and David Jones Limited. Both retail
industries are more concerned for their consumers so after merging they will be able to perform
better and success can also be achieved at the market area (Strategic Management - Meaning and
Important Concepts, 2017).
Competitive strategies of WHL and DJL
Some competitive strategies are followed by the business organization so that they will be
able to attain competitiveness. This is a kind of long term approach which can help the firm in
achieving the success. When an enterprise uses this then their main aim is to make their
distinctive image at the market area so that high revenues can be generated effectively. Some
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strategies are there like best cost provider, broad differentiation, market niche are followed by
Woolworths Holdings Limited so that uniqueness can be achieved (Peppard and Ward, 2016). If
company will provide best cost for their products, then they will be able to attract many price
sensitive people and by focusing on differentiation they can attract people who wants to maintain
their social status. In market niche, they will target many high society customers. By following
these, the retail industry will be able to gain the competitive advantage as compare to other
industries.
David Jones Limited followed low cost provider through which they will be able to attract
price sensitive people only and they will not be able to make their position at the marketplace.
Along with this, they followed focused strategy where they are trying to make their unique image
in the market area.
Five force model
The current model is developed by porter which can be used by organization as a tool so that
they will be able to identify the competition that exist between different industries. The nature of
competition can be analysed on the basis of some factors like size, structure, distribution
channel, consumer’s expectations and overall growth of company (Yang, Hong and Modi, 2011).
There are five main factors through which competitiveness can be evaluated like:
Threat from new entrant: If some new companies will establish their business within some
profitable industries then due to this market share will get affected of existing one. For example,
if Woolworths Holdings Limited will perform acquisition with David Jones Limited then through
this they can make their strong image in the market which will help them in establishing their
operations in many other countries.
Threat from substitute: There are some other industries who offer same products and
services to the customers so that they can fulfil their wants. For this, it is necessary for the
Woolworths Holdings Limited to focused on the product quality and their differentiation. After
performing the acquisition, company will be able to sustain their competitive advantage as
compare to other rivals.
Bargaining power of buyer: It is related to the power of an individual who can force the
organization to decrease their prices with improved quality (Alkhafaji, 2011). Their power can
be reduced to some extent by conducting the loyalty programs. They both Woolworths Holdings
Limited and David Jones Limited are focused on their service user.
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Bargaining power of suppliers: This is related to the power that suppliers have regarding to
row material when there are very few suppliers in the market. If both will perform acquisition,
then their overall cost for manufacturing the products and services will get reduced.
Inter firm rivalry: The competition is the major factor which can affect the performance of
other industries and they will not be able to attain competitive advantage. Woolworths Holdings
Limited can acquire David Jones Limited so that they will be able to more focused on the quality
of their services so that they can achieve success.
SWOT model for analysing the acquisition
SWOT model can be used so that it can be analysed that how acquisition is successful
which take place in between the between retail industries like Woolworths Holdings Limited can
David Jones Limited. When the strength of WHL will become stronger and competitive
advantage can be achieved then it will become successful (Osterwalder and Pigneur, 2013).
When competitiveness will be achieved then their brand image can be improved at global level
and through this they can attract many people towards their services. By using this kind of
model, WHL will be able to know about their internal strength, weaknesses and external
opportunities, threats.
Strength Weaknesses
The company has high sales growth rate a
compare to its competitors.
The brand is get improved at local as well as
international level.
Effective distribution as well as sales channel.
High taxes
High loan rates
Opportunities Threats
New services and products
New markets
Rising the cost of raw material
High competition
International marketing strategies of Woolworths Holdings Limited
Some strategies are performed by the retail industry at the global level so that they will be
able to offer their products and services in different countries. For this, companies have to follow
the legal aspects which can help them in ensuring smooth functioning at different place. Some of
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these international marketing strategies are like individualised global marketing, merging,
franchising and so on (Zott, Amit and Massa, 2011). In individualised, company is also focuses
on their target market. Along with this, they focus on the profits and costs which should be
managed so that performance can be improved. In global, some promotional activities are
performed by the industry so that they will be able to attract many people towards their services
at international level. Here, acquisition strategy is followed by Woolworths Holdings Limited so
that they can take an entry into another market. Through this, company can make their image
strong by using the combined strategies of both industries so that they can achieve success in an
effective or efficient manner.
WHL chooses DJL so that they can establish their operations in Australia where they can
make their image. This is the oldest departmental store so their existing image is good as this will
be beneficial for them in achieving the goals. When earthquake is happened at Australia then due
to that the store is get damaged so this is the right time of implement such kind of acquisition
strategy.
Defensive strategy
When acquisition will get successful then this will be beneficial for both the organization as
through this they can achieve competitiveness (Srdjevic, Bajcetic and Srdjevic, 2012). After this,
they can follow some defensive strategies for their local as well as global competitors. Some of
these are explained below:
Position defensive: This is one of the simplest strategy which can be used by business
organization in order to maintain their position in the market as compare to other competitors.
For this, they have to invest in the market so that their brand image can be improved.
Mobile defence: In this, companies constantly have to implement the changes so that it
become difficult for the competitors to compete with Woolworths Holdings Limited. This can be
related to the new market entry and lunching some new products in the market so that they will
be able to achieve competitive advantage.
Counter-offensive defence: It is also known as retaliatory strategy is used when a
competitor’s attack on your organization then in defence you attack back (Thun and Hoenig,
2011). So, in this manner an enterprise will be able to perform well.
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CONCLUSION
Form the above carried out analysis, it can be concluded that top management uses the
strategic management approach so that they will be able to attain their targets. Some competitive
strategies like best cost approach, differentiation are followed by the retail industry so that they
will be able to improve their brand image. Along with this, some international marketing strategy
like acquisition is adopted by Woolworths Holdings Limited so that they can make their image
strong and this can help them in achieving the competitive advantage.
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REFERENCES
Books and Journal
David, F. R., 2011. Strategic management: Concepts and cases. Peaeson/Prentice Hall.
Aspara, J. and et. al., 2011. Strategic management of business model transformation: lessons
from Nokia. Management Decision. 49(4). pp.622-647.
Peppard, J. and Ward, J., 2016. The strategic management of information systems: Building a
digital strategy. John Wiley & Sons.
Yang, M. G. M., Hong, P. and Modi, S.B., 2011. Impact of lean manufacturing and
environmental management on business performance: An empirical study of
manufacturing firms. International Journal of Production Economics. 129(2). pp.251-
261.
Alkhafaji, A. F., 2011. Strategic management: formulation, implementation, and control in a
dynamic environment. Development and Learning in Organizations: An International
Journal. 25(2).
Osterwalder, A. and Pigneur, Y., 2013. Designing business models and similar strategic objects:
the contribution of IS. Journal of the Association for information systems. 14(5).
p.237.
Zott, C., Amit, R. and Massa, L., 2011. The business model: recent developments and future
research. Journal of management. 37(4). pp.1019-1042.
Srdjevic, Z., Bajcetic, R. and Srdjevic, B., 2012. Identifying the criteria set for multicriteria
decision making based on SWOT/PESTLE analysis: a case study of reconstructing a
water intake structure. Water resources management. 26(12). pp.3379-3393.
Thun, J. H. and Hoenig, D., 2011. An empirical analysis of supply chain risk management in the
German automotive industry. International Journal of Production Economics. 131(1).
pp.242-249.
Online
Strategic Management - Meaning and Important Concepts. 2017. [Online]. Available through: <
http://managementstudyguide.com/strategic-management.htm >. [Accessed on 29th
September 2017].
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