Strategic Management: Analysis of Woolworths

This report provides an analysis of the strategic management of Woolworths, including an evaluation of its external and internal environment, competitive advantage, and recommended strategies for success.

Strategic Management

Strategic Management 1
Executive summary
The main aim of this report is to understand the strategic management concept. In this report,
strategic tools are used to analyse the business environment of the company. Woolworths has
been taken into consideration in order to analyse its external and internal environment.
Porters five forces framework has been used to analyse the environment of the industry. The
core competencies and value chain analysis helps to analyse the internal environment of
Woolworths. The company sets its goal and vision in order to attain success. The expansion
strategy has been adopted by the company to reach the vision and mission statement. As per
the analysis, it is founded that the company faces the challenges that affect its growth. It is
recommended that the company has to adopt the marketing and expansion strategy so that it
can achieve the objectives.

Strategic Management 2
Contents
Introduction...........................................................................................................................................3
Evaluating the organisation’s environment............................................................................................4
External –..........................................................................................................................................4
Porter Five Forces Framework.......................................................................................................4
Internal –...........................................................................................................................................5
Core competencies.........................................................................................................................5
Value chain analysis......................................................................................................................6
Analysis of competitive advantage........................................................................................................7
Strategy formulation and choice............................................................................................................8
Recommendation and Conclusion.........................................................................................................9
References...........................................................................................................................................11

Strategic Management 3
Introduction
Strategic management is the continuous planning, monitoring, analysis and
assessment of all the necessary for an organisation. It is a process which helps the
organisation to achieve the objective. The company analyse the environment before adopting
the effective strategies to achieve the objective. The strategic management contains the
different tools that help to analyse the environment of the company and these are PESTLE
Analysis, SWOT Analysis, porter five forces framework and the many others. In this report,
the discussion is made on the topic on strategic management (Noe, Hollenbeck, Gerhart, &
Wright, 2017). The main aim of this report is to understand the concepts and theories of
strategic management. In this report, internal and external analysis will be done on the
Woolworths.
Overview of the company
In this report, Woolworths has been taken into consideration in order to analyse the
environment of the company. Woolworths is an Australian Supermarket which is owned by
Woolworths Limited. It offers the groceries product, beauty, and health product to consumers
and many others. The company operates in the different locations in Australia by establishing
the stores. There are 976 supermarkets and an additional 19 convenience stores that carrying
the logo of the company. The company has strong presence in online platform with the name
of home shop by delivering their services in the different level (Woolworths Group, 2018).

Strategic Management 4
Evaluating the organisation’s environment
External –
Porter Five Forces Framework
The threat of new entrants
The company has low level of threat of new
entrants
The company requires the large amount of
capital investment to enter or survive for long
time in the market
The new retailers of the company have high
risk of investing money just because of high
brand image of existing companies in the
market
Bargaining power of suppliers
Woolworths has low bargaining power to
supplies the product
Offer low prices to increases the sale and
demand
It is observed that the demand of industry is
increases day by day. The increasing demand
of consumers attracts the large number of
suppliers towards the products and services
Large number of suppliers means low
bargaining power
Bargaining power of consumers
The bargaining power of the company is high
as the companies in the retail industry offer
the similar nature of services to consumers.
The company adopts the prices strategy to
attracts the consumers as decreases prices
increase the sale
The threat of competitors
The company have high level of threat of
competitors
In the retailing industry, there is large
number of supermarkets that affects the
growth of Woolworths.
It is observed that the Myer and Coles are the
top competitors of the company
These competitors of the company highly
compete by providing the similar services to

Strategic Management 5
There are many companies who provide the
similar services to consumers due to which
the number of options is increases.
consumers.
The threat of substitutes
It also have the high level of threat of substitutes of services of the company
There are many services deliver by the company to consumer due to which the chances of
increasing the substitutes of product is high
The companies adopts the different strategy in order to replace the company’s product
It has been seen that the Orica, AECI and many others adopts the different strategy and
services to replace the company’s product in the market.
The company has high threat of substitute of product that affects the growth of the company
as the consumer also prefers the competitors’ products instead of its products (Salavou,
2015).
Internal –
Core competencies
It is observed that the company adopts the low price strategy to attract the large
number of consumers towards its services. The demand of consumer is an increase which
indicates that the sale of the company is also increases.
The other competencies of the company are high market share. The company gain the
competitive advantage by attracting the large number of consumers towards the services. By
competing with the competitors or attracting the people towards the services helps the
organisation to grab the high market share.

Strategic Management 6
The company gain the competitive advantage by offering the different services to
consumers at the low prices.
It is observed that the company deliver the quality of product to consumers to grab the
high market share.
Value chain analysis
Primary Activities
Inbound Logistics
The company stores the products in its Warehouses for long time. It delivers the
services with the different ways such as physical stores, and online stores.
Operations
The company always prefers to offers the product with the effective packaging. The
company does not manufacture the whole products of its supermarket.
Outbound Logistics
The company also have a strong supply chain network in different location to deliver
and collect the material.
Marketing and Sales
The company adopts both the methods of promoting their services. It also adopts the
advance technology in placing orders on streets as the marketing technique (Flouris, &
Oswald, 2016).
Service

Strategic Management 7
The company provides the different services to consumer related to health, beauty,
household and the many others (Moutinho, & Vargas-Sanchez, 2018).
Support Activities
Firm Infrastructure
The company adopts the effective structure to work in a systematic manner. Ever
department perform their own responsibility in their business.
Human Resource Management
Human resource is the main asset of the company. It delivers the services to 29
million people in order to develop the high revenue and brand loyalty. The company also
provides the facilities to employees such as safe environment, leaves and good amount of
compensation. The company has 115,000 numbers of employees (Woolworths Group, 2018).
Procurement
The company have the strong supply network to deliver the services to consumers.
Technology
It adopts the advance technology to improve the services. It uses the SAP system in
order to maintain the accounts in the effective manner. It has strong presence in online
platform to address the demand of large number of consumers (Ansoff, Kipley, Lewis, Helm-
Stevens, & Ansoff, 2018).
Analysis of competitive advantage
There are many companies operates under the retail industry to earns the high
revenue. Tesco, Walmart, Coles Group, Amazon and the many others are the main
competitors of the company that provides the similar services to consumers. It is observed

Strategic Management 8
that the company has the high competitive environment in which it is operating the business
with the effective manner. As discussed above, the company adopts the low cost strategy to
attract the consumers towards the services. Low cost strategies helps it to attract the large
number of people towards it service and helps to grab the high market share in the market.
The company also differentiate its food product from the other companies to gain the
competitive advantage. This strategy of the company helps it to grab the high market share in
the food services as well as in the other areas. The company also advertise the products with
the help of advance technology due to which the large number of people is attracted and the
company gain the competitive advantage (Lasserre, 2017).
Strategy formulation and choice
The main vision of the company is to be become the first preference of the consumer
in supermarket services. It provides the financial services to its employees in order to satisfy
the demand of consumers. The mission and vision statement of the company states the
position at higher level. The main goal is change with the passage of time or after achieving
the goals. Now, the company sets the goals for 2020 for effective services is new markets,
new targets, and new initiatives. The company has to adopt this formulation to grab the
market share in the market. The company set its goals to fulfil its purpose of establishing the
company in the market. It targets the new market that helps to grab the high market share
with the help of effective strategies. It is observed that the expansion strategy of the company
helps to grab the high market share with the high demand of consumers towards the services
(Woolworths Group, 2018c).
It is essential for the company to take the initiative towards its vision and goal. It is
observed that the company adopts the cost leadership strategy and the differentiation strategy
to address the needs and requirements of large number of consumers (Kaya, 2015). It is also

Strategic Management 9
observed that the cost leadership strategy of the company attracts the consumer towards the
low prices. There are many companies operate in the same industry due to which the
company have the risk of high competition. It is a fact that the consumers always spend their
money on the low cost and high quality of product. The large number of consumers attracted
towards the services of the company due to which it becomes the preference of large number
of people (Rothaermel, 2015).
The other initiative strategy of the company is differentiation strategy. As per the
above analysis, it is observed that the company adopts the differentiation strategy in its food
services. The competitors of the company provide the similar nature of product due to which
it faces the difficulties in attaining the success in the business. Differentiate in the food
product attracts the consumer towards the new services. It is a fact that the consumers always
prefer the different product as compare to general and common product. The differentiatation
in food products helps the company to achieve the goal of targeting new market and new
initiative (Woolworths Group, 2018d).
Recommendation and Conclusion
As per my opinion, the company has to adopt the effective strategies to gain the
competitive advantage and the high market share. These are given below:
Expansion strategy
It has been seen that the company adopts the effective strategies such as cost
leadership strategy and the differentiation strategy in order to gain the competitive advantage.
As per my analysis, it is observed that the company operates in limited areas and face the
challenge of high competition in the market. Now, I think it is essential for the company to

Strategic Management 10
adopt the expansion strategy so that it can grab the high share in all over the world (Namada,
2018).
Marketing strategy
It has been seen that the company promotes the product with the advance technology
but the competitors also adopt the same strategy to attract the consumers. I will recommend
that the company has to adopt the market strategy in the new way with the copyright so that
the other companies cannot copy it. It has to adopt the packaging strategy to attract the
consumers towards their services. I saw that the families are the main consumers of the
company and it is fact that ladies and kids are attracted towards the packing. However, the
company already adopts the effective promotion techniques to attract the consumers.
According to me, marketing strategy is an appropriate strategy for the company in order to
achieve the success in the future (Madsen, & Walker, 2015).
It is concluded that the company attain the success in the near future by adopting
these strategies. It also helps to overcome the issues and challenges which is face by the
company against its competitors.

Strategic Management 11
References
Ansoff, H. I., Kipley, D., Lewis, A. O., Helm-Stevens, R., & Ansoff, R. (2018). Implanting
strategic management. Springer.
Flouris, T. G., & Oswald, S. L. (2016). Designing and executing strategy in aviation
management. Routledge.
Kaya, N. (2015). Corporate entrepreneurship, generic competitive strategies, and firm
performance in small and medium-sized enterprises. Procedia-Social and Behavioral
Sciences, 207, 662-668.
Lasserre, P. (2017). Global strategic management. Macmillan International Higher
Education.
Madsen, T. L., & Walker, G. (2015). Modern competitive strategy. McGraw Hill.
Moutinho, L., & Vargas-Sanchez, A. (Eds.). (2018). Strategic Management in Tourism, CABI
Tourism Texts. Cabi.
Namada, J. M. (2018). Organizational learning and competitive advantage. In Handbook of
Research on Knowledge Management for Contemporary Business Environments (pp.
86-104). IGI Global.
Nandonde, F. A. (2019). A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence, 38(4), 54-61.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill
Education.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.

Strategic Management 12
Salavou, H. E. (2015). Competitive strategies and their shift to the future. European Business
Review, 27(1), 80-99.
Techtarget. (2018). Strategic management. Retrieved from:
https://searchcio.techtarget.com/definition/strategic-management
Woolworths Group. (2018a). About Us. Retrieved from:
https://www.woolworthsgroup.com.au/page/about-us
Woolworths Group. (2018b). Woolworths Supermarkets. Retrieved from:
https://www.woolworthsgroup.com.au/page/about-us/our-brands/supermarkets/
Woolworths
Woolworths Group. (2018c). Our history. Retrieved from: https://www.wecu.com.au/about-
us/our-history/
Woolworths Group. (2018d). Strategy and objectives. Retrieved from:
https://www.woolworthsgroup.com.au/page/about-us/our-approach/strategy-and-
objectives