Strategic Planning of Woolworths

This document discusses the strategic planning of Woolworths, including Porter's five forces analysis, competitor analysis, resources and competencies, SWOT analysis, major issues faced, strategic change, and recommendations.

Running head: STRATEGIC PLANNING OF WOOLWORTHS
STRATEGIC PLANNING OF WOOLWORTHS
Name of the Student
Name of the University
Author Note

1STRATEGIC PLANNING OF WOOLWORTHS
Table of Contents
Project Part B.................................................................................................................2
Porter’s five forces analysis of Woolworths..............................................................2
Competitor analysis....................................................................................................2
Resources and competencies of Woolworths based on Resource based theory........3
SWOT analysis of Woolworths.................................................................................3
Project Part C.................................................................................................................4
Major issues faced by Woolworths............................................................................4
Strategic change.........................................................................................................5
Recommendations......................................................................................................5
References......................................................................................................................7

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Project Part B
Porter’s five forces analysis of Woolworths
Threats of the substitutes – The threat based on substitutes is quite high as
Woolworths can face indirect competition from the convenience stores and the specialist
grocery based stores. The substitutes are able to pose major threats to revenues of
Woolworths (Engert, Rauter and Baumgartner 2016).
Rivalry among the competitors – The levels of rivalry in the retail industry are high
due to the presence of huge number of domestic and international organizations. The major
drivers of rivalry in the industry include the entry of American retailers (Wheelen et al.
2017).
Bargaining power of the suppliers – The suppliers have low bargaining power in the
retail industry of Australia. Woolworths and Coles have gained around 80% of the market
share in retail industry.
Bargaining power of the buyers – The power of the buyers in Australian retail
industry are high and is expected to increase in the future. The entry of new competitors has
been able to increase the bargaining power of buyers (Lasserre 2017).
Threats of new entrants – The threats related to new entrants in the Australian retail
industry are low. The laws based on zoning and leasing related agreements are able to affect
the development of operations of new organizations (Frynas and Mellahi 2015).
Competitor analysis
The major competitors of the Woolworths in the retail industry of Australia are Coles
and Aldi. Coles and Woolworths have been able to acquire more 80% of the total market
share in retail industry of Australia. The strategies that are implemented by the two

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organizations are also quite different from each other. This is considered to be a major reason
that is related to the growth of the two organizations and price wars that have taken place.
Aldi is however able to beat the prices of Woolworths and Coles along with profit margin
(Hitt, Ireland and Hoskisson 2016).
Resources and competencies of Woolworths based on Resource based theory
Woolworths consists of tangible and intangible resources that are able to help in the
operations of the organization in the industry. The tangible resources include, large number
of the stores, human resources, technology. The intangible resources on the other hand
include, intellectual property rights, brand value and name, efficiency of the management and
relationship that has been developed with the customers (Aguinis, Edwards and Bradley
2017).
Capabilities of the organization include, customer service, stocking of the stores,
effective financial returns, marketing capabilities and specialized private labels. The
capabilities are able to play the most important part in development of high revenues of
Woolworths in the industry along with its leadership position (Hanson et al. 2016).
SWOT analysis of Woolworths
Strengths –
Woolworths is the leader in Australian retail market.
The leadership and resources of Woolworths are also considered to be major
strengths.
Carbon footprint reduction based activities have been reduced by Woolworths
(Aguinis, Edwards and Bradley 2017).
Weaknesses –

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The lack of proper growth strategy can affect the leadership position of
Woolworths.
The government of Australia has restricted price movements of Woolworths
(Ethiraj, Gambardella and Helfat 2017).
Opportunities –
Woolworths has major growth opportunities in the emerging countries.
The multi-option retailing strategy can be adopted by Woolworths in order to
operate profitably in the retail industry.
The lifestyle changes that have taken place have been able to affect the choice
of customers in retail industry (Aguinis, Edwards and Bradley 2017).
Threats –
The high competition levels in the retail industry is a major threat that is faced
by Woolworths.
The intervention of the government in deciding the prices of products is also
considered to be an important factor that affects the organization (Engert,
Rauter and Baumgartner 2016).
Project Part C
Major issues faced by Woolworths
The major issues that have been recently faced by Woolworths are related to the
underperformance of its stores and restructuring the operations. The lack of proper revenues
has also led to many job cuts in the organization. The leadership position that has been gained
by Woolworths in the industry is affected in a negative manner by the low revenues of the
organization. Competition is also a major issue that is faced by Woolworths in the Australian

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retail sector. The entry of international retail organizations is considered to be a major factor
that has an impact on Woolworths (Wheelen et al. 2017).
Strategic change
Woolworths needs to change the strategies in such a manner that is able to provide
positive experiences to the customers in the stores. The prices of products have been a major
that affect the competition that has been developed in the retail industry. The price movement
of Woolworths has also been affected by the interventions of government (Hanson et al.
2016). The organization thereby needs to aim for developing differentiation in the industry
with the help of the services that are provided in its stores. The organization will be able to
maintain its profitable operations with the help of proper differentiation with the help of its
services. The performance of stores will also be improved with the help of services and
experiences that are provided to the customers (Aguinis, Edwards and Bradley 2017).
Recommendations
The short based recommendations that can be provided to Woolworths are as follows,
Making more investments in promotions and advertising based activities. The
advertisements need to depict the ways by which Fresh range based products
are able to fulfil the needs of consumers in an effective manner.
The company needs to develop an effective point based on differentiation of
the services and products in order to improve the revenues that are provided
by the stores.
The long term based recommendations that are provided to Woolworths are as
follows,

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Woolworths needs to provide its focus on the enjoyable shopping
experience and convenience that can be offered to the customers. The
current program of Woolworths needs to be based on the ways by which
the company can refurbish the stores and make them more attractive for
the consumers.
The levels of investments and acquisition based activities of Woolworths
need to be increased in order to improve the operations in the retail
industry of Australia.

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References
Aguinis, H., Edwards, J.R. and Bradley, K.J., 2017. Improving our understanding of
moderation and mediation in strategic management research. Organizational Research
Methods, 20(4), pp.665-685.
Engert, S., Rauter, R. and Baumgartner, R.J., 2016. Exploring the integration of corporate
sustainability into strategic management: a literature review. Journal of cleaner
production, 112, pp.2833-2850.
Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2017. Reviews of strategic management
research. Strategic Management Journal, 38(1), pp.3-3.
Frynas, J.G. and Mellahi, K., 2015. Global strategic management. Oxford University Press,
USA.
Hanson, D., Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2016. Strategic management:
Competitiveness and globalisation. Cengage AU.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2016. Strategic management: Concepts and
cases: Competitiveness and globalization. Cengage Learning.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic
management and business policy (p. 55). Boston: pearson.

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