Woolworths: Background, PESTLE Analysis, Microenvironment, Competitors, SWOT Analysis

Woolworths is the leading retailer in Australia, specialising in selling groceries. Read about its PESTLE analysis, microenvironment, competitors, and SWOT analysis. Learn about its strengths, weaknesses, opportunities, and threats.

Running Head: WOOLWORTH 0
Marketing

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Background of Woolworths
Woolworths is the leading retailer in Australia. after the Wesfarmers limited, it comes
at the number two in terms of revenue. It has started its operation in the year 1924by first
started its store in Sydney. After this, in the year 2012, it proved to be one of the biggest
retailers in Australia as well as New Zealand. Woolworths tends to specialises in selling the
groceries such as fruit, vegetables, packaged foods, and meat. It currently operates under the
1000 stores across all over Australia Bailey, Price, Pyman & Parker, 2015).
In Australia, it is the biggest chain of supermarket and also called as the Australia’s
fresh food people. it also more than 110,000 people that helps it in providing the customers
with superior range, services, convenience and value. It is effectively utilising the opportunity
to better serve the customers in its retailing store. It is also effectively utilising the new and
innovative techniques in order to bring the best concept for the customers. Using such
initiatives, it has also created the new and consistent look in the World. It also seeks to work
closely and effectively with the Australia farmers and growers in order to ensure the best
products for its customers. It tends to source the 96 per cent of the fresh vegetables and fruits
from the Australian growers and farmers. In this way, Woolworths is able to make the best
contribution in the Australian retail industry (Riemer et al, 2016).
Pestle analysis of Woolworths
Political Factors: In the recent time, political condition affects the retail industry in Australia
to a great extent. Similarly, Woolworths performance is also get affected to the greater level.
Besides this, federal government of Australia has also brought the competition policy that
tends to prevent the major international players such as Coles and Woolworths in eliminating
the competition. In addition to this, the stability of the government in Australia has also
helped the Woolworths to work well in the retail industry of Australia.
Economic Factors: the decline in the economic conditions of market across the Australia, it
has affected the Woolworths performance. In addition to the decline, the fluctuations in the
exchange rate of currency as well as weakening of the Australia Dollar have also affected the
International retail operation of Woolworths.

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Social factors: on the recent time, it is true that customers prefer to choose the environmental
product. in order to fulfil the demand of customers, Woolworths has also indulge itself in the
healthier and greener life cycle. It is also significant for the firms to comply with the
necessary corporate social responsibility. It will help in gaining the more market share. Social
factors therefore covers the gender, religion, sex, norms and population size. All these aspects
in Australia tends to keep changing. Due to the varying demand of customers also,
Woolworths has brought several technological changes.
Technological factors: In the recent time, technology has taken the place in every industry, in
the retail industry, competition has increased to a greater extent that requires the firm to adopt
innovative technologies. Woolworths has also taken into account the green refrigerator
technology in order to store the perishable product for the longer duration. In the recent time,
Woolworths has also adopted the new checkout free grocery experience in order to start the
new style of shopping in the Australia. It has started the “scan & Go” technology that allow
the reward members of Woolworths to scan and further pay for the items by making use of
the app. It will help in bringing the new kind of retail experience in the Australia market. It
believes that the mobile payment and the smartphone technology have the higher potential to
transform the shopping experience for its customer in the future. In this way, it plays a major
role in retail industries. Woolworths uses innovative technologies that assist it in increasing
the efficiency and effectiveness for its products as well as services. It has self-checkout
machines in the store. In addition, it has machines that enable the customers to make
payment-using credit and debit card (Richards & Devin, 2016).
Environmental factors: several environmental factors are also affecting the Woolworths
performance as well as the retail industry. It means that the Woolworths is also getting
affected by the environmental factors. Therefore, the wine business of Woolworths is
adversely threatening the environmental condition. As a result, it is also affecting the
profitability of the company. In order to protect the environment, Woolworths has also taken
several initiatives. It has phased out the use of plastic bags. From the year 2018, it has
stopped giving the lightweight plastic bags to the customers (Devin & Richards, 2018).
Legal factors: several laws are made by the Australian government in order to assist the
organisations. Due to this, Woolworths has also set its own policies to work effectively.

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Similarly, safety and health laws are also created where employees are provided the effective
working environment.
Microenvironment
Suppliers
In every organisation, suppliers play the essential role. It has maintained the strong
relationship with its suppliers. Every year, it also awards it top supplier. In the year 2018, it
has awarded the AB foods as its top supplier. The proper analysis of Australian retail market
states that it is highly concentrated and strong competitive market. Due to this, it also has to
face high bargaining power from the suppliers. Due to this also, it believes in making the
strong relationship with the suppliers. It has also maintained the strong relationship with its
supplier over a period of time. In its report, it has stated that it believes in making the perfect
trust with its thousands of suppliers with whom it is working. They also played the essential
role in the huge success of Woolworths. Similarly, Woolworths is also dealing with its
suppliers with innovation and trust (Mortimer, 2016).
Relevant publics
Woolworths believes in building the best and strong relationship with its stakeholders. It
therefore includes several kinds of stakeholders in its relevant public. Customers are the most
essential element that is included in its public. It has around 1500 stores that further make the
countless efforts for satisfying its customers through value, quality, and sustainability. It has
also stated that Woolworths operates its business in Australia, New Zealand, and South
Africa as well. In these countries, it appreciate that it is meaningfully involved in the
community upliftment measures. It has also various shareholders that are included in its
relevant public.
Market Intermediaries
It assists the Woolworths in promoting, distributing, as well as selling the products to final
customers. In addition to this, the physical distribution of the Woolworths tends to adopt the
medium through which final goods are also delivered to the end consumers. This department
of the Woolworths also helps in ensuring the proper storage of the firm that helps in

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removing the product from any kind of the damage. In addition to this, the marketing
department of the Woolworths assist it in promoting the products and services. It also serves
as the channel of communication between the customers and between the companies. This
helps in getting the feedback with the help of survey. Furthermore, it assists the research and
development department in order to ensure the development of product according to the
needs of the customers. In this way, Woolworths is able to get the various benefits of working
smoothly (Knox, 2015).
Competitors of Woolworths: what they tend to offer
The major competitors of Woolworths are Tesco, Carrefour, Walmart, LIDL, Coles,
Aldi and Amazon. Aldi offers the fresh vegetables and fruits, beauty and health products,
stationary, clothes, soft tools and household goods. Aldi does not change the food products
but keep changing the non-food items by experimenting. As compare to this, Walmart is the
multi brand retail store. It includes various kinds of products such as movies, books, music,
furniture, home, clothing, home improvement, toys, baby and toddler, outdoors and fitness,
Halloween, and pharmacy. As compare to this, Amazon is the leading platform across the
World. As compare to this, Amazon is the leading e-commerce platform. Amazon tends to
sell the products online in which user tends to login to Amazon through the app or website. In
its retail division, it includes everything from auto parts to apparel, electronic gadgets, toys,
health and beauty utilities to home décor (Grimmer, 2019).
Among all these competitors, the major competitors of Woolworths are Wesfarmers
and Aldi. Both these retailers also tend to occupy the good and effective market share in
terms of the suppliers and customers. In the prior time, it was not facing strong competition
but in 2017, it is stated in a report that hot competition is back. However, due to the major
Australian player in retail industry, it does not ace competition rivalry from any new
competitor. In this way, it only faces competition from existing competitors. In recent years,
high-value young shopper is biggest risk faced by Woolworths.
SWOT analysis of Woolworths
Strengths:

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 Woolworths is one of the top most companies that expanded its roots in several
companies. It is the top most companies that have introduced the most effective and modern
retail model of trade.
 It has more than 10,000 employees across the World.
 It has also various brand loyalty scheme for its daily customers.
 It has strong brand name with effective operations.
 Woolworths is also regularly tracking its customers using analytical tools. It also
helps in keeping the track of shopping bills of the customers. It helps in ensuring that their
shelves are always stocked with the best products.
 It has strong leadership position that enhances the capability of the Woolworths in
exploiting the potential of market through its effective resources in the form of human
resources, technological resources as well as the good presence (Woolworths, 2017).
Weaknesses
 It also has limited presence as compare to its competitors.
 The growing existence of the online brands has restricted its growth.
 The major weakness of Woolworths is that its growth strategy tends to get impacted
by the external environment. Besides this, the government of Australia has also restricted the
Woolworths for keeping the higher prices. It indicates the major weakness of the Woolworths
in order to support its higher level of growth (Woolworths, 2018).
Opportunities
 Woolworths can promote its brand through promotions, advertising as well as through
sponsorship.
 It can seek the growth through franchise models and strategic acquisitions in the
emerging economies.
 The opening of several stores in the new geographies can also help it in boosting the
business. there are several regions where Woolworths can expand its business due to its
strong brand image.
 It can also adopt the multi-option retailing strategy that will further help it in coping
up with the changing demand of customers.
 The changing lifestyle of consumers also presents the several opportunities for
Woolworths to grow its business (Grimmer, 2019).

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Threats
 The recession in economy can hinder the growth of its stores.
 Rising cost of the raw material can present the threat to Woolworths for longer period
of time.
 The increase in competition from the several international players can affect the
business of Woolworths.
 The changing need as well as consumer buying behaviour can from the online channel
can prove to be the major threat for Woolworths.
 Shortage of competent workforce in some of the areas also presents the threat to the
regular growth in the Woolworths (Owler, 2018).
Conclusion
In the limelight of above discussion, it can be concluded that Woolworths has proved
to be one of the retail supermarket chain in Australia. it is also able to achieve this growth by
strong commitment toward the employees as well as customers. Besides this, several factors
such as changing social trends and patterns, changing need of the customers, competitive
business environment is putting the negative effect on Woolworths. It also effectively deals
with its suppliers, customers, employees as well as relevant shareholders in order to build the
strong and long term relationship with them. In this way, it can be stated that Woolworths is
committed with the regular transparency, improvement and accountability.

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References
Bailey, J., Price, R., Pyman, A., & Parker, J. (2015). Union power in retail: Contrasting cases
in Australia and New Zealand. New Zealand Journal of Employment Relations, 40(1),
1.
Devin, B., & Richards, C. (2018). Food waste, power, and corporate social responsibility in
the Australian food supply chain. Journal of Business Ethics, 150(1), 199-210.
Woolworths Group. (2017). Annual Report of Woolworths. Retrieved from:
https://www.woolworthsgroup.com.au/icms_docs/188795_annual-report-2017.pdf
Woolworths Group. (2018). Australian food: Woolworths supermarket. Retrieved from:
https://www.woolworthsgroup.com.au/page/about-us/our-brands/supermarkets/
Woolworths
Owler. (2018). Woolworths's Competitors, Revenue, Number of Employees, Funding and
Acquisitions. Retrieved from: https://www.owler.com/company/woolworthslimited
Richards, C., & Devin, B. (2016). Powerful supermarkets push the cost of food waste onto
suppliers, charities. The Conversation, (29).
Mortimer, G. (2016). ALDI gives suppliers, as well as shoppers, greater choice: Retail
expert. Journal of the Home Economics Institute of Australia, 23(2), 39.
Riemer, K., Hafermalz, E., Roosen, A., Boussand, N., El Aoufi, H., Mo, D., & Kosheliev, A.
(2017). The Fintech Advantage: Harnessing digital technology, keeping the customer
in focus. University of Sydney, Business School and Capgemini.
Arup, C., Beaton-Wells, C., & Paul-Taylor, J. (2017). Regulating supermarkets: The
competition for space. UNSWLJ, 40, 1035.
Nastasoiu, A., & Vandenbosch, M. (2019). Competing with loyalty: How to design
successful customer loyalty reward programs. Business Horizons, 62(2), 207-214.
Grimmer, L. (2019). Disrupting the giants: How independent grocers respond to the
supermarket duopoly in Tasmania, Australia. In Case Studies in Food Retailing and
Distribution(pp. 13-24). Woodhead Publishing.

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Blythe, J., & Martin, J. (2019). Essentials of marketing. Pearson UK.
Knox, M. (2015). Supermarket monsters: The price of Coles and Woolworths'
dominance (Vol. 6). Black Inc..
Grimmer, L. (2018). The diminished stakeholder: Examining the relationship between
suppliers and supermarkets in the Australian grocery industry. Journal of Consumer
Behaviour, 17(1), e13-e20.

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Appendices
TOWS matrix
SO strategies WO strategies ST strategies WT strategies
 Being an
effective and
well
recognised
retailer in
Australia,
Woolworths
can take the
several
benefits by
allowing the
customers to
offer
discounts.
 At the time
of economic
slowdown,
Woolworths
can regain
the loyalty of
customers by
offering the
products at
reasonable
prices.
 Due to the
growing
trend of the
 Woolworths
can set the
more clear
mission so that
it can get the
several
opportunities in
the retail
business.
 Woolworths
can also update
the customers
regarding its
new policies
and products on
the internet.
 Woolworths
also has the
opportunity to
increase its
distribution
across the
world.
 Woolworths
should also
provide the
several benefits
to it employee
 In spite of
having the
strong brand
image, it has
to face the
competition
from several
firms. It can
be minimised
by using
differentiatio
n strategy.
 It will also
help in
creating the
goodwill
across the
world.
 In order to
avoid any
kind of
competition,
it can give
the emphasis
on the
current
product line
as well as
can invest on
the
advertising
campaign.
 By doing the
effective
research and
development,
it can
effectively
do the study
of foreign
market. This
will help in
adapting or
bringing the
change
according to

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online
shopping,
Walmart can
bring several
changes by
offering the
customer
oriented
products.
that will help it
in increasing
the morale of
employees.
their culture.

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