Environmental Scan of Woolworth: PEST Analysis and Recommendations

The report provides an environmental scan of Woolworth, one of the largest supermarkets chains in Australia. It includes a PEST analysis of the company and factors influencing its external environment such as policy changes, changes in government regulations, and global environment. The report recommends that Woolworth should develop its strategies according to the regulations of the Australian government and invest in the research and development of the international market conditions.

Running head: MARKETING
marketing

MARKETING 1
Executive Summary
The practices of an organization largely depends upon its environmental conditions. In
present business scenario, retail sector firms of Australia are continuously facing the challenges
related to the government policies, political impact and global market conditions. To analyse the
impact of such conditions, the process of environmental scan is carried out that can help the
management to formulate and determine future strategies for the growth and success. This report
describes the environmental scan of a well-known Australian retail firm “Woolworth”.

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Table of Contents
Introduction......................................................................................................................................3
PEST Analysis of the company.......................................................................................................3
Factors influencing external environment of the company.............................................................4
Policy Changes.............................................................................................................................4
Changes in government regulations.............................................................................................5
Global Environment.....................................................................................................................5
Recommendations............................................................................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Introduction
The environmental scan can be defined as the process of monitoring the internal and
external environmental conditions so that the signs that can affect the opportunities can be
detected at initial stages and same can be controlled. In this process, the management of the
company systematically analyses and interprets important data to identify the opportunities and
related threats in the internal and external environment of the company (Chrusciel, 2011). This
report contains the environmental scan of Woolworth Company. It is one of the largest
supermarkets chains in Australia and operating more than 1000 stores across the country. The
company works with the help of numerous distribution centers, team members, and support
offices for the purpose of providing range, superior value, quality services and convenience to
the customers. The environmental analyses show that the organization is enjoying a significant
and dominant position in the retail industry of Australia. Its main competitors are Tesco,
Walmart, ALDI and Macro Wholefoods Ltd. The environmental scan of the company includes
the SWOT analyses and PEST Analysis of the company which will help to frame policies against
the threats in the present market. It also assists management is the decision making process as
internal and external environmental factors are deeply analyzed (Akbar & Ahsan, 2014).
PEST Analysis of the company
The PEST Analysis of the company can be described as follows:

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(Slideshare, 2011)
On the basis of this analyses, below factors of external environment of Woolworth can be
discussed in an effective manner.
Factors influencing external environment of the company
Policy Changes
The Federal government in Australia has recently launched a competition policy for the
large retailers in the market which states that any of the big competitors cannot perform any such
function which may become the reason for the elimination of any small retail firm. It is
continuously working and small retailers are also selling their products which are resulting in
decreasing the sales of the company. The Australian government has also restricted the company
to increase its prices with the collaboration of Coles, which is one of the most important barriers
in the growth of the company (Indris & Primiana, 2015). The below mentioned graph shows the
declining market share of the firm because of introduction of various small firms.

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(Pash, 2016)
Changes in government regulations
The study on Woolworth indicates that regulations by Consumer Commission and the
Australian government have impacted badly on the sales of the company. Because these
regulations demand that the company must be operated with fair practices and for such purpose,
the company had to make changes in its policies in order to conduct its operations with full
fairness which is very difficult in the environment of corruption and strong competition
(Banham, 2010).
Global Environment
The company is a well-known firm in Australian economy so it will be profitable to
invest in the global market as its most of the competitors are providing their services across the
world. The international environment is in the favor of the company because of its goodwill and
customer satisfaction rate (Ramsay & Boddy, 2017).
Recommendations
On the basis of above study, it can be recommended that Woolworth is required to
develop its strategies according to the regulations of Australian government which may also
assist in developing its business in global market. Entering into global market will surely impact
the sales of the company in a positive manner as it is also providing satisfactory services in its
home country. For this purpose, a significant amount of money is required to be invested in the

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research and development of the international market conditions that can help in formulating
appropriate strategies by the management.
Conclusion
This report concludes that Woolworth is one of the largest market players in the retail
market in Australia. Although there are some government policies and regulations which impacts
the revenue of the organization. In order to overcome these impacts, the management needs to
frame effective strategies. One of the major opportunities is the favorable global market
conditions and the company should take advantage of this opportunity that may result in
increasing the size as well as the revenue of the firm.

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References
Akbar, S., & Ahsan, K. (2014). Analysis of corporate social disclosure practices of Australian
retail firms. International Journal of Managerial and Financial Accounting, 6(4), 375-
396.
Banham, H. C. (2010). External Environmental Analysis For Small And Medium Enterprises
(SMEs). Journal of Business & Economics Research, 8(10), 19-25.
Chrusciel, D. (2011). Environmental scan: influence on strategic direction. Journal of facilities
management, 9(1), 7-15.
Indris, S., & Primiana, I. (2015). Internal And External Environment Analysis On The
Performance Of Small And Medium Industries (Smes) In Indonesia. INTERNATIONAL
JOURNAL OF SCIENTIFIC & TECHNOLOGY RESEARCH, 4(4), 188-196.
Pash, C. (2016). Business Insider Australia. Retrieved July 1, 2018, from
https://www.businessinsider.com.au/the-next-supermarket-price-war-will-most-likely-be-
started-by-woolworths-2016-4
Ramsay, S., & Boddy, J. (2017). Environmental Social Work: A Concept Analysis. British
Journal of Social Work, 47, 68-86.
Slideshare. (2011). Sales & marketing planning resource. Retrieved July 1, 2018, from
https://www.slideshare.net/earlstevens58/sales-marketing-planning-resource