Optimizing Woolworth Limited's Value Chain: Scenarios and Analysis

Running head: Enterprise Business Requirement 1
CLIENTS AND MARKETS
Student Name
Institution

Enterprise Business Requirement 2
Executive summary
The aim of the report is to explore the value chain of the Woolworth Limited with focus
on some value chain scenarios that can optimize the value chain. The paper, therefore, analyses
the values chain of Woolworth Limited as it based on Porter's five force value chain analysis.
The three scenarios that were identified are digital value chain system, partnership within the
international value chain system and direct plant shipment. Benefits and risk of each scenario
were analyzed based on Porter's five force value chain analysis. Some of the benefits of digital
value chain include high efficiencies at every level of the value chain, faster service delivery and
integration of all players into one system. Benefits of the partnership include reduced cost
attributed to transportation and faster service delivery. Benefits of direct plant shipment are
shorter value chain that results in low prices and cost of products or services. The conclusion was
hence deduced that summaries various findings of the paper.

Enterprise Business Requirement 3
Table of Contents
Introduction.................................................................................................................................................3
“As-is” value chain of Woolworth Limited based Porter’s Value Chain Analysis descriptions.....................3
Inbound logistics......................................................................................................................................3
Operations...............................................................................................................................................4
Outbound logistics...................................................................................................................................4
Marketing and sales................................................................................................................................5
Service.....................................................................................................................................................5
Scenarios to optimize the value chain.........................................................................................................6
1. Digital value chain................................................................................................................................6
2. Partnership..........................................................................................................................................9
3. Direct plant shipment (DPS)..............................................................................................................13
Conclusion.................................................................................................................................................15
References.................................................................................................................................................17

Enterprise Business Requirement 4
Introduction
Company’s value chain remains a key determinant of quality, cost and service delivery
within the company. The company’ value chain network can be analyzed based on Porter's Five
force value chain analysis and some of these elements include inbound logistics, outbound
logistics, operations, marketing and sales, and services. Woolworth limited is the second largest
retailer in Australia and New Zealand. The company has a wide value chain network that spread
across Australia to its international branches in New Zealand. The main aim of the paper is to
explore the value chain of Woolworth limited as it is citing some scenarios that can be used to
optimize value chain based on Porter’s five force value chain analysis.
“As-is” value chain of Woolworth Limited based Porter’s Value
Chain Analysis descriptions
The value chain of Woolworths Limited can be described using the Porters value chain
analysis that includes five areas of analysis. Porter’s value chain analysis considers various
factors inbound logistics, outbound logistics, operations, marketing and sales, and service.
Inbound logistics
The Woolworths Limited inbound logistic is described based on various enablers that
make the business package and move goods within its warehouse. The inbound logistics involve
moving products throughout the organization from its main store or warehouse to various store
that are spread throughout the country and New Zealand. The company has its own transport

Enterprise Business Requirement 5
system that it uses to move products throughout the organization. The company has a distribution
center from where goods are distributed to other stores within the value chain of the organization
(Cambridge University 2013).
Operations
Woolworths Limited has various operational activities that include packaging. The
company package products after obtaining those products from suppliers using packaging
materials using a barcode that enables easy stock management. Some of the operations also
include demand and supply management operations that mainly focus on identifying areas that
need to be supplied with products. In addition, the company through demand and supply
management ensures that all stores within the Woolworths brand are stocked with goods
(Schueneman 2016).
Outbound logistics
The company has outbound logistics that involve moving goods from suppliers facility to
distribution center of the company. Firstly, the company has a good Primary Freight that is used
to move products from supplier’s premises to distribution center from where the products are
distributed to various stores within the organization. Secondly, international logistics involves
moving products from the premises to other international stores in the country of New Zealand.
The logistic map starts from suppliers’ facility, Woolworth distribution center through to
international warehouse located in New Zealand. The company has come up with a system called
KNLogin that is used to manage international logistics. The platform consists of the online
system used to support the process of international movement of goods under order confirmation,

Enterprise Business Requirement 6
monitoring, status updates, and performance measurement. Thirdly, there are also some
international suppliers that are also part of the outbound logistics (Lavassani, Movahedi &
Kumar 2009, pp. 85–98).
Marketing and sales
Marketing and sale as value chain element for Woolworth can be divided into three
levels. Firstly, the first level of products marketing and sale is done through companies stores
that are spread throughout Australia. Woolworth has many stores and some are (BWS, Dan
Murphy's, Woolworths Liquor, Woolworths, Countdown (supermarket), Thomas Dux Grocer,
Food For Less, Flemings among many more. Secondly, the company has an online business
platform that the business use to market and sells its products throughout the region. Moreover,
the business uses its various online platforms fitted with e-commerce software that allow
purchase or order of products. Lastly, the international business marketing department focuses on
marketing and selling products through its international store outlets mostly based in New
Zealand (Woolworths Limited 2018).
Service
Service as part of the value chain of the can be described based on the various services
that are offered in Woolworth company. Firstly, customer service is a primary service that is
offered to customers and includes after sale services. There are many different after sale services
that are offered to a customer that entails delivery service for some customers while some
customers buy products through an online platform. Secondly, in-house customer services are