Woolworths Analysis: External and Internal Environment Evaluation

This analysis evaluates the external and internal environment of Woolworths, an Australian retail supermarket chain. It includes a general environment analysis, industry environment analysis, competitive environment analysis, and internal analysis with a proposal for a suitable information system solution.

WOOLWORTHS ANALYSIS
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Table of Contents
Introduction................................................................................................................................3
PART 1.......................................................................................................................................3
Business background:.................................................................................................................3
What industry is it?....................................................................................................................3
General environment analysis:...................................................................................................4
Industry environment.................................................................................................................5
Competitive environment:..........................................................................................................5
Opportunities and threats:..........................................................................................................6
Part 2:.........................................................................................................................................7
(Internal analysis and proposal).............................................................................................7
The firm’s resources, tangible and intangible:.......................................................................7
Capabilities identification:.....................................................................................................7
Core competency analysis:.....................................................................................................8
Propose a suitable information system solution that meets the chosen company needs........9
Evaluate the proposed system and provide your recommendations:.....................................9
Evaluate the proposed system and provide your recommendations......................................9
Conclusion:................................................................................................................................9
Reference:................................................................................................................................10
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Introduction
The environment of a business needs to consider the internal and external factors affecting
the functions of the organisation that includes managing the business, staffs, demand, supply,
and criteria to satisfy the potential consumer target. The organisation in focus is under
struggles constantly since they need to stabilize the market in this threatened business
environment along with the consideration of different strategic lines that will reflect both
productive and profit section. Woolworths is the organisation in focus in this project. It will
evaluate the position of the organisation dwelling in the Australian industry. Various internal
operations support and outline the success of this organisation. This project has evaluated
these operations in order to realize the operational gap and present the competition that
reflects the evidence to micro and macro environment of Woolworths. Several measures like
the networks or distribution channels, inbound logistics, and product control have been
highlighted at the organisation in order to enhance the manufacture process to produce
improved quality products. It has led the organisation to an improved inventory management
and distribution channel.
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Part 1
Analysis of the external environment
Surroundings of the business
In order to operate the business and bargain, Woolworths works in Sydney through basement
outlets. It started out in 1924, since then the market of this organisation has taken over 31%
of the retail market of the supermarket chain in Australia. The company has been able to
develop a strong hold over the market and success through efficiency in work and product
delivery. The business expansion and acquisition of this organisation has displayed smart
approaches that led to the success of the organisation. It has shared operations with big
organisations like Dick Smith Powerhouse and some others. According to the present
financial report, Woolworths displays 21 effective and active stores that produces sales
volumes worth AU$ 104 million (Woolworthsgroup.com.au, 2018).
Overview of the industry
The industry in focus is that of a supermarket retail market that provides the consumers with
basic requirements for daily life and extraordinary requirements, which is concluded by
customer-driven businesses attributes and activities. These large organisations in the
supermarket retail industry are fostering the complete sales growth of the business through an
intermediary position. The enhanced growth and revenue through the intermediary
production have shown invariable earning in the last four years. The revenue has displayed an
increase of 4.1% during the estimation of the outcomes. The consistency in growth in Gross
Domestic Product (GDP) has displayed a stronghold the organisation has in reference to a
standard pattern. The organisation has shown a limit of AU$ 78,502 million but with a
revenue increase up to 4.4%. Food Works and Franklins have been considered by the
organisation concerning business expansion. The present reports display the effective
approach Woolworths has taken in order to be the industry leader in the retail industry of
Australia. Coles holds 23% of the overall share of the market, which identifies as one of the
competitors in the concerned industry.
Analysis of the general environment:
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Legal and political factors: In the case of this organisation, the political and legal aspects
have highlighted the legal laws and regulations. These laws have influenced the overall
operations of the retail organisation significantly. The organisation has focused on the
different policies that accept the important initiatives reflecting the empowerment,
employment along with the other important organisational responsibilities. The structure of
the criteria sets up the policies of the government as in the current condition the development
of crusades has taken place in order to block the retail organisation by the sides of
Woolworths.
Economical factor: Financial and economical factors are the similar supplement of the
concept depending on the spending levels in the optional products and goods. The change in
the current situation with the customer or consumer trends depicts a larger value to consumer
needs. The customers have proclaimed highly their involvement in the disposal of income to
the market (Schaltegger and Wagner, 2017). In the case of this organisation, the private
organisations or the supermarkets have displayed the contribution to the complete business
growth by making maximum efforts that displays the capability of the organisation to gain
consumer attention.
Demographic: The definition of the demographic environment is determined by the
demographic factors, which include gender and ethnicity in concern. The identification of the
consumer target market in an organisation is determined by the analysis of the demographic
specifications of the industry in order to achieve profits through the products and services
displayed in the market. According to the factors of the market in Australia, there has been a
wide change in the demands and needs of the consumers (Vora and Jayswal, 2018).
Therefore, the current situation displays the technological factors changes that have
influenced the demands and needs of the consumers.
Global: The overall factors that have comprehensively emphasised on the requirements of
the organisation according to the considerations are determined by the global concepts. The
factors that reflect the survival of the market have related to the unique needs of the
customers along with the processed operations during the de-regulation courses in the trading
hour. The organisation offers products that maintain an exponential growth that stays in the
global dimensions.
Socio-cultural factors: The organisation in focus has its priorities towards the well-being
and health of the customers. In addition, Woolworths have taken an interest in the materials
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and food products that are organic in relation to the customer nature biased towards health
based food products (Edge, Newbold, and McKeary, 2014). Changes in the supermarkets in
the current period in order to survive in the constantly changing and growing business
environment are posing as a potential threat for the farmers in Australia.
Physical: According to the current situation, Woolworths is working around the market
environment full of challenges, in which the market displays entire attention on the expansion
of the businesses and growth while concentrating on the innovative ways of production and
manufacture. These factors of the organisational social responsibilities are the priorities of the
organisation, which positively affects the operations of the business.
Technological: According to the current scenarios in the business environment, the
technological aspects have standardised the features of a business that grows significantly
through the operations of the business. The technological factor allows the organisation to
have a competitive edge and advantage over the other businesses in the market. According to
the innovations, the changing trends positively harness the survival of the organisation, which
motivates the organisation with plans and long-term approaches (Jeston, 2014).
Technological innovation dwells in the processes of the operations, which include the supply
chains and the business inventories. The managers of Woolworths have managed to install
green-refrigeration techniques in the structure of the organisation, which supports
implementation of the advancements in technology within its business processes.
Industry environment
The competition between the present market competitors: An organisation like
Woolworths in the market of Australia faces potential competition from the rising small
organisations. In alignment with other factors that display the offers of the organisation,
which display different requirements depending upon the service or the product nature in
alignment with market needs. This organisation has three vital areas that include efficiency in
locating the stores in the market, consideration in the customer valued product prices, and
knowledge of the market or customer needs and requirements. The competition for
Woolworths in the present market of Australia is Costco and Coles.
Substitution threats: In recognition of the market in Australia, the threats posed represent
the dangers that have to be eliminated in the market. The organisations undergo enhanced
changes that have led them to come across several challenges or threats from the convenient
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and special grocery stores (Bryson et al., 2018). The increasing number of the competition in
the market has affected the innovations of the products to increase in the market. The
organisation has resorted to products that are aiding them curb the number of increased
competitors in the market.
Suppliers bargaining power: The bargaining power of the suppliers in the business that
supply the raw materials are displaying low levels of bargaining approach, as the
organisations are not dependent on only one supplier for the supply of the raw materials. The
large organisations like Woolworths and Coles have a control of 81% over the market share
of the retail industry. Hence, the delivery of the intermediate selection of the products is
carried out within a given time.
Buyers bargaining power: The assurance of the increase of aggressive sales requirements
needs development through the federal government and ACCC in order to refer the
purchasing pattern of the organisation. The market in Australia along with its bargaining
power of the buyers is lowered due to the high availability of consumer-based products
within the market. The customers are ensured with a large range of products and choices that
they can manage to compare in the terms of utility and price through various sources and e-
commerce websites.
The new entrant’s threat: The threat of the new entrants has an increased intensity that
lowers the sustained business future chances for the organisation (Christensen et al., 2015).
They have to bring about innovative operations and changes in the manufacturing,
technological, and distribution channels.
Competitive Environment
The direct sales of Woolworths help in highlighting the fact that there has been increase in
the income level of the consumers. In other words, it can be said that poor customers have
increased. Coles, which is the American retailer in the supermarket industry is the arch rival
of Woolworths and has replaced the middle and high management. All these are considered
in regards to competitiveness.
One of the greatest hazards that is being faced by the organization is, the cost of raw
materials is increasing that are require to manufacture the food and non-food items. This is in
turn influencing the profitable boundaries. When recession hits the economy, this process is
going to be helpful that will lead to a growth strategy for the organization. The growth
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strategy is, the organization will be opening up new stores. The organization is facing stern
challenges from the global companies as well.
Opportunities and Threats
The opportunities for the organization lie in the new markets. The new market should comply
with agreements stated down by the government. This will help in adopting many new
technologies. Government agreements are helping the organization to manage trading
agreements that needs to match the performance and system standards. The new customers
base in the market are likely to acquire their products from the e-commerce sites and this fact
is found out using big data analysis. This is helpful in delivering customer-friendly and
effective products. Economic boost depends on the increased expenses done by the
consumers during the time of recession. The marketing department of the organization should
enhance its strategies in order to give a tough competition to the rivals.
Part 2
Internal Analysis and proposal
Internal analysis for a firm is conducted in order to control the strengths and identify the
weaknesses. After evaluating the commotions, the capacity in the relationships can be
measured. This incorporates the entire value chain and introduces different foundations so
that challenging benefits can be gathered. The year of 2011 had a put emphasize on the fact
that vendors needs to be identifies in the trading model.
Intangible and Tangible Resources from the organization
There are some 3000 stores registered under the name of Woolworths in Australia and in
New Zealand. The 3000 stores have some 180000 employees working in it. Human resource
and innovation approved by the organization are the tangible and the intangible resources of
the organization (Sarasvathy et al., 2014). The amount of stores the organization has helps in
increasing the market share for the organization.
Indentifying the Capabilities
The capability of Woolworths lies in the unique production techniques that will introduce
innovation in the organizational structure (Hohenthal, Johanson, and Johanson, 2015). The
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workforce of the organization is talented and the recruitment process is very effective. The
distribution channel and the chains of supply management in the organization are effective
and this helps the company in retaining the brand loyalty among the consumers (Knight and
Liesch, 2016).
Brand Marketing: In any organization, a positive brand image is very important.
Woolworths has concentrated on brand marketing to increase its presence among the
potential consumers (Knight and Liesch, 2016). The organization has ensured that the
services and the products of the organization are of high quality so that demands of the
consumers can be met easily (Zhou and Wu, 2014).
Innovation: The Company has laid importance on meeting the requirements of the
consumers. Innovation is one of the important elements that are necessary to meet the
demands of the consumers.
Integration: Woolworths has put an emphasis on the fact that the company will integrate
smoothly with the suppliers and the contractors. This needs to be managed by managing
different deals with the suppliers and the contractors.
Supply class chain: Woolworths has focussed on to gain competitive advantage in the market
and the company is trying to incorporate innovation in the business by developing the
research and the development department of the organization (Casillas et al., 2015).
Propose a suitable information system solution that meets the chosen company needs
The management information system is quite impactful in meeting the needs of the
organization (Zander et al., 2015). Various processes in the market can be successfully
managed by this system. Necessary data can be procured using the management information
system. SAP will be helpful to meet the needs of the company software with easy and fast
evaluation of work.
Evaluate the proposed system
The current system of the company is technologically advanced and has in-built automation
features. The current management information system monitors, controls, and records the
databases. SAP will help in handling the different forms of the data and bring a better ERP
planning which is important for the improvement of the system control.
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Recommendations
The present retail brand can work on improving the basis of the skills that still exists in the
larger supermarket organizations. In the current scenario, it is possible that social media can
work towards promoting the brand to the common masses. Woolworths can make use of
sponsorship from different areas and advertisements in order to promote its services and
products. Therefore, it can be said that the organization is making use of the emerging
technologies for its promotional activities.
Conclusion
Complete analysis has been done on Woolworths. In addition to this, the strengths and the
weaknesses of the organization have been identified. Woolworths has found out a new
tendency among the consumers and this has happened by offering them with various options
hat is creating a positive impact on the revenue stream of the organization. Along with it, the
present condition of the company has also been analyzed in this project.
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Reference List
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