Woolworths Analysis: External and Internal Evaluation

This report evaluates the position of Woolworths in the Australian retail industry through external and internal analysis. It discusses the business background, industry environment, competitive environment, opportunities and threats. The report also identifies the resources, capabilities, and main competencies of the company. A suitable information system solution is proposed and evaluated, along with recommendations.

WOOLWORTHS ANALYSIS
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Table of Contents
Introduction......................................................................................................................................3
Part 1................................................................................................................................................4
(External Analysis)......................................................................................................................4
Business Background...................................................................................................................4
What industry it is?......................................................................................................................4
General environment Analysis:...................................................................................................4
Industry Environment..................................................................................................................6
Competitive Environment:...........................................................................................................6
Opportunities and Threats............................................................................................................7
PART 2............................................................................................................................................7
Internal analysis and proposal.....................................................................................................7
Resources of the firm (tangible and intangible)..........................................................................8
Identification of Capabilities.......................................................................................................8
Main 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
Conclusion.....................................................................................................................................10
Reference List................................................................................................................................11
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Introduction
In this jeopardized business environment, the organizations are constantly struggling to stable
their market environment through incorporation of different strategic line on both productivity
and profit section. The current project will emphasize the facts on the Woolworths, which is an
Australia based grocery chain and located in Sydney. The project will evaluate the position of the
organization in the current retail industry of Australia. The report will further evaluate the
internal operation of the organization, which is the basic outline of the organizational success.
Internal operation supports the organization to sustain long term success. In this case, some
factor will recommend based on the status of rivalry as well as operational gap, which are
evident from the impact of both macro as well as micro environmental component. The
organization is conned with the distribution network, inbound logistics and the product control. It
will support the organization to manufacture quality product, which can enhance the distribution
efficiency as well as inventory management. This competitive attribute is valuable for the
capabilities as well as resources, which can be integrated in the supply chain of the company
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Part 1
(External Analysis)
Business Background
Woolworths has considered basement outlets for bargaining and operating their business in
Sydney since 1924. The organisation had market share of 31% in the Australian Super market
chain. They have gained strong market success through the support perfect acquisition as well as
expansion. They are operating their business with the major companies with the brand name
Woolworth’s supermarket, Dick Smith Powerhouse and others. The retailers focused on the
several other options that include sales revenue. As per the current report, they have 21 stores
and generating sales volume of $104million in 2007 and 2008 (Woolworthsgroup.com.au, 2018).
What industry it is?
The function of supermarket industry is to cater and fulfil the daily need of the consumer by
means of consumer driven business attributes. They are working with the intermediary position,
which is effective to foster standard sales growth. As commented by Altuna et al., (2015)
intermediary production includes the revenue growth, which has been earned over last 4 years.
As per the estimated result, the revenue is 4.1%. Woolworths is able to hols standard patter4n of
growth in GDP percentages, which has been also increased to 4.4% and the limit was $78502
million. The organisation has focused on the Franklins and Food Works. As per the current
report, Woolworths is the market leader in the retail industry and their major competitor is Coles,
who hold market share of 23%.
General environment Analysis:
Political and Legal: In this case, political and the legal factors are focused on the legal laws,
which are significant in the overall business operation. The organisations focused on the policies
for undertaking required initiatives on empowerment, employment and other responsibilities.
These criteria are structured to set up the governmental policies. In this case, crusades are
developed for blocking the organisation along with Woolworths.
Economic: The financial factors are discussed in the economic factor. It is dependent upon the
levels of spending in regards to discretionary goods. The consumers trends rae gradually
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changing for depicting high value to consumer. The consumers have high pro9ine to save cist,
which is dependent upon the status of disposable income. In this case, super markets, private
label organisations are structuring and contributing maximum to the overall growth if they can
capable to get major consumer attention.
Socio-cultural Factors: The organisation is prioritised health and well being of the customers.
The organisations have to stock the organic foods materials, which is in high demand among the
consumers. In the current period, this is the most potential threats for the farmers as
supermarkets are doing best to survive in the business environment.
Demographic: The demographics of the Australia are focused on the factors of financial
normality, which includes religion, gender as well as population size. Based on the Australian
assets, the demands and the needs of the consumers are gradually changing (Dixon, 2017). In this
case, changing technology has also created impact on the consumer need as well as demand.
Physical: In the current period, Woolworths is working on the challenging market environment,
where entire growth or expansion plan is focused on the task of production and manufacturing.
Through including these factors the organisation can prioritise the social responsibilities as well.
Global: In this dimension, comprehensive need of the organisation has been considered. These
factors are required to survive in the market through aligning with different consumer need. It is
processed through de-regulation in trading hour (Baldwin and Lopez‐Gonzalez, 2015). It is also
visualised that the organisation offer various kind of product to maintain exponential growth
within global dimension.
Technological:
In the business process, technological factors are significant at all level to achieve standard
business growth. These factors can help the organisation to sharp the competitive edge. In the
dynamic business environment, innovative trends should be harnessed by the organisation to
survive for long term period (Chattell, 2016). In the operational process, such as inventory and
supply chain, various technological innovations have been introduced. In case of Woolworths,
managers have applied green-refrigeration techniques. Therefore, the organisation has proper
support of technological advancement.
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Industry Environment
Rivalry among the existing competitors: In the Australian market, small organisations are tne
potential rival for the organisation. On the other hand, the organisation offers different needs
based on the nature of product and the services. The organisation has prioritised three things to
maintain competitive stability in the market (Gabriel and Drayton, 2016). These three key points
are location or store place, product price and the consumer choice. For instance, it can be said
that rivalry is high due to presence of Coles and Costco in the current market.
Threat of Substitute: In the Australian market, threat of substitute is high as the organisation is
facing several challenges from convenient and special grocery stores. Due to availability of too
many competitors in the market, the products innovation is also increasing. The organisation has
many products to curb competition in the market.
Bargaining Power of Buyers: It is evident that the aggressive sales need to be developed
through Federal government and ACCC, which is required to be done by referring buying pattern
of the company. In the Australian market, the bargaining power of the buyer is lower due to
availability of huge consumer base. Consumers have wide number of choices and they can
compare the product price through e-commerce website.
Bargaining Power of Suppliers: The bargaining power of the suppliers is also low, as the
organisation is dependent upon the multiple local suppliers. In addition, Coles and Woolworths
control 81% market share in the grocery retail industry (Stevens and Johnson, 2016). Through
the intermediary’s selection, products can be delivered in proper time.
Threat of New Entrants
The intensity of the threat is low and it will be sustained in future period. The organisation has
huge opportunity to incorporate more operational as well as technological involvement.
Competitive Environment:
In the current period, number of poor consumers is increasing and direct sale is getting
importance. In the current period, Coles is the US based retailer, who can create difficulties for
the organisation to retain the consumers. The organisation is using the social networking sites for
handling the promotional task. The organisation promoted themselves through advertuse and
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sponsorship. Probable threats are evident here due to availability of augmented outcome from
food and non food products. The organisation is also opening new stores and handling the online
stores as well. International companies are also taking Woolworths as major rivals in the grocery
retail market.
Opportunities and Threats
The opportunities and threats available for the company Woolworths display their ability to
overcome the threats by using the opportunities to strengthen the functioning of the organization.
Some of the biggest opportunities available for the functioning of the organization comprises of
the use of innovative technologies. The utilization of the innovative technologies would allow
the company to control the free trade agreements and that would allow them to enhance the
functioning of the management (Saebi, Lien & Foss., 2017). The increasing trends of using
online portals for the benefits of the organization have ended up attracting a substantial consumer
in the current scenario.
The biggest threats that are being incurred by the company are irregular supply of the products
and a substantial amount of increase in the price of the raw materials. As there has been, a rising
importance of magnification force in the market so there is a possibility that the company would
be accustomed to limited sharing and at the same time, there is a threat of ensuring timely
delivery to the customers (Rodríguez, Paredes & Yi., 2016). Another biggest threat incurred by
the company comprises of reinforcement of less skilled workers that could affect the effective
functioning of the organization. Meanwhile, it is also important that the company is able to
provide good quality products to the people in order to maintain their reputation in the market.
PART 2
Internal analysis and proposal
Conducting a proper internal analysis allows in identifying the capability of the internal
environment of an organization and here the use of internal analysis would allow in the
understanding of the factors that contributes in forming the strengths and weaknesses of the
organization. It can be said that the strength of the firm has its foundation based on the proper
analysis of the specific activities that comprise of the factors such as value chain and display the
different processes that were responsible for enhancing the functioning of the organization. The
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year of 2011 stressed on the performance of the company and paid substantial amount of focus o
the business models and philosophies used by the organization (Garnett et al., 2016).
Resources of the firm (tangible and intangible)
The company has decent amount of tangible and intangible resources and the human resources
and substantial amount of innovation in the products of the organization are being identified as
their key aspects. The company has around 3000 stores located all over Australia and New
Zealand (Woolworths.com.au, 2018). The company has managed to gain a customer base of
about 180,000 (Woolworths.com.au, 2018). One of the biggest advantages of the company
comprises of providing the people with good quality products and ensuring that the products are
being checked properly to avoid tampering with the quality before the product reaches the
doorstep of the consumers. The organization intends to shift its focus on the production of certain
products, which will be supported by the important people belonging to the management of the
company.
Identification of Capabilities
The company has the ability to enhance its production techniques and intends to introduce
innovation from time to time. The company is also highly capable of performing recruitment and
selection of talented workforce who would be better in enhancing the productivity of the
company. The company has also managed to maintain their supply chain properly. The
distribution system of the company is also considered highly capable of conducting in bound and
out bound services that would allow them to reach out to the customers on a large scale
(Zarkada-Fraser and Fraser, 2015). The company’s ability to provide good quality products, on
time deliverance system allows them to function better, and gain the loyalty of the customers.
Main Competency Analysis
World Supply Class Chain: This particular section mainly focuses on the innovations and
gaining competitive advantage in the market from the side of the company. The company also
intends to enhance the ability of their supply chain (Kotusev et al., 2016). At the same time, the
company intends to emphasize on decreasing the cost of the products and boost substantial
amount of development in the R&D section of the company. The company also aims to focus on
the choices of the customers.
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Brand Marketing: The Company has the ability to enhance their ability in order to function
better in the retail market and ensure that they can provide good quality eatable products to the
people. The company can enhance their differentiated image by ensuring the fact that they would
upgrade the quality of food by minimizing the prices of the product.
Integration: The organization has the ability to ensure that they can manage deals with
contractors to be able to maintain the synchronization of the sections that would focus on the
manufacturing procedure.
Innovation: The Company has the ability to ensure the fact that they can meet the needs and
requirements of the customers by incorporating innovation in their products.
Propose a suitable information system solution that meets the chosen company needs.
The suitable information system that has been considered viable for meeting the needs of the
company comprises of the Management Information Systems (MIS). This system is being
considered as one of the successful management process available in the market. The company
intends to deal with procured data and generate viable results for the effective functioning of the
organization (Prasad and Green, 2016).
Evaluate the proposed system and provide your recommendations
The current system of the company can be considered as highly advanced and it can be said that
the company is looking forward to enhance the idea of a complete automation process in the
organization with the use of MIS. The process will entirely focus on the controlling, monitoring
and recording the databases that are important to be reviewed for the benefit of the company.
The company can enhance the use of social media to generate the ideas of the customers for the
better functioning of the organization. It will also allow the company to reduce the cost of extra
maintenance charges and the incorporation of proper funds.
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Conclusion
The research presented above provides us with substantial amount of knowledge that is to be
incurred with the help of study on the pricing plan associated with the company named
Woolworth’s group. With the process of the research, it was being identified that the company
has been able to introduce multiple techniques in the market that allowed them to gain
competitive advantage in the market. At the same time, the company has also managed to shift
its focus towards reducing the costs and enhancing the profit structure of the organization. The
organization has also managed to analyze its competitors to ensure that the company
Woolworths’ is also able to maintain its market dominance. The research also focused on the
company’s use of automated information systems that would allow them to gain substantial
amount of work competency in the organization.
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Reference List
Altuna, N., Contri, A.M., Dell'Era, C., Frattini, F. and Maccarrone, P., 2015. Managing social
innovation in for-profit organizations: the case of Intesa Sanpaolo. European Journal of
Innovation Management, 18(2), pp.258-280.
Baldwin, R. and Lopez‐Gonzalez, J., 2015. Supply‐chain trade: A portrait of global patterns and
several testable hypotheses. The World Economy, 38(11), pp.1682-1721.
Chattell, A., 2016. Creating value in the digital era: Achieving success through insight,
imagination and innovation. Springer.
Dixon, J., 2017. Supermarkets as new food authorities. In Supermarkets and agri-food supply
chains: Transformations in the production and consumption of foods. Edward Elgar Publishing.
Gabriel, P. and Drayton, B., 2016. Social entrepreneurship and innovation: International case
studies and practice. Kogan Page Publishers.
Garnett, S.T., Lawes, M.J., James, R., Bigland, K. and Zander, K.K., 2016. Portrayal of
sustainability principles in the mission statements and on home pages of the world's largest
organizations. Conservation biology, 30(2), pp.297-307.
Kotusev, S., Singh, M. and Storey, I., 2016. Enterprise architecture practice in retail: Problems
and solutions. Journal of Enterprise Architecture, 12(3), pp.28-39.
Prasad, A. and Green, P., 2016. On information technology competencies for collaborative
organizational structures. Communications of the Association for Information Systems, 38,
pp.379-399.
Rodríguez, M., Paredes, F. and Yi, G., 2016. Towards Future Customer Experience: Trends and
Innovation in Retail. Форсайт, 10(3 (eng)).
Saebi, T., Lien, L. and Foss, N.J., 2017. What drives business model adaptation? The impact of
opportunities, threats and strategic orientation. Long range planning, 50(5), pp.567-581.
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Stevens, G.C. and Johnson, M., 2016. Integrating the supply chain… 25 years on. International
Journal of Physical Distribution & Logistics Management, 46(1), pp.19-42.
Woolworthsgroup.com.au. (2018). Woolworths Group: Quality Brands and Trusted Retailing.
[online] Available at: https://www.woolworthsgroup.com.au/ [Accessed 6 Sep. 2018].
Zarkada-Fraser, A. and Fraser, C., 2015. Integrating social and economic orientated marketing:
A study of retail management. In Proceedings of the 2000 Academy of Marketing Science (AMS)
Annual Conference (pp. 219-223). Springer, Cham.
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