Woolworths Group: External and Internal Factors and Impact on External Environment

Business in practice
INTRODUCTION
Business is a method which helps to generate the revenue in order to maximize the production and growth of the
company. Business in practice is an activity performed by employees and management team to achieve business goals.
It is used to be made with the employee engagement to make profit and business growth. The present report will give
detailed information about Woolworths group deals in retail sector, Australia. Woolworths provides healthier food and
groceries item. Further, the report will discuss the external and internal factors effect specific organization. With the
help of PESTLE analysis, the company can evaluate various factors that affect business. At last, the case study will
describe the different ways in which Woolworths can impact on the external environment.
1. Discussing the external and internal factors effect an Organization
Political factors
 Minimum wage and
anti-laws
 Ban of single use plastic
Economic factors
 Infrastructure quality
 Economic growth rate
Social factors
 providing them fresh fruits
and vegetables to health
conscious population
Technological factors
 Artificial intelligence
 Machine learning
Legal factors
 Changes in employment
 Customer’s safety and
privacy
Environmental factors
 Initiated advanced systems
like HVAC system
 Natural refrigeration
 Focus on promoting sustainable farming and agriculture
practices
 Promoted programs where wastage of food is turned into green
energy
 Enhanced and encourage innovation
 Eco-friendly products by utilizing recycling method
 Provide employment to needy people
 Reduce inputs such as pesticides and chemicals
 Provides benefits to needy people such as healthcare and
education
Strengths
 Facilities to its loyal
customers
 Brand loyalty programs
Weaknesses
 Heavy competition in
retail marketing
 Limited global presence
Opportunities
 New stores in different
geographical areas
 Seek growth and
development through
strategic decision
Threats
 Rapidly change in trends
and technology
 Increasing material costs
 Changes in laws and
policies
2. Different ways in which Woolworths can impact on the external environment.
CONCLUSION
To conclude, it can be stated that PESTLE and SWOT analysis is a
planning and business tool used by company in order to collect detailed
information about possible impact of the factors on a company. This makes
it easier for firm to prepare for any issues caused by these internal and
external factors. With the help of these strategies can encourages strategic
thinking. By evaluating the report, it is concluded that these techniques
allow an organization to spot an opportunity in order to compete in market
to make its market position high. Further, it is analyzed that company can
improve its business, marketing, workforce planning, product and market
development by utilizing these methods. By identify source of information
and specific options the company can meet the required trends. To be
effective in business operations company needs to keep track on laws and
perform methods on regular basis.

NOTES:
1. Discussing the external and internal factors effect an Organization
PESTLE analysis
Woolworths PESTLE analysis evaluate the different factors and also helps to understand
market dynamics and develop its business continuously. It is a tool used by company to gain a
macro picture about company environment (Cheba and et.al., 2021). It allows a firm to form an
impression of various factors that might affect a new business and its activities. In today's
marketing strategy, before any kind of plan can be implemented, it is essential to conduct a full
analysis of situational scenario. If Woolworths needs to differentiate from the competition, then
they must respond and measures the changes in the macro environment. These techniques will
help them to have a competitive advantage over other retail company.
Political factors- Political factors involves trade restriction, tariffs and tax policy. These
factors will determine the extent to which a local government may influence an organization.
Non-tariff trade barriers include bans and exports restrictions (Bonfante and et.al., 2021). There
are several political factors affecting Woolworths business. Due to ban of single use plastic led to
a certain slowdown during year. Now it’s time for retail sector to start working towards
alternative options of packaging. Due to reduction and stability in fuel prices have provided
benefits to the company and maintain high profitability. Because of trade war many foreign
investors are already reluctant to invest in ventures of Australia. Due to minimum wage and anti-
laws related to retail sector can impact the company.
Economic factors- This factors include interest, inflation, wages and unemployment or
cost of living. Due to rise in the inflation rate would affect the way companies price their
services and products (Friedler, 2021). Additionally, it would also affect the purchasing power of
customers and may result in a change in supply models for economy. The company initiated
different loyalty programs in order to retain its market share in competitive business.
Woolworths has managed to gain the customers trust and satisfy them as per customer needs,
habits and experience. Due to higher stock loss, the company claimed to have made increase its
sales by 3.4% reduction in gross profit. Because of infrastructure quality and economic growth
rate the company get affected.
Due to pandemic COVID-19 the economic condition of Australia is challenging so does
for companies. This has a negative impact on development and growth of company.
Additionally, it has also impacted the sales growth rate and sustainability (Linder and et.al.,
2021). In this case, the firm is totally dependent on its smart stores and online platform to attract
customers by offering them varieties of goods to regain its growth.
Social factors- This factors involve career attitudes, health and safety, population growth
rates. With the help of these factors company can plan their marketing strategies and analytics in
a better way. They also highlight the company's local workforce and its activities. Shared
attitudes and values of the population plays a vital role in how marketers will understand the

customers’ needs and how to design marketing strategies (Malik and et.al., 2021). Due to heavy
competition, customers are moving towards healthier options, related to variety and quantity or
quality products or services.
Woolworths managed to capture this drastic change in trend and work effectively in order
to satisfy customers by providing them fresh fruits and vegetables with the help of its campaign
named as grower fresh campaign. Variety of products was introduced by the company to satisfy
the needs of health conscious population at reasonable price and discounted rates.
Technological factors- It includes development in technologies and innovations, thus,
these factors can impact operations of business (Phan, 2021). Innovative ideas like artificial
intelligence, machine learning and others being made in the field of technology. If the company
fails to match up the market trend, customer trend it may lose its market position and reputation.
Woolworths established the concept of smart stores in order to make their groceries stores safer
with help of iPad designed in new way with inbuilt cameras.
The company has provided benefits like free home delivery and online servicing 'shop
and go' that has been improved to decrease the hassles of online shopping faced by customers. It
is evaluated that the company should speed not only do analysis of technologies but also keep a
track on the speed at which technology disrupts (Sari and et.al., 2021). With the help of this
technique the company may give little time to be profitable and enhance its performance.
Legal factors- It includes imports/exports and resources and taxation, have both internal
and external sides. Due to this, certain laws made by government have effect the company's
environment. The business has to follow few strict policies to overcome the possibilities of legal
issues. The management team of Woolworths needs to follow policies and rules strictly to
enhance positive employee management. A company needs to careful before entering market as
it can lead to theft of firm's secret and data (Shadman and et.al., 2021). While making companies
laws it is essential to set rules and regulations by which a staff member can make strategies.
The present company follows different rules and regulation, policies, norms strictly in
order to avoid any sort of legal claims against their services by keeping their stocks up to date.
Due to changes in employment, customer’s safety and privacy, money laundering will have
direct impact on company's working and its operations (Vera-Valdés, 2021). On the other hand
the company focuses on quality management in order to satisfy the customer needs.
Environmental factors- It includes energy consumption regulation, waste disposal laws
and environment protection act. Different business market has various rules and policies which
can affect the profit margins. This factors also includes climate changes and weather that affect a
business operation. Before entering new markets and launching new services or products the
company should carefully examine the standards of environment that are required to business
operations. Nowadays, corporate social responsibility has been made compulsory for every
company due to increase in global warming. There are various environmental factors such as
climate changes, recycling, weather and green or ecological products. The present company have
launches ecological items which is beneficial for atmosphere. The company focuses on carbon
emission level in business operation in order to make eco-friendly environment.