Industry Analysis of Woolworths: Porter 5 Force Analysis

Running head: STRATEGIC MANAGEMENT
Woolworths
Strategic Management
8/6/2018

STRATEGIC MANAGEMENT 1
Table of Contents
Industry Analysis.......................................................................................................................2
Porter 5 Force Analysis..........................................................................................................2
Buyer’s Bargaining Power.................................................................................................2
Supplier Bargaining Power................................................................................................2
Threats of New Entry.........................................................................................................3
Competition among Present Companies............................................................................3
Threat of Substitute............................................................................................................3
Conclusion..................................................................................................................................3
References..................................................................................................................................4

STRATEGIC MANAGEMENT 2
Industry Analysis
The grocery stores and supermarket industry of Australia are the most competitive industries.
The fast development and growth of ALDI from last some years has considerably changed
the whole industry. ALDI has evolved in terms of popularity, majorly because of its
discounted private-label products. The growth of ALDI has enforced the two recognized
giants of the industry, i.e. Coles and Woolworths, to reduce their prices and increase the
range of their private-label product (Retail World, 2018). Small chains of the supermarket,
like Food works, have struggled a lot to compete in the price-intense industry. Besides this,
the profit margins of the industry have dropped in the last five years as companies have
decreased the prices and adopted lower margins to remain competitive in the market (IBIS
World, 2018).
Porter 5 Force Analysis
The Porter five forces investigative tool evaluates the present position of the whole industry
and the conducts in which diverse factors influence its performance settings (Omsa, Abdullah
& Jamali, 2017). The examination of the retail industry of Australia by using this
investigative tool is performed below:
Buyer’s Bargaining Power
The power of bargaining of the buyer with respect to the retail industry of Australia is
considerably higher because there are various retail stores and supermarkets that offer general
products to the customers. As customers have various options to choose from, their power of
bargaining has been considerable higher (Mills, 2003).