MGMT20132 Innovation and Sustainable Business Development Report 2022

Woolworths Limited
Unit name- MGMT20132 Innovation and Sustainable Business Development
Assessment Number-
Student Name-
Student ID-
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Executive Summary
The main focus of the report under development is on a value proposition strategy that can
provide uniqueness to the products manufactured by Woolworths Limited. It is proposed to
establish a new service in the supermarkets of the company that will not have any direct
impact on revenue but it is expected to increase the number of customers with a higher
growth rate of the new customers. This report has introduced different aspects of the value
proposition strategy under consideration. Different elements of value proposition Canvas has
been described in this report such as competitive advantage, objective, benefits, target
customers, strategic fit, etc.
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Contents
Executive Summary...................................................................................................................2
Introduction................................................................................................................................4
Problem to be solved..................................................................................................................5
Performance analysis.................................................................................................................5
Strategic fit.................................................................................................................................6
Novel value proposition (5 tools and techniques)......................................................................7
Value proposition canvas.......................................................................................................7
Business model canvas...........................................................................................................8
Business environment mapping............................................................................................10
Market segmentation............................................................................................................11
Swot Analysis.......................................................................................................................11
Conclusion................................................................................................................................13
References................................................................................................................................14
Appendix..................................................................................................................................16
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Introduction
Growth and development and business organization are dependent on various factors and one
such factor can be described as the novel value proposition. The value proposition can be
described as a particular product or service provided by an organization to its customers that
creates a competitive advantage. This type of service or product is very unique for the
organization and other organizations are not currently providing such services to the
customers. This type of product or service creates are the different perception of business
organizations among the customers. It helps business organizations to gain the overall target
market in a better and effective manner as compared to business organizations that are
providing generic products and services. A business organization under consideration in this
report is Woolworths limited (Payne, Frow & Eggert, 2017). The main objective of this
report will be to propose a particular to the customers of Woolworths Limited which will help
in creating a novel value proposition for the company.
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Problem to be solved
The primary problem that is required to be solved in the given scenario with the introduction
of a noble value proposition strategy is to cope up with the level of competition in the market.
The level of competition is increasing from time to time with the introduction of new
business organizations. These organizations are using online platforms for selling their
product and service which is a very cost-effective platform of operation is. Business
organizations like Wesfarmers and Woolworth had already invested a significant amount of
their financial resources in opening superstores, retail stores, and general stores. Therefore
such organizations need to ensure that they can invest in certain value proposition strategies
that give them a competitive advantage as compared to online organizations (Palm, 2016).
Performance analysis
Another important aspect of business management concerning any new strategy implemented
by the organization is performance evaluation. As it is already identified in the above section
that this strategy will be implemented as a test phase or introductory phase during the first
three months of operation. This will help in identifying the perception of customers
concerning this value proposition strategy. It is expected that this strategy will be able to
increase the level of customer satisfaction among new and existing customers. In addition to
that growth in the number of new customers also expected to increase over these three
months (Leng, 2017).
Performance evaluation should be undertaken based on the following key performance
indicators-
Satisfaction level of customers- First of all, the satisfaction level of customers should be
measured by the organization by conducting market research. Market research should be
conducted to collect data from the primary sources i.e. directly from the customer. This
market research can be undertaken at 5 retail stores in which self-check in the system has
been installed by the company. The questionnaire can be developed and asked from
customers that are using self-check-in the system and traditional check-in system (Yang,
Evans, Vladimirova & Rana, 2017).
Several new customers- Number of new customers that are increased in the first 3 months of
executing this strategy will also be evaluated by the company. This type of evaluation will be
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undertaken by the organization with the help of new memberships distributed by the
company in these three months of operation. It is very common for business organizations
operating in the retail sector to offer customers new memberships that help them to gain a
membership card through which different offers and discounts can be availed. Comparing the
distribution of these membership cards in the 3 months under consideration with the previous
3 months will help analyse the number of new customers (To, Chau & Kan, 2019).
Strategic fit
This part of the value proposition canvas is related to the strategic alignment of the proposal
under consideration with the general operations of the company. After considering the noble
value proposition strategy under consideration it can be said that the new strategy is in direct
alignment with the general operations. This is because the introduction of new technology is
a very essential part of any business organization operating in the current business
environment (Kavadias, Ladas & Loch, 2016). This strategy is expected to have a very
positive impact on the long term development of the company.
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Novel value proposition (5 tools and techniques)
Value proposition canvas
The element of this canvas are as follows-
Customer profile-
Gains- One of the primary needs of the customer of retail Industries that total time spent by
them in the check-in lines is significantly higher as compared to the shopping time that they
require. It can be said that it will be very beneficial for the organization if they can reduce the
time that they require in getting the bill and making the payment with the use of technology.
Pains- Customer wants to reduce overall shopping time and customers of other organizations
such as farmers will move to Woolworths if this value proposition strategy can reduce the
time of shopping.
Customer jobs- Businesses need to ensure that their operations are changed following the
change in the external business environment. Technological factors are some of the most
important factors associated with the external business environment. Introduction of new
technology in day to day operations of a business organization is very important as over the
period every business organization will be required to ensure that they are providing high-
tech services to the customers (Dhar, 2019).
Value map
Gain creator- The introduction of the self-check-in system will have a positive impact on the
level of competition by providing a competitive advantage to business organizations that are
operating in this industry. In addition to that currently, Woolworths Limited is ranked in the
second position in terms of revenue-generating retail sector organizations in Australia.
Pain relievers- The overall number of customers is expected to increase significantly with the
introduction of this value proposition strategy. First of all, new technology is always very
popular among customers and customers will prefer to experiences such as technology
(Andrews, 2018). In addition to the overall time consumed by a single customer in
supermarkets of Woolworths Limited is expected to reduce significantly which will increase
the number of customers that are visiting the supermarket.
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Product and service- The introduction of this technology at the earlier faces will be beneficial
for the organization as customers generally preface and Associate a particular Technology
with an organization that is introduced to such technology in the market.
Business model canvas
Key partners- IT Department of the organization will be the primary partner involved in the
development of this system. There will be no requirement or association with any external
partner for the development and installation of the system.
Key activities- Woolworths Limited is a business organization operating in the retail market
in Australia. The main focus of this report will be on the supermarket segment of this
organization and proposing strategies that will help in the creation of a value proposition.
Woolworths Limited is one of the largest retail sector organizations operating in Australia. It
is considered as the second largest organization in terms of generation of revenue after
Wesfarmers Limited
Value proposition
In the given scenario proposed value proposition is a particular service that will be provided
to all the customers that are visiting supermarkets of the company. The service under
consideration will be called as self-check-in service. With the help of this service customers
visiting the supermarket can easily check in the product and services purchased by the
supermarket. This facility is expected to decrease the time spent by a particular customer in
the check-in line significantly as they are checking the product and services themselves and
make payment through online platforms or cards (Larson, 2019). This type of service is not
currently introduced in Australia among other business organizations. Various other
organizations are operating on a global level such as Walmart and Tesco Plc. that are using
this service to attract more and more customers.
It was also identified by these organizations that the overall level of customer satisfaction can
be increased significantly with the introduction of the service. In addition to that this service
is also working as a marketing strategy for the organization has more and more customers are
visiting their stores as it will help in saving time in shopping (Wang, Harris & Patterson,
2019).
Customer segments
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Another important aspect of developing a particular value proposition strategy for any
business organization is to identify target customers. The target market of retail sector
organizations is highly diverse in terms of age, gender, race, sexual orientation, etc. Target
customers in this value proposition strategy can be divided based on age. This is because
generally, older people will prefer to use the older model of check-in systems.
Key resources- IT management resources- In the given scenario it will be essential that the
information technology department of the organization is using their knowledge resources as
well as human resources for the completion of the system under consideration and its
installation within the estimated period.
Channels- Marketing channels that will be used for the promotion of the product will be
basic channels that are being currently used by the organization. Current marketing channels
of the company have been very successful for the organization and it is expected that this
channel will be successful for the proposed strategy (Nasution & Mahaperdana, 2019).
Cost- The overall cost of operation estimated in the installation and development of the
system under consideration is estimated to be $1 million. The Board of directors has allowed
using retained earnings of the organization as a source of financing in this project.
Revenue streams- As it is already discussed that direct commission or additional charges
will not be taken by the organization from customers for the use of self-check-in line systems.
It is estimated that the number of customers will increase significantly over the period and it
will compensate for the amount that has been invested by the company (Carter & Carter,
2020).
Business environment mapping
Macro-economic factors- Macro-Economic factors that will be associated in the given
scenario will be the purchasing power of customers. The business environment in which the
organization is operating is constant and the introduction of this technology did not have any
positive or negative impact on the environment. It means that the overall purchasing power of
the organization will remain the same and business organizations cannot start an additional
amount for use of self-check-in systems. Therefore it can be said that management is
expected to generate revenue with the help of an increase in the number of customers due to
the introduction of Technology rather than charging customers for using the self-check-in
systems.
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Key trend- After this analysis, currently the trend among the people is to use Technology as
part of their daily life. In addition to that use of technology in shopping has also increased
and the primary objective in the given address to use this trend for the benefit of the
company. During the initial 3 months of operation, it is suggested that only 2 self-check-in
stations should be implemented at 5 locations of Woolworth’s supermarkets (Azulai &
Khazanovitch, 2017). This will help in analysing whether the customers are preferring the
new strategy or not.
Market forces- One of the primary market force that is forcing all the other organizations to
introduce new technology in business is the level of competition. As it is already described
that there are various business organizations are operating in the retail sector of Australia
such as Walmart, Coles, Wesfarmers and various other new business organizations such as
JB Hi-Fi Limited. Based on this industry analysis, it can be set the level of competition in this
industry is significantly higher (Andrews, 2018). With the help of this value proposition,
strategy management of the organization will be able to cope up with the level of competition
and create a competitive advantage.
Industry forces- Level of competition can also be categorized under industry force that is
affecting the operations of the company. Woolworths Limited will be required to introduce a
value proposition strategy that will help them to create a competitive advantage. In the given
scenario self-check-in lines for the customers will be such a value proposition strategy.
Market segmentation
Another important aspect of developing a particular value proposition strategy for any
business organization is to identify target customers. The target market of retail sector
organizations is highly diverse in terms of age, gender, race, sexual orientation, etc. Target
customers in this value proposition strategy can be divided based on age. This is because
generally, older people will prefer to use the older model of check-in systems. After all, the
use of advanced technology can be very difficult for such people. For this purpose, it will be
important to ensure that previous systems are not ignored by the company (Fan et.al, 2019).
During the initial 3 months of operation, the overall staff operating traditional check-in lines
should not be removed by the company. This is because there is a possibility that customers
will not prefer the new changes made by the organization. In addition to the two older people
or a certain category of customers such as cash-paying customers will prefer to use traditional
methods.
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Swot Analysis
Strengths
 The level of experience that has been gained by the organization of the period is
significantly higher as compared to other organizations in this market.
 The availability of efficient financial resources will also be a beneficial factor.
 Information Technology department of the organization has sufficient capabilities to
develop the system under consideration.
Weaknesses
 Management has not used this type of technology in the past.
 This technology can be introduced by other organizations after the announcement made
by the company.
 There is a probability that management will lose customers belonging to the older
generation (Phadermrod, Crowder & Wills, 2019).
Opportunities
 The use of technology among customers is increasing.
 The use of these systems by other organizations in the global market such as Walmart has
been successful.
Threats
 The increasing number of new business organizations.
 Higher bargaining power of suppliers and customers.
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Conclusion
On the overall conclusion of this report, it can be said that the creation of a value proposition
strategy is very essential for gaining a competitive advantage in any business organization.
This type of strategy provides the uniqueness of the product and services introduced by the
organization as compared to other prevailing products offered by the company. Long term
growth and development of any business organization is highly dependent on the uniqueness
of products for the adoption of the products following the external environment. The value
proposition strategy proposed in the given scenario is expected to have a positive impact on
several customers as well as revenue generation capabilities of Woolworths Limited.
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References
Andrews, C. (2018). The end of work or overworked? Self‐service, prosumer capitalism, and
“irrational work”. Sociological Inquiry, 88(4), 649-672.
Andrews, C. K. (2018). The Overworked Consumer: Self-Checkouts, Supermarkets, and the
Do-It-Yourself Economy. Rowman & Littlefield.
Azulai, O., & Khazanovitch, A. (2017). U.S. Patent No. 9,749,597. Washington, DC: U.S.
Patent and Trademark Office.
Carter, M., & Carter, C. (2020). The Creative Business Model Canvas. Social Enterprise
Journal.
Dhar, S. (2019). Identifying the value proposition for a novel sensor-based indoor air quality
improvement service (case: VTT) (Doctoral dissertation, University of Oulu).
Fan, S., Cui, G., Guo, S., Kong, L., Yang, X., & Yuan, X. (2019). Corner target positioning
with unknown walls' positions. The Journal of Engineering, 2019(19), 6143-6146.
Kavadias, S., Ladas, K., & Loch, C. (2016). The transformative business model. Harvard
business review, 94(10), 91-98.
Larson, R. B. (2019). Supermarket self-checkout usage in the United States. Services
Marketing Quarterly, 40(2), 141-156.
Leng, J. (2017). Business model innovation in chinese private art galleries: a dual value
proposition model.
Nasution, R. A., & Mahaperdana, K. R. (2019). DEVELOPING VALUE PROPOSITION
FOR ONLINE CATERING COMPANY. Sustainable Collaboration in Business,
Technology, Information and Innovation (SCBTII).
Palm, M. (2016). Technologies of consumer labor: a history of self-service. Taylor & Francis.
Payne, A., Frow, P., & Eggert, A. (2017). The customer value proposition: evolution,
development, and application in marketing. Journal of the Academy of Marketing Science,
45(4), 467-489.
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Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis
based SWOT analysis. International Journal of Information Management, 44, 194-203.
To, C. K., Chau, K. P., & Kan, C. W. (2019). The logic of innovative value proposition: A
schema for characterizing and predicting business model evolution. Journal of Business
Research.
Wang, C., Harris, J., & Patterson, P. G. (2017). Modeling the habit of self-service technology
usage. Australian Journal of Management, 42(3), 462-481.
Yang, M., Evans, S., Vladimirova, D., & Rana, P. (2017). Value uncaptured perspective for
sustainable business model innovation. Journal of Cleaner Production, 140, 1794-1804.
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Appendix
5 tools and techniques used in the project are-
Value proposition canvas
Business model canvas
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Business environment mapping
Market segmentation
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It will require segmentation of the customers.
SWOT analysis-
Strengths
Weaknesses
Opportunities
Threats
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