Strategic Management of Retail Industry: Macro Environment Analysis of Woolworths Supermarkets

This report provides an insight into strategic management of the retail industry with specific reference to Woolworths Supermarkets. It includes macro environment analysis of the retail industry covering political, economic, social, technological, environmental and legal aspects.

Running head: STRATEGIC MANAGEMENT
Strategic Management
Name of the Student:
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Table of Contents
Introduction:....................................................................................................................................2
Macro Environment Analysis of Retail Industry.............................................................................2
Political:.......................................................................................................................................2
Economic:....................................................................................................................................3
Social:...........................................................................................................................................3
Technological:..............................................................................................................................3
Environmental:.............................................................................................................................3
Legal:...........................................................................................................................................4
Conclusion:......................................................................................................................................4
References:......................................................................................................................................5

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Introduction:
The aim of the report is to provide an insight into strategic management of the retail
industry with specific reference to Woolworths Supermarkets (woolworthsgroup.com.au, 2018).
It is a chain of grocery stores in Australia owned by the Woolworths Limited that represents a
compilation of chains, brands and divisions. Woolworths Limited had its inception in the year
1924 under the name ‘Wallworths Bazaar Ltd’ that was an internationally acclaimed play in the
name of F.W. Woolworth. Later on, the company was renamed Woolworths Limited. The
increase in the number of branches of the company across Australia led to the growth of the
customer interest.
Woolworths primarily sold grocery items that included fruit, vegetables, packaged food
and meat. Besides, the company also sold DVDs, magazines, beauty and health products,
stationary items, baby and pet supplies and household products. The supermarket chain now has
close to 1000 stores across Australia. Woolworths in fact represents the largest retailers of food
in Australia. The target market of Woolworth represents the high-income groups with a living
standard measure between eight and ten. The retailer also plans targeting two other market
groups that includes the group with lower measure of living standard and the increasing middle
class black population.
Macro Environment Analysis of Retail Industry
Political:
The political situation helps in shaping the business environment of the retail industry
(Bason, 2018). The industry experiences growth when there is political stability and the trading

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partners and the foreign investors’ shows immense interest in carrying business and activities
related to business. Political disturbance however discourages business in entering the market.
Since, Woolworths operates in a stable market so there are lesser chances of experiencing
business loss.
Economic:
The financial crisis at the global level had serious impacts on the financial aspects of
retail business (Shin, 2014). The financial crisis had a major impact on the total sales of the retail
industry. However, the retail industry of Australia maintained greater stability and thereby
supported Woolworth to continue with the business despite suffering a setback in UK market.
Social:
The customers act as the vital revenue source of the retail industry and hence the
identification of their needs ensures sustained profitability (Juan Ding et al., 2014). In this aspect,
Woolworths recognized the significance of customer experience and introduced necessary means
for need fulfillment thereby emphasizing the aspect of the customer delight that increases the
profitability and sales.
Technological:
Introduction of newer forms of technology like usage of Radio-frequency
identification (RFID) and the integrated service oriented architecture enhances the customer
shopping experience in a retail outlet. Woolworths in order to gain a stronger market position
adopted self-service checkout (Dunn, 2018).

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Environmental:
The environmental friendly practice that reduces environmental harm has a positive
impact on the retail industry (Ferguson & Souza, 2016). Woolworths being a part of the retail
sector not only ensures minimizing carbon footprint, ensures reduction of natural resource like
water and undertake recycling activities.
Legal:
The policies of taxation and the regulations of employee and recruitment management
represent one of the key frameworks of legal aspects for the retail sector. Besides, requirements
of food licensing also holds importance in this sector (Charlebois et al., 2014). Woolworths
abides by all the legal policies while opening newer outlets.
Conclusion:
To conclude, one can say that Woolworths has a remarkable business strategy that helps
it analyzing the various external factors. From, the macro analysis it is visible that the retailer
makes use of every opportunity in determining its future growth.

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References:
Bason, C. (2018). Leading public sector innovation: Co-creating for a better society. Policy
Press.
Charlebois, S., Sterling, B., Haratifar, S., & Naing, S. K. (2014). Comparison of global food
traceability regulations and requirements. Comprehensive Reviews in Food Science and
Food Safety, 13(5), 1104-1123.
Dunn, M. (2018). New technology from Aussie company will make it impossible to steal from
self-serve checkouts. [online] Available at:
https://www.news.com.au/technology/innovation/inventions/new-technology-from-
aussie-company-will-make-it-impossible-to-steal-from-selfserve-checkouts/news-story/
dd4ed934c1d17242bfd09bc3c4a7624c [Accessed 2 Aug. 2018].
Ferguson, M. E., & Souza, G. C. (Eds.). (2016). Closed-loop supply chains: new developments
to improve the sustainability of business practices. CRC Press.
Juan Ding, M., Jie, F., A. Parton, K., & J. Matanda, M. (2014). Relationships between quality of
information sharing and supply chain food quality in the Australian beef processing
industry. The international journal of logistics management, 25(1), 85-108.
Shin, H. S. (2014). The second phase of global liquidity and its impact on emerging economies.
In Volatile Capital Flows in Korea (pp. 247-257). Palgrave Macmillan, New York.

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woolworthsgroup.com.au. (2018). Retrieved from
https://www.woolworthsgroup.com.au/page/about-us/our-brands/supermarkets/
Woolworths