Woolworths Assignment 2022

Woolworths

Retail Industry
The retail industry sector is a distribution of finished products which includes the general
retailer, departmental stores, specialty stores, and discounted stores. Retail industry deals in
selling the consumer goods and services to consumers on a daily basis and provides the
products and services conveniently to consumers. Woolworth’s industry deals in the retail
sector in Australia. Australia is a domestic market of Woolworths.
In Australia, there are many grocery supermarket stores where customers can buy online and
offline. The supermarkets are Indo-Asian Grocery store, Woolworths, Independent grocers of
Australia, Foodworks Supermarkets and Tesco. In Australia, Woolworth is a supermarket
which is owned by Woolworths Limited. It was established in 1924 by opening an initial
store in Sydney’s Imperial Arcade (Graves and Shan, 2014). Its headquarter is in Bella Vista,
Australia. Woolworths mainly deals in selling groceries like packaged foods, vegetables,
fruits but also sell magazines, health and beauty products, and other household products,
stationery items. They have almost 1000 stores in Australia as supermarkets and convenience
stores. Woolworths is also known as Woolies and it is the largest supermarket chain in
Australia. The strength of the company is they deal in a broad range of products and services
and they have a strong commitment to environment and sustainability. They have an
opportunity to leverage big data analysis for efficiency and enhance the experience
(Grimmer, 2018). All the information about stores and supermarkets are available online
where the customers can know about the stores.
The aim of Woolworths is to be the heart of the community and the objective is to improve
network efficiency to ensure for its customers. They had invested a large amount in supply
chain management systems and affect all areas of the company.
Retail industry sector in the domestic market is an effective and growing industry in
Australia. For the growth and development of business in the international market, it is
necessary to do the porter five forces analysis in the international market before entering into
it (Hahn, 2013). Strategies are adopted to make the strategic decision for analyzing the
perfect competition.
Five forces framework helps in understanding the industry competitive in the domestic
market. It is a tool for strategic management which is used for analyzing and understanding

the position of industry in the market. Porter’s five forces are the threat of new entrants,
bargaining power of suppliers, buyers, the threat from substitute products, and rivalry among
the existing dealers.
Threats of new entrants
New entrants bring the new strategies as well as innovation and Woolworth has to adopt the
new and innovative strategies to run the challenges and safeguard the economic edge.
Woolworth can lower the strategy of prices and reduce the costs and provides the new value
proposition to consumers. It is difficult for Woolworths to achieve economies of scale in the
retail sector. Woolworths can tackle an issue of new entrants by building capacities and make
a huge investment on research and development of market. In retailing, there is no
government policy for banning entry in new market and the product differentiation is also
insufficient.
Bargaining power of suppliers
There are factors which assist in determining the bargaining influence of the supplier as the
number of the seller in the international market and which are relative to buyers. In the retail
sector, the bargaining power of suppliers is weak as there are many suppliers in the industry
and large firms like Woolworths can effortlessly have an effect on the suppliers (Gereffi and
Fernandez, 2016). The external factors are based on the large population of the suppliers
which is weak and high accessibility of supply is also weak. Woolworths consider the huge
population of suppliers as they impact on the company as a weak.
Threat of substitutes
In affecting the retail sector, the threat of substitute has a low intensity as Woolworths
provides a broad variety of products and services which have a few or no alternatives. The
factors of external environment which impose the low threat of substitute are because of the
high cost of a substitute and there are low varieties for substitution. It is difficult for the
customers to substitute from brand products of Woolworths to other products. In retail sector,
competition is more because of large number of competing firms and the exit cost is high.
Rivals in market are sells similar products with offers for influencing large number of buyers.
Bargaining power of Buyers