Strategic Analysis – Woolworths Supermarkets

Running Head: STRATEGIC ANALYSIS - WOOLWORTHS SUPERMARKETS
Strategic Analysis – Woolworths Supermarkets
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1STRATEGIC ANALYSIS – WOOLWORTH’S SUPERMARKETS
Executive Summary
The Australian Supermarket Industry is a thriving one, with new competitors emerging in the
scene every now and then. It is therefore a huge challenge for existing supermarket power
houses to stay ahead in the game and meet the requirements needed to root out all
competition. This report engages in a strategic management analysis of Woolworths
Supermarkets, a leading food corporation in Australia that is headquartered in Sydney. Set up
in as early as 1924, Woolworths Supermarkets is one of the best known names in the fresh
food business in the country. The report carries out an external and internal analysis of the
operations of this supermarket chain which is followed by a value chain analysis, the
identification of different sources of competitive advantage and a vrio analysis of these
sources of competitive advantage. In conclusion the report recommends a number of
developments that need to be initiated for the development of strategic resources, that can
enable Woolworths Supermarkets to compete more effectively with its rivals, including
changes that it needs to bring about in the area of corporate governance to do so.

2STRATEGIC ANALYSIS – WOOLWORTH’S SUPERMARKETS
Table of Contents
1. Introduction.........................................................................................................................3
1.1. Woolworths Supermarkets: Company Structure, Aims and Objectives.....................4
1. External Environment Analysis for Woolworths Supermarkets.........................................4
1.1 Macro Environment Analysis......................................................................................4
2.2 External Analysis of Woolworths Supermarkets using Porter’s Five Forces..................6
3. Internal Analysis of Woolworths Supermarkets....................................................................7
3.1. SWOT Analysis of Woolworths Supermarkets..............................................................7
3.2. Value Chain Analysis for Woolworths Supermarkets....................................................8
3.3. Sources of Competitive Advantage and VRIO Analysis..............................................10
4. Recommendations for Developing Strategic Resources......................................................11

3STRATEGIC ANALYSIS – WOOLWORTH’S SUPERMARKETS
1. Introduction
Woolworths Supermarkets is a renowned Australian grocery retailer that is based in
the city of Sydney and which holds a prominent position in the supermarket industry of
Australia. It was established in the year 1924 by Coles and Woolworths and occupies more
than eighty percent of the shares in the Australian stock market. Woolworths specialty lies in
the sale of packaged foods, frozen meat and fish and both fresh and processed fruits and
vegetables. It also deals in products like stationery items, baby supplies, pet supplies,
household products, beauty products, DVD’s, magazines and health related products. It has
nineteen convenient stores and nine hundred and seventy six supermarkets all across the
country, with every store and supermarket carrying the exact same logo. Woolworth’s
products are available for sale online and are delivered to customers via an efficient and cost
effective home delivery service. Customers can order Woolworth’s products from the
comfort of the home or office and have these delivered to them within a few hours to a few
days. This report shall examine Woolworth’s external and internal operations to gain a
thorough understanding of its strategy and its success in the Australian market. It will
specifically identify sources of sources of cost and differentiation advantage for Woolworths
in the industry and position the company and its competitors in the market
(Woolworthsgroup.com.au, 2018). The report will then proceed to engage in value chain
analysis to identify sources of competitive advantage for Woolworths and a VIRO analysis to
determine the sustainability of such competitive advantages. Finally, the report shall make
recommendations for the development of strategic resources like corporate government
processes for example, that can help it to increase its competitiveness by a considerable
extent.