Strategic Management: Woolworths Supermarkets

Running Head: STRATEGIC MANAGEMENT 1
Strategic Management: Woolworths
Supermarkets

STRATEGIC MANAGEMENT 2
Company Description
Woolworths Limited is an Australia based organization that operates its business operations
retail and supermarkets industry. The organization is operating its business with huge retail
interest across the Australia and New Zealand. In Australian market, it holds second position in
terms of revenues and profits. In addition to retailing, it deals in other sectors as well such as
petrol, hotels, liquor etc. Woolworths Supermarket is one of the most established and beneficial
of Woolworths Limited. This supermarket chain was established in the year 1924. Primarily, it
offers grocery products, health and beauty care products, packaged goods, vegetables, fruits, pet
products and baby products. Today, the company owns 1000 stores in the country by employing
more than 100000 people (Woolworthsgroup, 2018). Now, the company offers its products
online as well and the name of its online portal is HomeShop. As mentioned in the first part, the
company is facing some strategic issues which can affect the growth of company in competitive
retail industry. So, this part recommends the strategic options which the company should use to
resolve those issues.
Strategic Issues
However, Woolworths Supermarkets is operations its business successfully but still the
organization f aces some strategic issues. Two of its major strategic issues are the higher prices
of its products and slow growth of liquor business. Thee strategic issues and strategic options for
Woolworths Company are stated below:
Issue 1: Higher Product Prices
One of the major strategic issues which are confronted by Woolworths is related to the higher
product prices in comparison to its competing brands. This is the major reason that the
organization had been showing very slow growth because of its pries which had been determined
for its products and services in the Australian market. There are some other supermarkets in the
country like Aldi, Coles etc. which are operating their stores as “discounted stores”. These
players are taking the advantage of Woolworth’s higher pricing strategy (Thomas, 2017). In
addition to this, the government in Australia has also restricted the move in setting higher prices
for its products in partnership with Coles that shows the major weakness to Woolworths in
approaching higher level of growth. This strategic issue affects the brand image of the

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organization among the Australian population and they are switching to other discounted stores.
In this way, it led the organization towards loss of brand image, customer base and competitive
advantage.
Strategic Option
In order to deal the issue of higher prices of products, there are two strategic options which are
available to Woolworths Supermarkets. First option is to provide discounted prices and give
them weekly offers. It can be done by keeping the existing pricing strategy. Moreover, the
second available option for the company is to adopt the skimming pricing strategy for its
products so that it can attract more customers towards its products and services (Flemes, 2016).
In the first option, Woolworths can offer its products with its existing higher pricing strategy but
it should offer some discounts and offers weekly and in any festive season. Another option is
skimming pricing under which it can offer the products higher prices in the initial stage and then
lower the prices over the time.
Option 1: Discounted pricing and weekly offers along with existing pricing
strategy
Resources
Along with its higher pricing strategy, Woolworths can provide the discounts to its customers.
The company needs to manage its financial resources effectively. In addition to this, it can offer
provide free products with the primary product. Discounts can be done on the basis of customer
loyalty, product quality and they need be tied to specific promotions.
Acceptability
These offers and discounts should not receive any objection from Woolworth’s related
stakeholders like suppliers, franchises, subsidiaries etc. The company needs to ensure that all the
people related to organization are ready to accept the changes in product offering (Toptal &
Çetinkaya, 2015).
Coherence
This strategic option would be beneficial for both the company and its customers. The customer
will be attracted towards the company’s products as they will be able to purchase the products on