Digital Business Analysis: Woolworths' Strategy Against Amazon's Entry

This report provides a detailed digital business analysis focusing on the competitive landscape between Woolworths and Amazon in the Australian grocery market. It examines the impact of Amazon's entry, particularly through price reductions, on Woolworths' market share and revenue. The analysis identifies key issues faced by Woolworths, including poor online customer service and inadequately trained staff, and proposes solutions such as enhanced customer interaction through the website and comprehensive employee training programs. The report outlines a control process for implementing these solutions, including involvement, target setting, focus, effectiveness, and management by exception. It also provides a cost and timeline analysis for the proposed solutions, as well as clarifies the roles of Woolworths' employees in the implementation process, ultimately aiming to help Woolworths maintain its customer base and effectively compete with Amazon. The report concludes by summarizing the key findings and recommendations.

Running head: DIGITAL BUSINESS ANALYSIS
DIGITAL BUSINESS ANALYSIS
Name of the Student
Name of the University
Author Note

1DIGITAL BUSINESS ANALYSIS
Table of Contents
Introduction....................................................................................................................2
About the companies......................................................................................................2
Industry analysis.............................................................................................................3
Analysis of the two issues..............................................................................................3
Solution provided to the two issues...............................................................................5
Control process used for the solutions...........................................................................6
Costs and timeline of the solutions................................................................................7
Role to be played by employees of Woolworths...........................................................8
Conclusion......................................................................................................................8
References....................................................................................................................10

2DIGITAL BUSINESS ANALYSIS
Introduction
The supermarket industry is Australia is being influenced in a huge manner by the
entry of various organizations. The levels of competition in the industry have also started
increasing in the few years with respect to the products that are offered to customers and the
prices as well. The international organizations have a huge influence on the prices of various
products and costs related to manufacture of products as well (Aguinis, Edwards and Bradley
2017). Aldi is an organization that is able to provide major levels of competition to the
various Australian supermarkets based on the variety of products as well. The report will be
based on the analysis of the impact that Amazon has on the major Australian supermarkets
like Coles and Woolworths. The reduction of revenues gained by the two organizations due
to entry of Amazon in the grocery industry will also be discussed in the report in detail
(Barrick et al. 2015).
About the companies
Amazon.com Inc. is a multinational American technology based organization that is
based in Seattle, Washington. The company mainly focusses on providing services related to
cloud computing, e-commerce, artificial intelligence and digital streaming. Amazon has
gained its position among one of the Big Four Technology based organizations along with
Apple, Google and Facebook. Amazon is well known for the disruption that the organization
has been able to form of the industries that are well-established in nature (Amazon.com
2019).
The plans related to entry of Amazon in the grocery industry of Australia has a major
impact on two major Australian organizations like Woolworths and Coles. The report will be
mainly related to the detailed discussion based on major issues that are being faced by
Woolworths due to the lower priced offerings of Amazon (Ibisworld.com.au 2019).

3DIGITAL BUSINESS ANALYSIS
Industry analysis
The growth of grocery market of Australia is predicted to amount to around 5.8
Billion Dollars within the year 2020. The huge growth is also based on the increase of online
grocery stores in the industry that have a major impact on the behaviour of consumers. The
retailers have also started strengthening the levels of investments that are made in online
shopping activities and organizations as well. Australia shoppers have also started shopping
from different channels that are available for them. The average levels of online basket in the
country have increased by up to three times due to the convenience that are being provided to
them (Ibisworld.com.au 2019). The lifestyles of Australian shoppers have been able to play a
major role in the growth that is experienced by the grocery market of the country. The high
usage of smartphones is considered to be a major factor that has an impact on the operations
of Australian grocery organizations.
The increasing usage of online shopping websites for fulfilling shopping needs of the
consumers is able to influence the organizations like Woolworths and Coles
(Ibisworld.com.au 2019). The usage of technologies in different services provided by the
grocery organizations include click-and-collect based solutions that are able to increase the
speed of shopping of the customers. The entry of online organizations in the grocery market
of Australia has however been able to enhance the levels of competition that are faced by the
physical retail organizations Coles and Woolworths. The market has been affected in a huge
manner by the convenience levels that are offered by the online retail based organizations
(Ibisworld.com.au 2019).
Analysis of the two issues
Amazon has been able to disrupt the operations of Woolworths in the Australian retail
organization in the modern competitive environment. Woolworths supermarkets is a grocery

4DIGITAL BUSINESS ANALYSIS
chain that is mainly owned by the Woolworths Group and was founded in the year 1924. The
organization has been successful in gaining more than 80% of the total market shares along
with another major organization Coles. The major disruptions had been caused in the retail
and grocery industry of Australia due to operations of Amazon and different products that are
offered to the customers and the levels of convenience that are developed (Albrecht et al.
2015). The two major issues that have been faced by Woolworths Group due to the
operations of Amazon are as follows,
 Poor online customer services – The customers of Woolworths have
complained about the services that are provided to them online. The major
complain was related to the ways by which the ordering process do not let
them select the sufficient products that are able to fulfil the needs and
demands of the consumers. The engagement of employees with the customers
have a major impact on the services that have been gained by them. The staff
members have not been able to provide effective advice based on the proper
purchase of the products (Chen and Miller 2015).
 Corporate staff insufficiently trained – The staff of Woolworths who are
provided with the responsibility to manage the online operations have not been
provided with effective training related to management of online grocery.
Proper management of the orders that are provided online by the customers
have not been able to support the operations of Woolworths in this case. The
payments that are provided by Woolworths to the suppliers are an important
part of the issue that have been faced by the organization (Engert, Rauter and
Baumgartner 2016).

5DIGITAL BUSINESS ANALYSIS
Solution provided to the two issues
The issues faced by Woolworths have been able to influence the levels of revenues
and profitability that have been gained by the organization in grocery market of Australia.
The issues are also related to the ways by which the presence of Amazon has influenced the
behaviour of the consumers in grocery industry of Australia. The demands of consumers
related to services that are provided to them have been able to affect their behaviour in a huge
manner (Felix, Rauschnabel and Hinsch 2017). The issues related to operations of
Woolworths have been able to play a major role in development of its revenues in the grocery
market and satisfaction levels of the customers as well. The solutions that can be offered to
Woolworths in order to solve the two major issues that have been faced by the company
based on customer services are as follows,
 The first issue is mainly based on the complaints that have been faced by
Woolworths with respect to the purchases that have been made by the
customers. The lack of engagement of staffs is also considered to be an
important aspect that is related to the ways by which Woolworths is able to
meet their demands (Frambach, Fiss and Ingenbleek 2016). The members of
staff have also not been able to provide advice to the customers related to the
various purchases that are to be made by them. The major solution that can be
provided to them in this case is based on the first issue is based on increasing
the interaction levels with the customers. The interaction with customers with
the help of the website can provide opportunities to Woolworths in order to
satisfy them (Helfat and Martin 2015). The enquiries that are made by
customers in the process of purchasing the products can be solved easily with
the development of staff engagement. The company can analyse data related to
past purchases of the customers in order to provide them with suggestions

6DIGITAL BUSINESS ANALYSIS
based on the products that they wish to purchase (Hitt, Ireland and Hoskisson
2016).
 The second issue is mainly based on the lack of training that has been
provided to the staff members or employees. The employees need to be
provided with effective training based on the ways by which online orders can
be managed and the customers can receive the required products as well.
Woolworths needs to be developed effective training programs in order to
manage the various orders that are provided by the customers (Namada 2018).
Proper order management will be possible with the help of effective training
that can be offered to the employees based on various order management
software. The training related to software will be able to influence the speed of
order delivery in order to reach the customers faster. The efficiency of the
staffs of Woolworths based on proper order management will be able to
increase the levels of satisfaction that are provided to the customers of the
organization (Prajogo 2016).
Control process used for the solutions
Control processes are considered to be an important part of the plans that are
developed by organizations in order achieve certain objectives. Woolworths also needs to
develop effective control systems in order to manage the timeline of achievement of the goals
that have been set by the management (Rosenbaum-Elliott, Percy and Pervan 2015). The
major principles related to effective control are as follows,
 Involvement – This step is able to increase the involvement of employees of
Woolworths in the changes that are being made and training that is provided to
them as well.

7DIGITAL BUSINESS ANALYSIS
 Target setting – The targets that have been set based on timeline related to
achievement of the goals of completion of the training programs of
Woolworths.
 Focus – This step is based on the ways by which the symptoms and issues can
be analysed and Woolworths can take steps to solve them.
 Effectiveness – This phase is mainly related to the analysis of the levels of
effectiveness of the solutions that have been implemented and whether the
goals have been achieved by the employees of Woolworths. The efficiency of
implementation of the solutions will also be analysed in this step.
 Management by the exception – This step is mainly related to the ways by
which attention of the management of Woolworths can be directed towards the
needs and areas in which changes are required as well (West, Ford and
Ibrahim 2015).
Costs and timeline of the solutions
Estimated
Quantity
Estimated
Cost per
Unit
Estimated
Subtotal
Time
required
Training Costs
Training Brochures 5,000 $0.15 $750.00 1 year
Trainers 4 $20 $80.00 1 year
Projectors 2 $100 $200 1 year
Computers 2 1 year
Training Costs Total $830.00

8DIGITAL BUSINESS ANALYSIS
Role to be played by employees of Woolworths
The solutions that have been suggested to Woolworths are mainly based on the
training that has to be provided to the employees so that they are able to improve the
satisfaction levels of customers in an effective manner. The implementation of the solutions
in a proper manner is based on the collaboration that is developed among the staffs and the
management of Woolworths. The development of proper training programs will be able to
play a major role in improvement of the advice that is provided to the customers based on
products that can purchase from the app or the website of Woolworths (Wolf and Floyd
2017).
The analysis previous purchases will be done by the operations department of the
organization. The employees who are a part of the operations department of the firm will
collect the data and use it in order to provide suggestions to the employees. The purchase
based suggestions that are offered to the customers will be helpful for the ways by which
Woolworths can maintain the customer base in order to compete with the online retail
organization like Amazon. On the other hand, training will be able to increase the levels of
understanding of the employees based on order management. The orders that are provided by
employees will be analysed and provided to the customers in an efficient manner and within
less amounts of time (Namada 2018).
Conclusion
The report can be concluded by stating that the issues that have been faced by
Woolworths due to disruptions caused by Amazon can be solved with the help of
collaboration between employees and then management. The training process that is
developed in the organization will be able to play a major role in the ways by which
employees can form an effective relationship with the customers. The customers can play a

9DIGITAL BUSINESS ANALYSIS
major role in maintaining the revenues of a retail organization like Woolworths in order to
face the competition in the industry.

10DIGITAL BUSINESS ANALYSIS
References
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11DIGITAL BUSINESS ANALYSIS
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