Amazon vs Woolworths: Competitive Analysis and Strategy for Woolworths

This report provides a detailed analysis of the competitive landscape between Amazon and Woolworths in the Australian grocery market. The report begins with an overview of Woolworths, its market position, and the challenges it faces due to Amazon's entry. Key issues such as Woolworths' website usability and the need for better-trained staff are discussed. The report proposes innovative solutions, including website improvements (such as user-friendly design, customer service, and promotional offers), staff training, and the implementation of a robust digital strategy. A timeline for implementing these strategies is provided, along with the associated costs. The report emphasizes the crucial role of the business development and human resources departments in executing these strategies, including market research, vendor management, employee training, and aggressive marketing. The conclusion summarizes the key findings, highlighting the importance of innovation and strategic adaptation for Woolworths to successfully compete with Amazon and maintain its market share.

Running Head: AMAZON VERSUS WOOLWORTHS
Amazon versus Woolworths
Name of the student
Name of the University
Author’s note

1AMAZON VERSUS WOOLWORTHS
Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Overview of the company............................................................................................................2
Key issues of Woolworths that needs to be resolved......................................................................4
Website not so friendly................................................................................................................4
Insufficient trained staff...............................................................................................................5
Timeline for the new strategy......................................................................................................7
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

2AMAZON VERSUS WOOLWORTHS
Introduction
The supermarket business is a powerful industry in the FMCG market. But the
supermarket and the grocery store have low profit margin as compared to other giants in the
market. The assignment gives details about the Australian supermarket Woolworth, which is
facing difficulty in the market due to the entry of the major player in the digital business,
Amazon. Amazon is an American multinational corporation with around 750,000 staffs
(Phillipov, 2016). This company mainly focuses on e-commerce and has even succeeded in
expanding its business through it. Amazon has decided to move in the Australian grocery market
to strive with Woolworths and Coles. The Amazon is trying to take over the market by reducing
price of the product lower than the Woolworths and other grocery chains. Due to this,
Woolworth is facing low market share. The objective of the paper is to build strategy for
Woolworth on how to prepare itself and compete with Amazon. There are many internal and
external issues mentioned about the Woolworths. The two chosen issues for improving the
operation of Woolworths in the market are not so user friendly websites and inefficient staffs.
The assignment aims at developing innovative solutions for Woolworths, so that it can cope up
with the issues.
Discussion
Synopsis of the company
Woolworth is an Australian built supermarket chain and also owns grocery stores which
is owned by Woolworth’s group. It was founded in 1924. Its product portfolio includes grocery,
bakery products, vegetables, home furnishing, cosmetics, baby care, kids wear, toiletries,

3AMAZON VERSUS WOOLWORTHS
confectionery, footwear and many more. It holds around 80% of market share in the FMCG
market but after the entry of Amazon it has fallen drastically (Gunjal, 2017).
The Woolworth is facing severe problem due to price war in the market. As its
competitor, Amazon is offering the products at almost half price than Woolworth. The
organisation was facing problem due to Coles, another supermarket chain in Australia. But its
problem has increased after the access of Amazon in the Australian market (Paull and Hennig,
2018). Woolworth is dealing with many internal and external problems that is making its growth
decline in front of Amazon. Some of the issues are:
Shareholder of Woolworths are worried about the falling market shares of the company
due to the rise of Amazon in the market. The company also has poor online customer service
because the company always has unhappy customers. Woolworths is also showing poor
performance online especially in the interacting with the customers and failing to turn them to
potential customers. The staffs of the organisation is not well trained to assist the business
online. As a result, this acted as an opportunity for its competitors like Amazon to take over the
digital business. The prices offered by the company is much higher than Amazon and
Woolworths is not being able to compete with the prices offered by Amazon. However,
Woolworths’s distribution channel is stronger than Amazon but it still cannot compete with the
giant. Due to the popularity of Amazon, the suppliers in Australia offers better products and at
reasonable prices than they offer it to Woolworths. Though the company holds 80% market share
but it has drastically declined along with its reputation in the market (Cameron et al., 2017). The
brand status of Amazon in the Australian marketplace is increasing day by day. The Woolworths
has to make strong move and build strategies that can help the company gain back its lost image
in the market.

4AMAZON VERSUS WOOLWORTHS
Key issues of Woolworths that needs to be resolved
Website not so friendly
The world is going digital today. Almost all the businesses prefer to conduct their
businesses online so that they can acquire more number of customers. This is the area where
Amazon has benchmarked its position and has acquired a name in the world. Woolworths offers
poor customer service to the customers online. The customers find it difficult to navigate to the
website of the company. The company needs to improve its digital business because this is the
platform that offers a wide range of benefits like brand reputation, huge customer data base,
happy customers, free advertisement and many more. Amazon not only deals in retail business
through online, it also has certain other business as well which made Amazon a giant in the
digital business. There are numerous services offered by Amazon like Amazon Prime, retail
goods, electronics, Amazon video, groceries, Amazon business, Amazon drive and more. But
Woolworths only offer products like grocery, cosmetics, baby products, food savers and more
(Yang, 2018).
The Woolworths should innovate more product by opting for product diversification
technique. It should change its website features and online operations by luring the customers in
many ways. Woolworths should offer free samples online to the customers, more discounts and
offers at the time of festive season, discounted coupons, an active 24*7 customer service to look
into the customer’s grievances, lower price as compared to its competitors, improving the search
engine optimisation, taking the negative reviews positively and work on it, increase its
advertising activities to promote its brand. The company should start referral scheme as well. If
the customers refers the website of the company to someone then the company should offer perk
in form of either discount or free product. This will lure the customers and they will start

5AMAZON VERSUS WOOLWORTHS
referring it to one another. This will also strengthen the customer base. The Woolworths also has
reward program that offer to earn points on spending per $1. This should be increased a bit
which can be redeemed by the customer. Amazon also has its e-book session which supermarket
cannot compete with this strategy. To compete successfully with Amazon, Woolworths can try to
attempt to launch its e-book.
There are two leverages that Woolworths have, a strong customer base in supermarkets
and brick and mortar business all over Australia (Mudditt, 2018). If the company runs well e-
commerce through all its stores than Woolworth will be well placed to compete with Amazon.
The company can enhance its brick and mortar strategy by offering more customised products
like Amazon. Because this is the area where Amazon is weak.
Insufficient trained staff
Amazon has been successful in expanding its business online only because of its strong
hold over the digital operations and well trained personnel working for it. Woolworth lacks in
this area. To be a giant in the online business, the company should appoint those employees who
are well experienced in online tools and techniques. Due to its efficiency of workers, the
payments by the suppliers are also extended. To increase the productivity of the online business,
Woolworth should provide the right software and provide right training to the employees.
Trained employees are not only beneficial for the online business but for the virtual business
well. The employees should be well trained to pick orders online by the customers and get it
delivered at the time (Boccalatte, 2019).
The Woolworths can make use of tracking apps that track the time and productivity of the
employees. The tracking apps helps in assigning tasks to the employees, so that they are aware

6AMAZON VERSUS WOOLWORTHS
that what tasks are to be performed by them. The tracking systems have URL tacking system that
gives closer look at the performance of the employees. This way the company will be able to
know the productivity of its members and also know which employee is more productive and
which one are less. This way Woolworths can identify its weak area and can cope up with it by
providing proper training to the weaker section. Woolworths has its major operation through
brick and mortar business which means it has many stores across Australia. Use of
communication tools like Hangouts, Twist, Slack and more will help the administration keep an
eye on the operations in different stores and remote areas. This will enhance communication and
increase the workflow of the team.
The employees should be flexible enough to the changes in the market. Woolworths
should hire some experienced employees to look after the pricing strategy of the business, being
a leader in supermarket chain still Woolworths is facing with low market share as compared to
Amazon, why?
The answer is Amazon implements its own training programme for its personnel
development. To create a strong employee base, Woolworths has to invest a good amount in
providing training to its employees. Amazon uses price strategy method and evaluates the prices
offered by its competitors. This helps in selling the products and services at more competitive
prices and also these affordable rates helps Amazon in targeting the customers (Ryoo, Jeon and
Lee, 2016). For dealing with day to day transactions and keeping an eye on the rates due to
market fluctuations, Woolworths should have employees who are well versed in accounting as
well. The major plus point of Amazon is its ability to make sufficient use of artificial
intelligence. Therefore, Woolworths should create a strong information technology team to look
after the operations of its online business.

7AMAZON VERSUS WOOLWORTHS
Timeline for the new strategy
Operations to be
conducted
Month
1
Month
2
Month
3
Month
4
Month
5
Month
6
Month
7
Month
8
Costs
Associated
Launch of new
website
$150,0000
Artificial
intelligence
$50,000
Aggressive
marketing
$80,000
Increase
assortments
$100,000
Innovative
packaging
$40,000
Hire of third party
vendors
$50,000
Training and
development
$70,000
Customer support
service(24*7)
$70,000

8AMAZON VERSUS WOOLWORTHS
Feedback
The solution should be implemented by the business development team along with the
assistance of the human resource department. The business development team plays a crucial
role in enhancing the business of the organisation. The business development team will adopt all
the hooks and crooks in promoting the business online as well as offline. Because if Woolworths
will hire any marketing agency to market its product and services it will add extra cost to the
business. The business development department should be well versed with all the marketing
tools that would be needed for implementing the solution. The development team should
properly investigate the competitor’s prices, strategies and every step they take. The business
development also has to keep updated with the customer’s buying needs and patterns as well as
trends. Business development professionals should be aware of the strategies that can make them
gain trust and loyalty of the customers. Business development should hire new vendor and
enhance the distribution channel.
Aggressive marketing will help the department in getting in touch with potential
customers on personalised basis vigorously following their commitment with Woolworths
(Grimmer, 2017). Since, the company has to launch a new website that should be easy navigable
by the customers and more user friendly that the existing one. The business development
department should make sure that the customers receive 24*7 service regarding ordering of
product and services as well as handling the grievances of the customers.
For implementation of all the strategies in Woolworths, human resource management
also has a major role to play. The human resource department should make sure that the newly

9AMAZON VERSUS WOOLWORTHS
hired as well as the existing employees get the proper benefit of the training program initiated by
the company. The human resource management should develop interventions for training the
employees and helping them in gaining proper skills needed for the job. Human resource
department of any company plays a crucial role in enhancing the culture of the company.
Therefore, the human resource department at Woolworths should aim at developing the
personnel management so they are capable enough to compete with their rivals.
Conclusion
From the above discussion it concludes that however Amazon is a giant in the digital
business but innovating proper strategies can prove beneficial for Woolworths to compete
against it in the market. Being active in the supermarket, Woolworths is still behind Amazon.
Woolworths should utilise its strengths of brick and mortar as well as enhancing its digital
business to gain its loss reputation back in the Australian market. The weakness of Amazon is
it’s easily to imitate business plan. So, Woolworths should also should try to go beyond its
boundaries to compete with its major competitor. Woolworths should make its virtual as well as
digital presence in the mind of customers. this strategy will make the business flourish more.

10AMAZON VERSUS WOOLWORTHS
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