BIZ202 Assessment: Micro Environmental Factors Impact on Woolworths

This report provides an in-depth analysis of the micro-environmental factors impacting Woolworths, a major Australian supermarket chain. It identifies key factors such as suppliers, customers, competitors, and market intermediaries, examining their influence on the company's operations, performance, and growth. The analysis explores Woolworths' strategies for managing relationships with suppliers, focusing on partnerships and commitments to quality and freshness. It also examines the company's customer-centric approach, including its customer loyalty programs and feedback mechanisms. The report further assesses the impact of these micro-environmental factors on Woolworths' business performance, structure, profitability, and market share. Finally, it proposes solutions to address challenges and mitigate potential risks, emphasizing the importance of adapting to changing market conditions and customer preferences. The report highlights the significance of maintaining strong relationships with suppliers, distributors, and customers to ensure long-term success and resilience in the face of market competition.

The Business Environment

Executive Summary
In the below assignment, there is a description of Micro environmental factors of Woolworths
that directly create an impact on the operations as well as the growth of the organization.
There are many factors like suppliers and customers that play a very important role in the
organization. Woolworths has to create framework by which it can be able to face market
competition and challenges in the market. Such factors also impact the growth and profitability
of the organization.

Contents
 Identify micro environmental factors that influence the chosen business specifically. These factors
may include but are not limited to consumer behaviour, competitor analysis, social, suppliers,
intermediaries, new entrants and public opinion........................................................................................4
 Analyse their impact on the business that may be in terms of but not limited to changes in business
performance, structure, policies, profitability, value-adding attributes, growth and market share............6
 Propose solutions to challenges to counter prevailing/potential risks................................................6
References...................................................................................................................................................7

 Identify micro environmental factors that influence the chosen
business specifically. These factors may include but are not
limited to consumer behaviour, competitor analysis, social,
suppliers, intermediaries, new entrants and public opinion.
Woolworth is one of the biggest supermarket chains in Australia. It has around 995 stores in
Australia. Woolworth’s strategy is altogether different from brand to brand but for most of the
brand it has the common one, to maximize the shareholder value and building high growth in
the business. Internal Environment plays a very important role in the operations of Woolworths
and is known as a part of micro environment. There are forces that compose Micro
environment and these are suppliers, customers, competitors intermediaries and other market
areas where an organization sells the products and services. It also includes the different types
of stakeholders like media and government (Turner, 2016).
In the case of Woolworths and their relationship with the suppliers, this organization has a
strong commitment towards the relation with the suppliers. Woolworth has a partnership with
the suppliers so that they can have a long term as well as committed relationship with each
other (Tidström, 2012). This kind of partnership is very beneficial for the suppliers and
Woolworths. So, as per this partnership, there is an introduction of speak up service where
trade partners have the authority to report all the frauds, corruption, secret commissions,
breach of law and people or product safety risks. This results in the value delivery of the terms
of services and products to the customers. They have a relationship with the other marketing
channels as well like supply chain, logistics chain between customers and suppliers and resellers
and this has been driven by the values of the organization, Woolworths has a very strong tie up
with the leading farmers of Australia so that they can deliver fresh quality food, and this is the
goal of the organization. Woolworth directly get products from these farms that help in
ensuring that the food remains fresh (Fernando, 2011). Woolworth have strong commitments
that helps in adding to their success stories (Runhaar, Driessen & Uittenbroek, 2014).

Suppliers and market intermediaries are considered as a very important factor when it comes
to micro environmental factors. Because they create a direct impact on the business.
Woolworths always focus on providing fresh products to the customers and they have adopted
a practice of providing free products if they are not fresh. It clearly shows that they have belies
in these two factors that the way in which they have created a chain helps them in being
efficient in order to act upon them. They know that this can create a level of trust among the
customers and they can provide good products on time. They know that good relationship with
the suppliers is an advantage for business.
Customers are the most important part of an organization as because of them, a business can
run successfully. Woolworth is known for the methods and ways, they have adopted to fulfill
the needs of the customers as customer needs keep on changing and it is very important to
fulfill the same. They have a customer base of around 24 million for every week. They serve
their customers all over the world (Cholil, 2015). They need to do a lot of hard work to retain
this huge brand as well as to earn loyalty of the customers. They have a running program called
everyday reward program that is very popular loyalty program for the benefit of the customers.
The overall information collected by this loyalty program helps in understanding the thinking
and perception of the customers like which kind of product they need the most and where they
can place the same.
Woolworths always respond to the customers feedback and take it in a very serious manner.
They invest most of the time in research so that they can able to do in a better way for
satisfying the needs of the customers. All the feedbacks are taken into consideration and it is
considered as the main point for decision making. Woolworths has started a new thing
regarding customer focus groups all around the country where there is a Customer talkback.
The store team is responsible to take feedback directly from the customers and this helps in
making the stores best (Camillus, 2016).

 Analyse their impact on the business that may be in terms of
but not limited to changes in business performance, structure,
policies, profitability, value-adding attributes, growth and
market share.
All these micro factors create a high impact on the business like the performance, policies and
structure of the business. Profitability of the organization is also depending upon these factors.
These factors decide the growth rate of business and market share of the investors. Strong
customer base helps in increasing the profitability of the organization while lower customer
satisfaction may do the negative.
 Propose solutions to challenges to counter prevailing/potential
risks.
Customer plays a very important role in their business because they have changing taste and
preferences and Woolworths know customer’s taste and choices in a very well manner. They
study the behavior of the customers and other factors related to the environment and then
takes the decisions accordingly (CHOW, 2011). Surrounding environment matters a lot for
Woolworths and it focus on customer base as well as the environmental factors that can create
an impact on the business and the challenge is that it keeps changing. There are different types
of challenges like changing taste and preference of the customers, changes in supplier’s rate
For facing the challenges, they want to keep themselves prepared for changing business
situations and create strategies according to the same by analyzing the market situations.
Woolworths has to behave according to these factors so that they can be able to face the
market competition and increase in the customer’s notion and money.
Woolworth focus on the current market changes and the taste and preference of the customers
so that it becomes easy to provide the products and services to the environment. Customer is
the most important part of the business and if a business is unable to fulfill the needs of the

customers then it will grow in negative direction (Ferretti & Montibeller, 2017). Woolworth
prepares different strategies to cope up with the future emergencies and negative situations. It
always tries to provide the best quality product and services to the customers. Woolworth
believes in maintaining relationships with all the suppliers, distributors and customers so that in
difficult times, they will come forward and help the business organization. The organization has
a believe and faith on the relationships.
References
Camillus, J. (2016). The wicked challenge of the business environment. International Journal Of
Business Environment, 8(1), 19. doi: 10.1504/ijbe.2016.074792
Cholil, M. (2015). BOARD ROLE ON THE QUALITY OF THE SERVICE, CUSTOMERS’ SATISFACTION
AND CUSTOMERS’ LOYALTY IN RESTAURANT FIRMS: STORY FROM
INDONESIA. Corporate Board: Role, Duties And Composition, 11(3). doi:
10.22495/cbv11i3art1
CHOW, G. (2011). ECONOMIC ANALYSIS AND POLICIES FOR ENVIRONMENTAL PROBLEMS. Pacific
Economic Review, 16(3), 339-348. doi: 10.1111/j.1468-0106.2011.00551.x
Fernando, A. (2011). Business Environment. Pearson India.
Ferretti, V., & Montibeller, G. (2017). An Integrated Framework for Environmental Multi-Impact
Spatial Risk Analysis. Risk Analysis, 39(1), 257-273. doi: 10.1111/risa.12942
Runhaar, H., Driessen, P., & Uittenbroek, C. (2014). Towards a Systematic Framework for the
Analysis of Environmental Policy Integration. Environmental Policy And
Governance, 24(4), 233-246. doi: 10.1002/eet.1647
Tidström, A. (2012). Conflicts in business relationships in light of the external
environment. International Journal Of Business Environment, 5(2), 122. doi:
10.1504/ijbe.2012.046203

Turner, S. (2016). The Use of ‘Macro’ Legal Analysis in the Understanding and Development of
Global Environmental Governance. Transnational Environmental Law, 6(2), 237-257. doi:
10.1017/s2047102516000236