Business Strategy Analysis: Woolworths Competitive Strategy Report

This report delves into the realm of strategic development, emphasizing its critical role in business success. It explores the application of various strategic models, including PESTLE Analysis, SWOT Analysis, and Porter's Generic Strategies, to analyze a business's environment and formulate effective strategies. The report uses Woolworths, an Australian supermarket chain, as a practical example to illustrate these concepts. It examines how Woolworths utilizes these tools to assess its political, economic, social, technological, environmental, and legal factors (PESTLE), as well as its strengths, weaknesses, opportunities, and threats (SWOT). Furthermore, the report analyzes how Woolworths can leverage Porter's Generic Strategies, such as cost leadership, diversification, and focus strategies, to gain a competitive advantage. The conclusion emphasizes the importance of these strategic development models for organizations to achieve and maintain a competitive position in the market, ultimately driving future success.

Competitive strategy

Competitive Strategy 1
Strategic development is a fundamental to creating and running a business. Strategic
management is the procedure of analyzing, evaluating and implementing the environment of the
business (Rothaermel, 2015). It is required for the organization to implement the strategies at the
workplace to achieve the goals. It is important for the company to analyze the business
environment before implementing the strategies at the workplace to attain the strategic goals.
The numerous strategic tools are used by the businesses to analyze the environment of market
such as PESTLE Analysis, VRIO Framework, Porter’s generic strategy and the others. In this
paper, the discussion is made on the topic of strategic development model (Ansoff, Kipley,
Lewis, Helm-Stevens, and Ansoff, 2018). In the discussion, the uses and importance of these
models will be analyzed with the help of practical example of business. For the analysis,
Woolworths has been taken into consideration to analyze the business environment. Woolworths
is a supermarket of Australia which delivers the services of store chain. The company operates
the business with the 100 stores across Australia. It is observed that the organization has 976
supermarkets with the 19 convenience stores that carrying the same logo. The businesses operate
the online business with the name “Home Shop” (Woolsworth, 2018a).
There are strategic development tools that are used by the business to analyze the business
environment such as VRIO Framework, PESTLE Analysis, SWOT Analysis and the others. In
this paper, PESTLE Analysis, SWOT Analysis and Porter’s Generic Strategies are used to
analyze the business environment of Woolworths.
PESTLE Analysis is a tool that is used to analyze or monitor the macro-environmental factors
that impact the performance of an organization. It is essential for the business to analyze the
environment of the new market so that it can enter the new market (Dobbs, 2014). This tool

Competitive Strategy 2
helps to analyze the environment in the context of political, social, legal and the others. PESTLE
is stands for Political, economic, social, technological, environmental and legal factors.
(Source: B2U, 2019)
Political-The policies developed by the government of Australia influence the retail companies
for expansion of business at the worldwide level such as Federal Government of Australia
introduce the competition policy for high competition. The retail companies has high political
pressure due to which the chances of faces the risk is high.
Economic-It has been found that the market of Australia is declined in economic terms due to
which the willing power of consumers is affected.
Social-Woolworths build strong relation with their suppliers as they provide many services to
consumers. It has been seen that the people of Australia use the smartphones in their free times
even in matters of shopping. But it is observed that the company has less presence in the online
market due to which it faces the issues.
Technological- Australia is the developing country in terms of advance technology. Woolworths
also use the green refrigerator in order to protect the environment. The use of advance
technology also improves the quality of product (Nandonde, 2019).The company used the SAP
technology in order to maintain the inventory record so that the risk of fraud is reduces.

Competitive Strategy 3
Legal-The government of Australia introduces the various laws so that the risk is reduces for
customer and organization. Australia competition or consumer commission is the acts which are
implement by the company to reduce the risk or frauds.
Environmental- There are many laws are introduced by the government of Australia related to
environment. It is also compulsory for the company to implement the environment laws to
survive in the market (Lasserre, 2017). The use of green refrigerator helps to protect the
environment. The company also invests the huge amount in energy efficiency and carbon
initiative to guard the environment.
SWOT Analysis is a tool that is used by the company to examine the business environment of
the company. This model is used to study the internal environment of the organization. It stands
for strength, weaknesses, opportunity and threat. It can be said that this model is a useful
technique to understand the strength and weakness to identify the opportunities for the
organization. Analyzing the opportunity helps the organization to grab it for the future success.
These factors helps to analyze the internal environment that is necessary to grow in the market as
these can be used to implement the strategies (Mind Tools, 2018).
Strength - The Company has strong brand image in the market. It also has high percentage of
share in the market with the percentage of 34% in terms of grocery market (Woolsworth, 2018b).
Weaknesses- Woolworths has less presence in online market. Price competition is also a
weakness for the company

Competitive Strategy 4
Opportunity- Woolworths has the opportunity to expand the business at the global level.The
company also has the opportunity to enter the online market with the help of social media. The
company can also merge with the other company to enter the new market.
Threat- The Company also has the high threat of new entrants as they required the less capital.
The threat of competition is high. It also has high threat of price war.
Porter’s Generic Strategies is also a strategic model that is developed to gain the competitive
advantage in the market. It is describe by the Michael Porters in the year 1980. It describes the
strategies from which the organization can gain advantage of competition. The strategic tool
contains the three strategies such as diversification strategy, cost leadership strategy, and focus
strategy. These strategies develop the organization unique from the other companies that
supports to attain the competitive advantage (Madsen, and Walker, 2015). These strategies can
implement as per the current strategies of the organization. These three strategies are discussed
below:
Cost Leadership Strategy- Cost leadership strategy of the company defines that the business
provides the services/product at low prices to consumers as compare to its competitors. The
company has to reduce to cost of production to offer the low prices to consumers. It helps to
attract the customers towards the services of the company. It has been found that Woolworths
deliver the services/products in low cost with the motive to beat the competitors. The company
can gain the advantage by attracting the consumers towards its services (Woolsworth, 2018c).
Diversification Strategy- Diversification strategy refers that the company provide the diversify
services to consumers that is unique from the competitors product in the market. It is also useful
for the business to gain the competitive advantage by offering the unique services/product to

Competitive Strategy 5
consumers as compare to its competitors. The service provided by Woolworths is similar with
the other companies due to which they face the issue of price of war. It is observed that the
company has to provide the unique services to consumers so that the huge number of buyers
attract towards its business.
Focus Strategy- Focus Strategy refers that the company has to focus of its products or services
so that they provide the quality or quantity of product/services to consumers and gain the
competitive advantage. It is the combination of cost leadership strategy and diversification
strategy as they both are also used to recover the quality of product. The services provided by the
company to consumers with high quality affects the demand of the product in the market.
According to analysis, it has been seen that the Woolworths delivers the quality or quantity of
services to consumers but it has to focus on attractiveness of product. The company has to
deliver the product or service with the attractive package according to all age of consumers.
At the end of the paper it is concluded that the strategic development models are useful for the
organizations. However, there are many models that can be used by the company to analyze the
internal and external environment but in this paper PESTLE Analysis, SWOT Analysis and
Porter’s Generic Strategies are discussed. It is required for the organization to use these models
that help to develop the strategies that helps to gain the competitive advantage. Woolworths has
been taken as example for analyzing the environment by using the strategic tools so that it
develops the strategies. The company can also implement the generic strategies at the workplace
so that it can achieve the competitive position in the market. The company can attain the higher
level of success in the near future by using these models.

Competitive Strategy 6
References
Ansoff, H. I., Kipley, D., Lewis, A. O., Helm-Stevens, R., and Ansoff, R. (2018) Implanting
strategic management. Springer.
B2U. (2019) Scanning the Environment: PESTEL Analysis. [online] Available from:
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11/04/19].
Dobbs, M. E. (2014) Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), pp.32-45.
Lasserre, P. (2017) Global strategic management. Macmillan International Higher
Education.
Madsen, T. L., and Walker, G. (2015) Modern competitive strategy. McGraw Hill.
Mind Tools. (2018) SWOT Analysis. [online] Available from:
https://www.mindtools.com/pages/article/newTMC_05.htm [Accessed 11/04/19].
Nandonde, F. A. (2019) A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence, 38(4), 54-61.
Rothaermel, F.T. (2015) Strategic management. McGraw-Hill Education,.
Woolsworth. (2018a) About us. [online] Available from:
https://www.woolworthsgroup.com.au/page/about-us [Accessed 29/07/19]
Woolworths Group. (2018b) Woolworths Supermarkets. [online] Available from:
https://www.woolworthsgroup.com.au/page/about-us/our-brands/supermarkets/Woolworths
[Accessed 29/07/19].

Competitive Strategy 7
Woolworths Group. (2018c). Strategy and objectives. [online] Available from:
https://www.woolworthsgroup.com.au/page/about-us/our-approach/strategy-and-objectives
[Accessed 29/07/19].