Competitive Strategy Analysis of Woolworths Using Key Tools

This assignment provides a comprehensive analysis of Woolworths' competitive strategy, utilizing key strategic tools to assess its market position and performance. The essay delves into the application of PESTLE analysis to understand the macro-environmental factors influencing the company, including political, economic, social, technological, legal, and environmental aspects. It then examines Woolworths through the lens of Porter's Five Forces model, evaluating the bargaining power of buyers, suppliers, threats of new entrants and substitutions, and rivalry among existing competitors. Furthermore, the assignment employs a SWOT analysis to identify Woolworths' strengths, weaknesses, opportunities, and threats, providing a holistic view of its internal capabilities and external environment. The analysis highlights how these strategic tools help Woolworths to gain a competitive advantage and navigate the challenges within the Australian retail industry. The assignment concludes with a summary of how these tools are crucial for evaluating and monitoring factors affecting Woolworths' business, thereby enabling the development of effective strategic plans.

Running head: Marketing Tools
Competitive Strategy
Name of the Student:
Name of the University:
Author’s Note

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Introduction
The current assignment focuses on competitive strategies implemented by the business in
order to achieve competitive advantage from its competitors. The assignment provides a
comprehensive description on various competitive tools; predominantly the paper focuses on
Porter’s Five Force model, SWOT analysis and PESTLE. In order to briefly understand about the
competitive strategic tools, the study analyzes the competitive strategy of Woolworths, a retail
industry in Australia. The competitive tools help the industry to get a clear vision where the
company stands in the market. The industries with strategic plan can know their strength,
weakness and opportunities that cam be obtained within the market. The possible threats and
challenges faced by the company and their possible competitors as well.
Discussion
The selected company for the assignment is Woolworths, an Australian retail industry.
Throughout the assignment, the Woolworths is analyzed briefly in order to seek how Woolworth
gained competitive advantage, due to analysis of the company the future can be estimated. The
first tool to be implemented is PESTLE analysis.
PESTLE Analysis
The PESTLE analysis is a strategic tool which helps the industry to identify the macro-
environmental factors which can affects the productivity of the company. PESTLE includes
political, economic, social, technological, and legal and environment.

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Political Factor
The political factor has a great influence on the performance of the company. There are
certain obligation, rules and laws which must be followed by the company so as to run the
company smoothly and sustain in the market. Since, Woolworths is an Australian company, each
state in Australia mandates that they must adhere to Food Standards Code ((Rastogi and Trivedi
2016). This approach confirms that the packaged food must have all the nutritional information
and contents. This policy is obliged to all the super market industry in Australia to display in
their dietary information. On the other hand there are some political disturbances that discourage
the investors from entering inside the market. Since, Woolworths is an established company the
risk towards this factor is significantly less.
Economic Factor
The economic factors such as economic slowdown, inflation rate, recession, unemployment
are such factors which could affect the financial position of the company. The company’s
financial levels are influenced by these economic factors. It is evident that the economic
slowdown has drastically has led to decrease of the disposable income in Australia households,
thus decreasing their purchasing power (Rastogi and Trivedi 2016). Due to rise in living cost has
also diminished the purchase power of the customers and therefore, they are more inclined
towards low cost products. Therefore, it does impact the price of the products.
Social Factors
The significant and dynamic changes in the attitude, societal lifestyle influence the
purchasing behavior of the consumers. Nowadays, people are more concerned about health and
organic foods and thus controlling obesity. Therefore, there is a high demand of organic food in

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Australia; it is a good opportunity for the Woolworths to expand its organic food sector. The
social factor also includes the suppliers as well, at the current phase Woolworths is facing lethal
relationship with their suppliers and thus there is a drastic change in the business.
Technological Factor
The technological advances have initiated creativity and innovation in the business world.
According to the technological advancements in Australia market, the company has introduced
many innovations such as SAPs in order to carry out new creativity and support the organization
for better productivity.
Legal Factor
The legal factor focuses on the employee management regulation and taxation policies that
enable the company to set legal frameworks for their organization (Rastogi and Trivedi, 2016).
The food licensing regulations and other industry law are important for the organization to
maintain ethical business environment in the organization. Since, Woolworths is already and
established company therefore, the management is concerned with all the legal regulations and
further implementation of strict codes by NFF, is recommended for the company.
Environmental Factor
It is mandatory for all the industries to follow the approach of CSR, corporate social
responsibility; it states that all the companies must use environment friendly practices in their
business (Rastogi and Trivedi 2016). Woolworths has been focusing on this factor by investing
its resources and business in minimizing the use of carbon footprints in the business and on
selling organic products to the consumers and also focuses on minimizing the wastage of water.

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Porter’s Five Force Model
The Porter’s Five Force Model is an approach which is utilized by the companies so as to
examine and evaluate the current situation and the performance of the company by obtaining
competitive advantage (Meyer and Cohen 2018).. The Porter’s Five Force Model focuses on
these particular areas:
Bargaining Power of the Buyers
It is evident that Australian’s are focusing more on having healthy and organic food due to
increasing obesity and trend of health conscious living, the competition has been observed
between many foods many industries (Meyer and Cohen 2018).. Therefore, new products with
varieties, choices and innovative and creativity are being provided to the consumers, thus this has
emerged strong bargaining power of the buyers. Hence there is a need for decreasing the price of
the products and initiating new products as well in order to attain the attention of the customers
and gain over competitors.
Negotiating Power of Suppliers
It is known that suppliers are the most important factor in a business; it depends on the suppliers
the increase and decrease of the margin level of the company. There is competition for suppliers
in food industry, by Woolworths being the old player has maintained numerous suppliers from
the market
Threats of the New Entrants

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There is a rapid growth observed in food and grocery industry ion all the regions, thus the
threat of a new entrant is quite common and for a company like Woolworths the threat is
moderate (Meyer and Cohen 2018). There is a risk for new entrant in the industry as there are
existing, and dominant players in the market such as Coles and Woolworths. Both the companies
are highly established in the market and in a profitable state covering among 80% of consumers
of Australia (Rastogi and Trivedi 2016). Therefore, the risk of new entrant is quite less, but it is
uncertain in business as even the new entrant can come up with new strategy and take over the
industry. Thus, it is better for the companies to be strategically ready and tackle the upcoming
challenges in the industry.
Threats of Substitutions
The threat of substitution is high in the market refers to the business with same offering and
products. The intensity of substitution is leveraging in retail industry and with no doubt it will
keep on increasing significantly. Woolworths has been in significant competition from its
competitors such as Coles and 7- eleven (Massa Lüdeke-Freund and Bocken 2016). On the other
hand the farmer market is also a good competition for Woolworths as they provide pure organic
products in low price because of leveraging trend of healthy living.
Rivalry among the existing companies
It is evident that there has been significant increase in number of businesses which are
operating in this particular sector. Woolworths also has tight competition with its rivalries,
Woolworths is dealing with the situation by maintaining proper economies of scale and alos by
indulging in maintainable differentiation.
SWOT Analysis

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The SWOT analysis is a tool which enables the business to undergo internal analysis like
strength and weakness and external analysis like opportunity and threats. This framework
identifies and understands the key issues affecting the business (Woolworths SWOT Analysis,
2019). There are limitation and benefits of the SWOT analysis.
Strength
The strength factor identifies the key parameter that aids the industry to maintain its
position in the market. Woolworths is highly reputed and covers most part of the industry. It also
possesses huge number of customers. It has highly skilled force and it has superb strong network
in the industry and good performance in the market. The company is good at executing new
projects and program and generate good returns as well.
Weakness
Weaknesses are the factors where the company must focus on overcome those weaknesses
for example: Woolworths is unable to support its higher growth. Due to limited geographic share
it is unable to expand. The competitive advantage evolving from cost-based rather than
differentiation based factors.

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Opportunities
The opportunities leads the company for further future prospects for example: opening of
new stores in new geographical area enables company growth. Through franchise models the
company can demand growth. The new policies can put significant impact on the business and
may increase their profit and revenue. New online channel may attract many customers. Due to
lower shipping prices, three is decrease in the cost of transportation of goods and raw materials.
Threats
Threats are the factors where the company must need to put more focus and implement
strategies to overcome its obstacles. For example: the high intensity of competition in the
industry puts a great impact on the productivity of Woolworths. The factors like recession and
market policies may hinder and the affect the growth of the company.
Conclusion
It can be deferred from the above analysis that the companies need competitive strategic
tools to know its position. In the following paper Woolworths apply all the strategies in order to
get competitive advantage and get over the whole industry. The applied strategic tools like
PESTLE, Porter’s Five Force Model and SWOT analysis helps Woolworths to evaluate and
monitor its internal and external factors affecting its business so that accordingly strategic plan
can be implemented in the business.

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Reference and Bibliography
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Woolworths SWOT Analysis (2019)| Competitors & USP | BrandGuide | MBA Skool-
Study.Learn.Share.. [online] MBA Skool-Study.Learn.Share. Available at:
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Aug. 2019].