Comparative Analysis: Competitive Strategies of Nestle and Woolworths

This report provides a comprehensive analysis of the competitive strategies employed by Nestle and Woolworths. It examines Nestle's approach to brand expansion, acquisitions, and its focus on meeting consumer needs through various product offerings, including coffee, dairy products, and other food items. The report also explores Nestle's business model innovation, highlighting its strategies for adapting to market demands and maintaining consumer relationships. Similarly, the report analyzes Woolworths' strategies, focusing on promotions, product introductions, and its efforts to differentiate itself from competitors such as Coles and Aldi. It also delves into Woolworths' business model innovations, including the introduction of the Woolworths App for online shopping, the use of trading cards to boost sales, and the introduction of smaller Woolworths stores through leases. The report provides a detailed comparison of both companies' approaches to strategy and business model innovation, highlighting their efforts to gain and retain consumers in a competitive market.

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Nestle Company
Nestle is one of the largest distributors of instant coffee not only in Australia but to the rest of the
world. The company nowadays is identified as a global distributor of dairy products, foods and
drinks including chocolate, frozen meals, noodles, ice creams and hot drinks. Nestle in Australia
has thrived primarily due to the ability of the company to identify the cultural implications of
expanding to the culturally diverse Oceania region. Piela, (2012) suggests that Nestle employs up
to 5000 people, owns 5 distribution centers and 12 factories in the region. The main reason
behind the growth of Nestle has been behind its acquisitions which have led to a large range of
products that are able to beat competition through provision of variety that may be reinforced
through quality of product.
Strategy
One may explain strategy as the ability to consolidate different tasks and aims into a single
viable plan that is to be pursued by the company. Ghemawat, (2007)explains that strategy
involves planning for growth and increased sales such that the company is able to identify
challenges beforehand and set up solutions that keep the company maneuvering them with much
ease when they emerge. For Nestle, the main goal for strategy has involved brand expansion.
Primarily, the company seeks to improve the reputation of its various brands to its consumers.
According to Rezaeegiglo et al., (2014), the main aspects of strategy for Nestle involve branding,
communications and consumer needs. The company thrives on its ability to manage its brands
and expand their popularity and recall among the consumer. With a large range of products, the
company has to ensure that it has an idea what the consumer wants without necessarily waiting
for a demand to emerge but by evoking the consumer interests within an unoccupied market

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opportunity. The sales team is responsible for the company’s current strategy and is involved in
various tasks such as consumer management, consumer interactions in chain stores, marketing
and sales activities.
Business Model Innovation
Business model innovation involves the ability to manipulate business operations and
relationships to cater for market demands such as increased competition and consumer
preferences. Lindgardt et al., (2009) explains that business model innovation involves changes in
supply chains, distribution, and consumer and partner relationships for the greater good of
improved profitability and brand improvements. Nestle’s business model innovation has
involved acquisitions that have been geared towards fulfilling market demands in a manner that
competitors are not able to match. The main aspect of business model innovation for Nestle is
ensuring that while it addresses the consumer demands, the consumer relationship through its
products leads to a win-win situation (Walters & Rainbird, 2004). The main challenge for the
company is to ensure that it provides nutritional value while at the same time work within the
constraints of production costs and requirements. However, the company has been able to grow
some of its brands such as Nescafe and Nespresso.
Woolworths Group
Woolworths is one of the largest chain stores in Australia. The company began in the early 20th
century as a story in Sydney and has grown to become a global retail store chain where shoppers

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are able to find value for their money through cheap options for items. According to Arli et al.,
(2013) Woolworths stores own up to 992 outlets across the country and employees up to 115,000
individuals to its enterprise. The growth of Woolworths in the country is commendable since the
company began as a single store and has grown in its range of products. the enterprise sets itself
apart from other chain stores not only by its range of products but also due to its ability to source
products cheaply and thereby deliver value to its consumer at a lower cost. With the emergence
of the internet and ecommerce, Woolworths has also found an opportunity in online shopping
through the Woolworth App that allows its consumers to shop from any place using mobile
devices.
Strategy
Strategy involves setting up various resources such that the company is able to maneuver
challenges within the business environment. According to Ghemawat, (2007) strategy involves
establishing various capabilities of the organization to derive value through increased sales or
liquidity of the company. Strategy is therefore a main functionality for any company seeking to
grow in a competitive market. for Woolworths, strategy has involved introducing products and
promotions that enable the company to appeal to the consumer more than the competitor. In a
competitive market such as the Australian chain store market, Woolworths may be described to
be winning over its competitors such as Coles through the establishment of promotions that
entice the consumer to shop more at the store than in other supermarkets. First, Woolworth has
introduced the Aussie trading cards which have set it apart. Arli et al., (2013) reports that the
cards are responsible for the surge in sales by about 1.8 billion. Apart from focusing on the cards,
the company also relies on other promotional ventures such as discounts on petroleum and
advertisement to gain and retain consumers.

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Business Model Innovation
Business model innovation involves the ability of the company operations to engineer change in
its relations with the consumer and partners such as it delivers value and alleviates market
challenges. Some of the primary aspects of business model innovation for Woolworths Australia
has been to differentiate itself from its consumers in terms of its operations. Aspects of business
model innovation have emerged after the threat of new entrants such as Aldi that have created a
competitive environment for Australia Arli et al., (2013). The companies have affected
Woolworth’s sales prompting the company to change its approach to the market and its internal
structures. One of the innovative changes in the business model is that the company attempts to
recapture its lost market in the foods and grocery business by introducing leases for smaller
Woolworth stores across Australia and in other countries as well (Mortimer, 2001). In this, the
company is able to sell grocery and food products under its own brand as a means of countering
competitors. However, the company ensures that the leased stores deliver profitable turnover
before acquiring them.

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