University Business Strategy Report: Woolworths Limited Analysis

This report provides a comprehensive analysis of Woolworths Limited's competitive strategy. It begins with an introduction to the company, followed by a situational analysis utilizing PESTLE and Porter's Five Forces frameworks to assess the political, economic, social, technological, legal, and environmental factors influencing the business, as well as the competitive forces at play. The report then examines the competitive rivalry Woolworths faces from industry competitors like Amazon and ALDI, and details the strategies the company employs, such as online services and discounted offers. Finally, it concludes with recommendations for Woolworths to enhance its market position and overall growth within the Australian retail sector. The analysis highlights the challenges and opportunities facing the company in a dynamic market environment.

Running head: COMPETITIVE STRATEGY
Competitive Strategy
Name of the Student:
Name of the University:
Author’s Note:

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Executive Summary
This report will discuss about the concept of business strategy in the light of the business
organization of Woolworths Limited. The report will give an introduction of the company
and will try to analyze the company through the lens of the frameworks of PESTLE analysis
and “Porter’s Five Forces”. The report will also discuss the rivalry faced by the concerned
organization and the various strategies used by the organization for its business purposes.
Finally, the report will conclude with some recommendations which the company can follow
to further enhance its prospects in the business market of Australia.

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Table of Contents
Introduction................................................................................................................................3
Woolworths Limited..................................................................................................................3
Situational Analysis...................................................................................................................5
PESTLE Analysis...................................................................................................................5
“Porter’s Five Forces”............................................................................................................7
“Threat from new entrants”................................................................................................7
“Threat from the rivals”.....................................................................................................7
“Bargaining power of the suppliers”..................................................................................7
“Bargaining power of the customers”................................................................................8
Industry Rivalry.................................................................................................................8
Competitive Rivalry...............................................................................................................8
Strategies....................................................................................................................................9
Recommendations......................................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................11

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Introduction
The “advent of globalization and the recent developments in the fields of technology
as well as the innovations has much transformed the way the various business organizations
transact their business in the recent times” (Wagner and Hollenbeck 2014). It is a reflection
of this that the level of competition faced by the various business organizations has increased
significantly in the recent times and thus the various business organizations take the help of
various innovative strategies to mitigate the level of competition faced by them in the
business world (Wagner and Hollenbeck 2014). These innovative strategies not only help the
various business organizations to mitigate the high level of competition faced by them within
the business world but also help them “to bring about the overall growth as well as the
development of their entire business process” (Hoejmose, Brammer and Millington 2013).
Therefore, it would be apt to say that it has become very important for the various business
organizations in the recent times to take the help of diverse kinds of innovative strategies to
stay ahead of their business competitors operational within the same field of business
(Hoejmose, Brammer and Millington 2013). This report will discuss about the competitive
strategies of the company “Woolworths Limited” while focusing on the situational analysis of
the concerned organization and the business strategies used by it to “bring about the overall
growth as well as the development of its business operations”.
Woolworths Limited
The company “Woolworths Limited”, founded by “Percy Christmas, Stanley
Chatterton, Cecil Scott Waine, George Creed and Ernest Williams” in 1924 is not only one of
the major retail business organizations of the nation of Australia but also of the world
(Woolworthsgroup.com.au. 2018). The business organization under consideration here
provides a range of retail services to the customers of the nation of Australia starting from

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groceries to electronic and other products as well as services. The company initially started as
a grocery store in the year 1924 however with the changing “needs as well as the
requirements of the customers” the company under consideration here has much widened the
range of products as well s services offered by them to the customers from the different parts
of the nation (Woolworthsgroup.com.au. 2018). It is a reflection of the effective services
provided by the company under consideration here that it is the second largest business
organization in the nation of Australia in terms of the annual revenue generated by it
(Woolworthsgroup.com.au. 2018). As per another report, “Woolworths Group is the largest
takeaway liquor retailer in Australia, the largest hotel and gaming poker machine operator in
Australia and was the 19th largest retailer in the world in 2008” (Woolworthsgroup.com.au.
2018). Furthermore, the incorporation of the latest technology in the business process of the
organization has affected the prospects of the business organization in a positive manner and
it is a reflection of this particular fact that the annual sale of the company for the year 2017
was an impressive “$41.15 B” (Forbes.com. 2018). The below given figure provides the
financial details of the business organization under consideration here-
Figure 1: “Financial details of the company Woolworths Limited”
Source: “Factset, Bloomberg, S&P Cap IQ; Forbes”

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Situational Analysis
PESTLE Analysis
A PESTLE analysis of the business organization would reveal the following facts-
Political  The government of Australia is one of the largest democracies of the
world and therefore the nation enjoys a stable political climate which
is very congenial for trade and commerce.
 The government of the nation takes active initiatives for the growth
of trade and commerce.
Opportunity: The stable political climate of the nation actually acts as an
opportunity for the concerned business organization and the organization
can take the help of the stable political environment of the nation for its
business purposes (Armstrong et al. 2015).
Economic  The world at the present moment is still reeling from the adverse
effects of the economic recession which it faced a few years ago.
 This particular factor has adversely affected the buying pattern of the
customers and it is a reflection of this that the customers in the
present times have become more conscious about their shopping list.
Threat: This particular economic condition of the nation acts as threat to
the concerned business organization as it has indirectly affected the buying
behavior of the customers.
Social  The society of Australia is very liberal one and open to change.
 The people of the nation like to take the help of the recent
developments in the fields of technology.
Opportunity: The concerned business organization can take the help of this

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particular social condition of the nation to focus on the online services
provided to them by the customers (Armstrong et al. 2015).
Technological  Australia is a first world country and therefore it can be said that the
nation is a fairly developed one in terms of the technological
advancements.
 The government of the nation itself encourages the different business
organizations of the nation to take the help of the technological
advancements of the nation.
Opportunity: The technological advancement of the nation is likely to act
as an opportunity for the concerned business organization and the
organization can take the help of the technological advancements of the
nation to further the prospects of their business (Saeidi et al. 2015).
Legal  The business organization needs to take into consideration the
various legislations of the nation of Australia like the labor laws, the
tax laws, anti-discrimination laws and others for the purpose of the
conduct of their business in the nation of Australia.
Threat: The legislative factors actually act as a threat for the business
organization as it is often seen that the business of the concerned
organizations gets adversely affected on the score of these legislations
(Saeidi et al. 2015).
Environmental  The nation of Australia takes active initiatives for the conservation
of the environment and with this particular view has passed
regulations which the organization under consideration here needs to
follow.
Threat: The environmental factors actually act as a threat for the

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organization as it is often seen that if the organization goes on to follow all
the environmental legislation then its productivity gets hampered.
“Porter’s Five Forces”
An analysis of the business organization on “Porter’s Five Forces” would reveal the
following facts-
“Threat from new entrants”
The business organization under consideration here has been in business for more
than 90 years and is one of the most popular organizations in the nation of Australia (Barney
2012). Therefore, it can be said that the organization faces a very “low level of threat from
the new entrants entering into the business market”.
“Threat from the rivals”
The business organization under discussion here is one of the largest business
organizations of the nation in terms of the annual revenue which it earns. Furthermore, the
organization also holds the maximum amount of market share and it is a reflection of this that
the organization under consideration here faces a very “low level of threat from its rivals
operational in the same field of business” (Barney 2012).
“Bargaining power of the suppliers”
The business organization under consideration here takes the help of multiple supplier
systems in a bid to not only reduce the bargaining power of the various suppliers which are
related to it but also to ensure that the organization gets timely delivery of the products
offered by it to the customers (Bharadwaj et al. 2013). Therefore, it would be apt to say that
the “bargaining power of the suppliers related to the organization is very low”.

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“Bargaining power of the customers”
The business organization under consideration here provides a range of products as
well as discounted offers which are not provided by any other business organization in the
nation of Australia (Bharadwaj et al. 2013). Furthermore, the organization also provides
online or e-commerce services to the customers which is provided by very few business
organizations in the nation of Australia in the retail sector (Bharadwaj et al. 2013). Therefore,
it would be apt to say that the “bargaining power of the customers related to the concerned
business organization is very low”.
Industry Rivalry
It is true that the company “Woolworths Limited” is one of the largest business
organizations of the nation of Australia and holds the majority of the market shares related to
the retail sector in the nation. However, the company at the same faces a considerable amount
of rivalry from the various other business organizations operational within the same field of
business like Amazon, ALDI and others (Business Insider Australia. 2018). It is a reflection
of the high level of the competition faced by the organization that the average prices of the
shares related to the organization fell by 2.1% in the year 2017 (Business Insider Australia.
2018).
Competitive Rivalry
The business organization under consideration here has a number of competitors in
the nation of Australia operational in the same field of business and which more or less offers
the same kind of services to the customers (Urbancova 2013). For example, the company
Amazon Inc offers the same kind of services to the customers on a worldwide basis just like
the company Woolworths and has been much appreciated by the customers in the recent
times (Business Insider Australia. 2018). Furthermore, the organization also provides regular
sales as well as discounted offers to the customers and therefore it would be apt to say that in

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the recent times has emerged as one of the major competitors of the company Woolworths
(McGrath 2013). The business organization ALDI, on the other hand, follows the policy of
cost leadership to reach out to a larger number of people (Business Insider Australia. 2018).
Strategies
The various strategies used by the business organizations in the present times are the
tactics or the policies which they utilize “not only to out rival their key competitors
operational within the same field of business but also to bring about the overall growth as
well as the development of their business” (Hoejmose, Brammer and Millington 2013).
However, it is often seen that a “mistimed or misplaced strategy can instead of enhancing the
prospects of the business organization can hamper its prospects in the longer run” (Hoejmose,
Brammer and Millington 2013). The company Woolworths takes the help of various
strategies for their business process like the strategy of providing online or e-commerce
facilities to the customers, the offering of regular sales as well as discounted offers, offering
traditional business facilities for the conservative customers and others. It is significant to
note that these strategies have helped the business organization in a considerable manner and
has contributed much towards the development of the organization in the present times.
Recommendations
It is true that the business organization under consideration here is the second largest
business organization of the nation of Australia in terms of the revenue which it generates.
However, the organization can take the help of several new strategies to further the level of
their growth. Firstly, the organization can enhance its online presence in a much more
effective manner than it already has like the company of Amazon. Secondly, the organization
can further enhance its offline business which forms the core of its business activities.

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Thirdly, the organization can follow the lead the other companies like Amazon and others
and expand into the other nations of the world for its business purposes.
Conclusion
To conclude, the business world in the present times has undergone much
transformation in the present times and it is a reflection of this that the various business
organizations in the present times in addition to the traditional business model also take the
help of the e-commerce business model. Furthermore, the level of rivalry or competition
faced by the various business organizations in the present times has increased significantly in
the present times on the score of various factors and thus most of the business organizations
in the present times are increasingly taking the help of new innovative strategies for the
purposes of their business.

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References
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction.
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advantage: The relevance of resource‐based theory. Journal of supply chain
management, 48(2), pp.3-6.
Barney, J.B., 2014. Gaining and sustaining competitive advantage. Pearson higher ed.
Bharadwaj, A., El Sawy, O., Pavlou, P. and Venkatraman, N., 2013. Digital business
strategy: toward a next generation of insights.
Business Insider Australia. 2018. Hot competition is back in Australian supermarkets.
[online] Available at: https://www.businessinsider.com.au/hot-competition-is-back-in-
australian-supermarkets-2017-10 [Accessed 6 May 2018].
Forbes.com. 2018. Forbes Welcome. [online] Available at:
https://www.forbes.com/companies/woolworths/ [Accessed 6 May 2018].
Hoejmose, S., Brammer, S. and Millington, A., 2013. An empirical examination of the
relationship between business strategy and socially responsible supply chain
management. International Journal of Operations & Production Management, 33(5), pp.589-
621.
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Kirchmer, M., 2012. Business process oriented implementation of standard software: how to
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