Analysing Woolworths' Strategy: PESTLE, Porter's Five Forces, SWOT

This essay provides a comprehensive analysis of Woolworths, a leading Australian grocery outlet, using three strategic tools: PESTLE, Porter's Five Forces, and SWOT. The SWOT analysis identifies Woolworths' strengths (strong market position, recycling policy), weaknesses (government limitations, partnership constraints), opportunities (changing consumer lifestyles, supply chain improvements), and threats (competition, regulatory changes). The PESTLE analysis examines the political, economic, social, technological, environmental, and legal factors affecting the company. Porter's Five Forces analysis assesses the bargaining power of buyers and suppliers, the threat of new entrants and substitutes, and the rivalry among existing firms. The essay concludes that these tools are essential for understanding the external and internal environments, enabling companies to develop effective strategies for sustainable growth and competitive advantage.

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

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The three strategic tools that will be discussed here are pestle, Porter's five forces, and
SWOT. The company that will be discussed here is one of the leading grocery outlets in
Australia, Woolworths. In order to attain a good level of growth, they have to have a clear idea
about the internal and the external environment. This will help them to identify their areas of
strengths and weaknesses as well (Theaker 2017).
SWOT Analysis
Strength-
This mainly talks about the areas of strengths that a company has. This helps the
company in understanding the uniqueness that is present within hem and not in any other
company. What the driving factors that would attract the customers to this company than others.
For an instance, Woolworths is already the leading retail company in Australia and it uses its
strong market position as one of the major strengths. It also uses good technological sources.
They have a strong resolves base along with good human resource and a potential position in the
market. They also use the policy of recycling g that makes them unique. Reduction in carbon
footprint and in packaging costs. The zero food waste which is part of their CSR is also one of
their major strengths (Fabbri and Klapper 2016).
Weakness-
This shows the areas that the company can improve in the long run and what are the facts
that they must avoid. The weakness of Woolworths is that the Government limits its move so
that the price of the products can be kept high. Its partnership with Coles often limits its ability to
rule the Australian retail market (Fernie et al. 2015).

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Opportunities-
This mainly shows the areas in which the company can actually improve in some areas
and can utilize the changes taking place in the market or in the government policies in a better
way. Woolworths uses the opportunities like the changes in the lifestyle of the consumers, the
changes in the supply chain in the best way possible. They try their level best to cope up with the
changing needs and demands of the consumer (Song et al. 2017).
Threats
This mainly shows the treats that the company might be facing and to decipher the ways
in which they might give a tough competition to their competitors. The major threat that
Woolworths has is from the other competitors. One among them is Coles. Government rules and
the frequent changes in the tax policies and the rules and regulations is also one of the major
threats (Obeng et al. 2016).
The macro environmental factors that affect the company are determined through the Porters’ 5F
and the PESTEL analysis
Political-
The political condition greatly affects the working of a company because the government
might impose a new tax or some new rules that will be affecting the workings of the company.
The Australian Govt. implements many new rules that affect the working of the Woolworths
(Balasopoulou et al. 2016).
Economic-

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Economic changes play a major role in the working of any companies. There can be
changes in the economic trends like a change in the value of currency or changes in economic
market condition. There have been changes in the currency and this has greatly weakened the
Australian dollars and gas affected the working of the retails companies like Woolworths
(Thomas et al. 2014).
Social
The social trends like the culture, demography and other such things create many changes
in the workings of the companies. Woolworths have to take up more social initiatives and
promote the social and community welfare. The customers want that the companies are taking up
more corporate and social responsibility (Thomas et al. 2014).
Technological
Technological advancements are one of the most important things that the companies
must consider in order to provide better facilities and products to their customers. Woolworths
have started using the green refrigeration technology that is helping in storing the perishable
products for a long time (Greenspan 2015).
Environmental
The environmental factors are very important in case of the workings of any companies.
The factors include the climatic and the geographical conditions. Woolworths particularly is
likely to get affected by the climatic and the weather conditions because of cultivation and
agriculture of all fresh fruits, vegetables, and other products are largely dependent on the climate.

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The petrol and the winemaking business also depend on the environment and these activities
might harm the environment in many ways. So, Woolworths have to take proper measures.
Legal
The law that is enforced in the country has a major impact on the working of the companies.
Particularly Woolworths is affected due to the legal laws like the carbon law that has been
implemented by the Australian government. Being a leading firm in the market, it has to abide by
the law and adopts the fair policy.
Bargaining power of the buyers
The bargaining power of the consumers is one of the most important aspects that affect
the position and the working of the company. As there are many alternative options for the
consumers in Australia they can easily switch over to any other supermarkets (Vontetsianos and
Geitona 2016). So, the bargaining power has always stayed high.
Bargaining power of the suppliers
The bargaining power o the suppliers are also high orb moderate. There are many
suppliers who can actually give a very tough competition to Woolworths (Yunna and Yisheng
2014).
Threats of new entry

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This is one of the major concerns for the companies because the customers are always in
need of something new and innovative. So, if new firms enter the market and provide the
customers with new products at a discounted price then it is likely that the consumers will shift
their attention to those alternative firms. However, Woolworths is already the leading retailers in
Australia and has bee enjoying a good position so the threat of entry of new firms is unlikely.
The market is rigid and is already taken over by the companies like Woolworths and Coles. So it
would be very difficult for the new firms to enter and operate.
Rivalry among existing firms
Apart from the entrance of the new firms, the competition can also start within the
already existing firms. There can be a very tough competition taking place between one firm and
the other that are already operating within the market. In case of Woolworths, the chances of
enmity among the already existing firms are really very high. The major competition exists
between the markets like Asda, Coles, Wesfarmers, and Woolworths. So, the internal
competition going on between these firms are really very high.
The threat of Substitute-
If there are some alternative products or substitutes then the customers might shift their
attention and the existing products might suffer a loss. However, as far as Woolworths is
concerned, the threat of substitutes is really low. This is because the day to day retail products
are really essential for people and there is always a good demand for it.
Thereby it can be concluded that all these marketing tools are to be used so that the
external and the internal industry conditions can be analyzed properly. It is based on those
results that the company will be taking the further steps. It will help them to find the areas of

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strengths and the threats. Knowing the macro and the microenvironment will help the company
to take up many new strategies that will help in operating in a more efficient manner.

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