Analysis of Woolsworth's Focused Differentiation Strategy in Retail

This report provides an analysis of Woolsworth's focused differentiation strategy, highlighting how the company aims to gain a competitive edge in the retail market. Woolsworth has adopted a strategy of focusing on impulse buying, particularly targeting adult consumers by creating a dedicated section for snacks and drinks. This approach differentiates Woolsworth from competitors like Coles, leveraging the changing consumer behavior of frequent, smaller purchases throughout the day. The report discusses the benefits of this strategy, including increased footfall and a shift away from a traditional focus on children's impulse purchases. It also references Michael Porter's theory of generic strategies to contextualize Woolsworth's approach. The overall conclusion is that focused differentiation is a valuable strategic tool for organizations seeking to stand out and capture a specific market segment. This assignment, along with many others, is available on Desklib, a platform for students to access past papers and solved assignments.

Running head: FOCUSED DIFFERENTIATION STRATEGY OF WOOLSWORTH
FOCUSED DIFFERENTIATION STRATEGY OF WOOLSWORTH
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1FOCUSED DIFFERENTIATION STRATEGY OF WOOLSWORTH
Focused differentiation is the technique of differentiating the products or services of
the company from the competitors thereby focusing on a particular segment of target
audience (Nickols, 2016). Woolsworth recently adopted the technique of focused
differentiation to have a competitive edge over its competitors. It has focused on the buying
behavior of customers when they go for shopping and as a result are now emphasizing on
impulse buying. This essay is focused on highlighting the strategy adopted by Woolsworth
for gaining a higher market share and differentiating it from competitors in the market place.
Woolsworth has adopted the strategy of focusing on impulse buying to create a
differentiation and unique selling proposition. It is targeting the adult audience for this
approach because it is seen that this habit of impulse buying is prominent in them after
children. Recently the company has decided to attract the adult segment of market because
they do not feel guilty of their consumption of snacks or any other food (www.news.com.au.
2019). Earlier the snacks and chocolate section was kept near the billing counter because it
was considered as a successful technique for attracting kids into impulse buying. This
technique was not so successful because most of the times, their parents stopped them from
eating chocolates or other snacks.in case of adults however it is not the case because they can
eat whatever they like. As a result, Woolsworth has added a section that can be called the
adult heaven providing various snacks and drinks that is liked by adults. The competition
between Woolsworth and Coles supermarket is very fierce but with this step taken up by
Woolsworth can have an advantage over Coles (Knox, 2015). It has decided to shift from
kids snacking into an adult snacking store because it has a number of benefits. More adults
will be attracted to Woolsworth as compared to any other store and adults will prefer this
supermarket because if the kids snacking section is removed they will be saved from the guilt
of children asking for treats. To compensate for this act of company, it has decided to give
free samples of fruits to the children at the entry of the store so that they may not expect a

2FOCUSED DIFFERENTIATION STRATEGY OF WOOLSWORTH
chocolate and snack section at the exit of the store. People are shifting from meals three times
a day to eating in small amounts through out the day. This further enhances impulse buying
and increases footfall of customers in supermarkets because they are not sure what they want
to buy. Michael Porter has defined this technique of focused differentiation in his theory of
generic strategies for providing a competitive advantage to the company (Bertozzi, Ali &
Gul, 2017).
From the above discussion it can be concluded that focused differentiation can be an
important strategy for any organization. It provides a competitive edge to the organization by
differentiating it from its competitors and targeting on a particular segment of market.
Woolsworth has gained an advantage over Coles supermarket by adopting this technique.

3FOCUSED DIFFERENTIATION STRATEGY OF WOOLSWORTH
References
Bertozzi, F., Ali, C. M., & Gul, F. A. (2017). Porter’s Five Generic Strategies; A Case Study
from the Hospitality Industry. International Journal For Research In Mechanical &
Civil Engineering (ISSN: 2208-2727), 3(2), 09-23.
Knox, M. (2015). Supermarket monsters: The price of Coles and Woolworths'
dominance (Vol. 6). Black Inc..
Nickols, F. (2016). Competitive Strategy and Industry Analysis.
www.news.com.au. (2019). Woolies’ new plan to get you to spend more. Retrieved from
https://www.news.com.au/finance/business/retail/woolworths-renewed-focus-on-
multibillion-dollar-impulse-purchase-market/news-story/
5fea8b12626f520b8d3737f2bcb4cdb0