MMM132 - Business Report: A Comprehensive Analysis of Woolworths

This report provides a comprehensive analysis of Woolworths, a prominent Australian supermarket chain. It begins with an executive summary that outlines the key aspects of the report, including an examination of the external environment using the PESTLE framework, encompassing political, economic, social, technological, legal, and environmental factors. The report then delves into the economic trends affecting Woolworths, such as population growth and GDP fluctuations. An internal business environment analysis is conducted using Porter's Five Forces model, assessing industry rivalry, customer and supplier power, and the threat of substitution and new entrants. The report also explores industry regulations and Woolworths' adherence to them. Furthermore, it examines the company's ethical and social responsibility initiatives, highlighting its commitment to worker rights, environmental sustainability, and community engagement. Finally, the report applies Mintzberg's model of managerial roles to identify the most suitable leadership role for a marketing manager within Woolworths.

RUNNING HEAD: WOOLWORTHS
MANAGEMENT
BUSINESS MANAGEMENT

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Executive summary
The report reflects on Woolworths, it is a recognized supermarket chain from Australia with a
high number of retail stores in the international market. The external environment factors of
PESTLE involve Political, Economic, Social, Technological, Legal and Environmental
factors. All these factors form the part of the general environment and it lays a direct impact
on business organization. Woolworths is experiencing the fine business environment in
account of these factors. The economic trends state that there is a continuous increase in
population but the fluctuation in GDP. The internal business environment considers multiple
factors to assess the company’s position in the industry.
The application of Porter’s Five Forces Model states that Woolworth’s faces mediate
competition, mediate customer’s power, low supplier’s power but the high threat of
substitution. The retail industry offers a passable environment to the company.
Considering the ethics and social responsibility, Woolworths has devoted high efforts and
gained multiple awards for its response towards the fulfillment of CSR. It has laid its steps
for minimizing carbon emission, developing educational programs and initiating offering
healthy products.
Mintzberg’s model involvers multiple roles for the manager and it is mainly divided into
three parts. As per the suitability and preference, a leadership role will best align with the
applied job of marketing manager at Woolworths in Australia.

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Contents
Introduction................................................................................................................................3
Task 1.........................................................................................................................................3
General Environment..............................................................................................................3
Economic trends.....................................................................................................................4
Task 2.........................................................................................................................................5
Internal business environment................................................................................................5
Industry regulation..................................................................................................................6
Task 3.........................................................................................................................................7
Ethics and Social responsibility..............................................................................................7
Task 4.........................................................................................................................................8
Conclusion..................................................................................................................................9
Bibliography.............................................................................................................................11

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Introduction
The report is prepared on a reputed international organization named ‘Woolworths’. It is a
multinational chain of supermarket stores based in Australia. It has a high presence in
Australia as well as in other parts of world. In Australia it has around 995 stores and it serves
more than 29 million customers per week (Woolworthsgroup, 2020). It was founded in the
year 1924 and offering a wide variety of products including grocery, beauty, electronics, baby
products and books. It has physical as well as a digital presence in the global market. It forms
the part of the retail industry of Australia and employs the strength of 115000 in stores
(Woolworthsgroup, 2020). Therefore, it is a reputable supermarket store because of its high
presence, reputation and the high number of the customer base.
The key aim of the report is to analyze the business (general environment, industry
regulation, ethics and social responsibility) of the company to fulfill the purpose of seeking a
fine job position.
Task 1
General Environment
General Environment considers the external factors in which business operates and it includes
political, economic, social, technological, ecological and legal factors. These factors
influence the performance of the business in the market (Cadle et al., 2014). It involves the
application of the PESTLE framework to analyze the general environment. It is a theoretical
model to analyze the business environment of a company. It allows the company to gain
reasonable information about the favorable and unfavorable factors prevailing in the external
environment (Ho, 2014).
Political Factor: It considers elements like government integrity, corporate tax rate, trade
restrictions and other trade-related policies in the country (Perera, 2017 ). The Australian
government charges a corporate tax of 30 percent and it has fine integrity (Heritage, 2019).
The moderate corporate tax rate will allow the company to raise more profit after tax
deduction. Therefore, it will enable the company to experience high financial earnings.
Economic Factor: It focuses on Gross Domestic Product, Per Capita Income, Disposable
Income, Inflation and unemployment rate in the country (Wallis, 2017). Considering the

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Australian business environment, it has a population of about 24.8 million. The GDP of the
country is $1.2 trillion with an annual growth of 2.4%. The fine GDP depicts that customers
have adequate income to easily purchase the company’s product. The PCI is $50,334 and its
unemployment and inflation rate is a mere 5.6% and 2% (Heritage, 2019). In the presence of
fine GDP, PCI and low unemployment rate, the company will not face difficulty in raising its
sales and it will allow the employee to avail better return.
Social Factor: It emphasizes on customer’s buying behavior, purchasing power,
demographics, purchasing habits, and brand loyalty (Robertson, 2015). Australian customers
show a high degree of brand loyalty towards Woolworths. It will benefit the company in
earning a high profit. Therefore, the employee will not be prone to issues like retrenchment.
Technological Factor: It refers to the level of technological, automation, and speed of digital
connectivity prevailing in the country (Robertson, 2015). The availability of upgraded
technology will assist the Woolworths employees in easily completing their task without
devoting high physical efforts.
Environmental Factor: It includes the climatic conditions and risk hazard associated with the
country (Cadle et al., 2014). Australia does not have high risk from natural hazards like
earthquakes and tsunami and therefore Woolworths Australia offers a safe work environment
for employees.
Legal Factor: It considers the laws associated with health safety, consumer, advertising
standards and the patent rights. The government lays prior attention in safeguarding the rights
of the workers and patent rights of the company (Heritage, 2019). Therefore, it offers a
passable legal environment to Woolworths.
Economic trends
The Australian economy growth was slowed in the year 2019 in almost two decades (Taylor,
2019). In the last quarter of 2018-19, the GDP growth was a mere 1.3% (Theguardian, 2019).
The rising population will generate more demand for the product. This trend will assist the
company in raising its overall sales. The higher demand will directly generate more
employment, sales revenue, and profitability.
There is also fluctuation in the economic growth of the country and the unemployment level
is also reduced (Focuseconomics, 2019). This states that individuals are skilled and can attain

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job opportunities. The company will be able to gain more skilled employees for the
completion of work.
Figure 1: Australia economic outlook
Source: (Focuseconomics, 2019)
Task 2
Internal business environment
Porter’s Five Force Model enables in assessing the internal environment of the organization.
It considers the five factors to assess the favourability of the industry. It helps the
organization in gaining information based on the possible threats in the industry (Porter,
2017).
Industry Rivalry: It refers to the level of competition prevailing in the industry. The intensity
of competition directly increases in the presence of a high number of players. In the
supermarket retail industry of Australia, there is mediate number of players. The key players
are Coles, ALDI, IGA, Friendly Grocer, Foodland and Star Mart including Woolworths
(Thetoptens, 2020). This states that the retail industry has an adequate number of players.
Additionally, Woolworths experiences more competition from ALDI. This is because ALDI

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offers products at a subsequently low price. Hence, Woolworths experiences competition
from its rivals.
Customer’s bargaining power: It is the power of the customers to attain the product at a low
price. Woolworths serves a high number of customers in Australia. As mentioned above it
serves about 29 million customers per week. Additionally, customers from Australia are price
sensitive. But the switching cost from Woolworth to ALDI/COLES is low. Therefore, the
bargaining power of customers is mediate.
Supplier’s power: Woolworths has a high number of suppliers and it includes Teys Australia,
red meat, supply chain solution provider (FMCG, 2016). It has not relied on single supplier
and therefore it purchases the raw materials from multiple suppliers. Therefore, Woolworth’s
suppliers have low bargaining power.
The threat of substitution: This threat emerges when the buyers can easily find substitute
products with low prices and of higher quality (Magretta & Porter, 2012). In this situation,
they substitute their product to attain maximum benefit. In the retail industry, Woolworths
also faces the threat of substitution from Coles and ALDI. However, ALDI offers a higher
threat to the company because it offers its products at low prices than Woolworths. It is
attracting loyal customers of Woolworth’s through its economical pricing. Hence,
Woolworths faces a high threat.
The threat of new entrant: The threat of new entrants is high when the existing company does
not possess patent, goodwill and loyal customers. The existing supermarket of Australia like
ALDI, IGA, Coles attain patents as well as loyal customers. Therefore, the new entrant will
face difficulty in entering the retail industry. Therefore, Woolworths will experience low
threats from the new entrants.
Industry regulation
The government develops laws to regulate the industry and the business enterprises have to
adhere to these laws. Woolworth’s forms the part of the retail industry of Australia and it also
has to lay attention towards the fulfillment of these laws.
It has to lay prior consideration towards Competition and Consumer Act 2010, Australian
Consumer Law, National trade measurement legislation and Greenhouse and Energy
Minimum Standards and many more.

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The Australian Competition & Consumer Commission guide also includes multiple
guidelines. Additionally, the company has to register with the Australian Taxation office. The
company has to strictly follow the regulation of occupational health and safety (Business,
2020).
These policies, guidelines and regulations lay a high impact on the company. The company
has to highly adhere to these policies. Therefore, failure in complying with these policies may
lead to imposing of heavy penalties on the company.
Task 3
Ethics and Social responsibility
Social responsibility is ethical theories that emphasize the companies to fulfill their duty
towards the environment and society. It involves adopting activities that are most suitable for
society well-being. The organization must be accountable to the need of society (S.S., 2014).
The fulfillment of ethics and social responsibility contributes to the economic growth and
welfare of society. It also enhances the business reputation and goodwill of the company in
the country (Chell et al., 2016).
Woolworths has taken multiple initiatives to fulfill its responsibility towards society. Below
is the information about the initiatives and awards based on ethics and social responsibility.
In July 2018, it has a lunched ‘The Responsible Sourcing Program’ to promote the rights of
its workers. It organizes training sessions to assist the workers in their work performance and
to gain new information.
In February 2019, it has re-launched the ‘Speak Up’ tool. It allows the suppliers and workers
to share their confidential grievances directly with the Woolworths team. It provides the
convenience of sharing problems via multiple channels as per the suitability
(Woolworthsgroup, 2019).
In July 2019, it has awarded the best corporate social responsibility initiative
(Woolworthsholdings, 2020). Stakeholders form the key part of the company and society
therefore Woolworth’s offers quality support to its stakeholders (customers, suppliers and
operations) as to how to respond to climatic change.

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In September, Woolworth’s Waterstone store has received a rating of 4-star from the green
building council of South Africa. It has also launched a new plant-based protein range of
food. Through this step, it is offering concern towards its customers by offering healthy food
products (Woolworthsholdings, 2020). It has fulfilled the growing need of the customers 640
new Own brand products to the customers. It has benefited the company in gaining the title of
‘Healthiest Own brand’ in Australia from the ‘George Institute of Global Health’. It is also
raising awareness among the customers to opt for healthier choices by developing programs
like ‘Earn and Learn’, ‘Fresh Foods Kids Discovery Tour’ (Woolworthsgroup, 2019).
Woolworths has launched 10 Myschool Grow Educare Early Childhood Development
Centres. It has removed the plastic-stemmed earbuds from its stores. It was recognized as a
key partner in education sector. This is because it has undertaken efforts to raise the
education in society. It has initiated restricting the usage of plastic bags and has offered
reusable bags in four of its stores. Through this action, it is devoting efforts to minimize the
problem of plastic pollution in the country and to motive the customer to restrict the usage of
plastic.
Woolworths has devoted a high degree of effort and time towards the society and it has
allowed the company to gain 6-star ratings for its Palmyra store from the GBCSA. It has
received the highest possible rating (Woolworthsholdings, 2020).
It has reduced the carbon emission by 18% and generates power (10686MWH) through solar
plants. It depicts that it is laying steps for the effective use of natural resources
(Woolworthsgroup, 2019).
Task 4
Mintzberg Model provides the 10 different roles of a successful manager. As per this model,
manager job is divided into three roles named Interpersonal, Informational, and Decisional
roles. The interpersonal role includes Figurehead, leader, Liaison and Informational roles
include monitor, Disseminator and spokesperson. The decisional roles comprise of an
entrepreneur, disturbance handler, resource allocator and negotiator (Edwards, 2014).
All the job roles require different skills and knowledge for performing the job role
effectively. I wish to seek the position of marketing leader in the company and therefore I
will opt for the Interpersonal Role of leader from the Mintzberg Model.

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A leader is a person who leads, motivates, boosts employee work performance, and
undertakes decisions to the morale of the employees for the fulfillment of organizational
objectives. The leader attains a duty to ensure long term success for the company. He is
responsible for generating integrity among the members of the organization. There are
multiple functions of a leader and supervision is a key among them. This helps the employees
in gaining quality support and assistance form the leader. A leader also helps in conflict
management between the human resources of an organization and enables in maintaining
discipline in the work environment of an organization. It will help in increasing employee
dedication and attention towards the work. It will ultimately enable in gaining quality
performance from the employees. It will minimize the employee’s errors and it will result in
cost-saving as incur of fewer errors will lead to less wastage of resources and time of the
employees.
The marketing manager of Woolworths involves motivating the employees of the marketing
sector to gain the best possible ideas. It will enable to develop and raise creative ideas from
the human resource. As a marketing leader, it develops the duty to seek effective ways of
promoting Woolworths in Australia. It will enable the company to minimize its competition
from ALDI. Providing an effective leader to the employees will help in providing adequate
support to the employees and gaining positive word of mouth. Additionally, it will enable in
generating positive employee reviews. This will raise the organization’s goodwill in the
market and it will able to easily recruit employees in the future.
To improve in the area of leadership, I have opted for an internship and it has provided me
information as to what will be my duties as a marketing manager and what are the possible
skills that I am lacking. I have assessed creativity skill and it is analyzed that this skill is
highly essential to seek the position of a marketing manager. Additionally, I have also opted
for seeking help for interview preparation. I have gained quality knowledge regarding the
essentials for a fine interview. I have come across that confidence and knowledge is the key
to crack interview (Deakintalent, 2020).
Conclusion
The report summarizes the concept of business analysis of Woolworths with the aim of
seeking a job in the company. From the above discussion, it is acknowledged that
Woolworths is a reputed business organization with a high presence in Australia as well as in

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the global world. The general environment considers the economic, social, political, legal,
technological and environmental factors. By analyzing the general environment of
Woolworths it is analyzed that Australia offers a fine external environment to the company.
The economic trends state that it will also impact the company’s work performance. It is
analyzed that Woolworths lays active participation in fulfilling its responsibility towards
society. From the industry analysis, it is evaluated that it faces mediating competition and
attains the threat of substitution from ALDI. It is recognized that there are multiple
regulations in the industry that has a direct impact on the company. From the Mintzberg
model, it is evaluated that ‘Leadership’ role best suits and matches the applied job position of
the marketing manager.

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