Organisational Strategy and Leadership Analysis for Woolworths

This report provides a comprehensive analysis of Woolworths' organisational strategy and leadership within the Australian retail supermarket industry. It begins with a business overview and then delves into strategic analyses using SWOT and PESTLE frameworks to assess internal strengths and weaknesses, along with external political, economic, social, technological, legal, and environmental factors. A five forces analysis examines the competitive landscape, including threats from new entrants, substitute products, and the bargaining power of suppliers and consumers. The report further discusses the impact of macro-environmental variables on Woolworths' present and future performance, as well as industry forces affecting profitability. It concludes with recommendations for improvement and a summary of key findings, offering insights into Woolworths' strategic positioning and future prospects.

Running head: ORGANISATIONAL STRATEGY AND LEADERSHIP
Organisational strategy and leadership
Name of student
Name of University
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1ORGANISATIONAL STRATEGY AND LEADERSHIP
Table of Contents
Introduction................................................................................................................................3
Business overview......................................................................................................................3
SWOT and PESTLE..................................................................................................................3
Five forces analysis....................................................................................................................5
Impact of macro environment variables on the present and future performance.......................6
Industry forces associated with the profit level achieved..........................................................7
Recommendations......................................................................................................................8
Conclusion..................................................................................................................................8

2ORGANISATIONAL STRATEGY AND LEADERSHIP
Introduction
The retail supermarket industry in Australia is a mature industry consisting of the
retail groceries and a large food line. The retail industry has managed to implement cost
reduction strategies and managed differentiation of products and services for sustaining
competitive advantage and at the same time, ensure smooth business functioning within the
external business environment with ease and effectiveness. The business organisation
selected here as the case study is Woolworths, which has implemented effective strategic
planning for responding to the external business environment and at the same time, achieve
competitive advantage and profitability (Parisi 2013). The factor change in the future and its
impact on the profitability of the retail industry will also be focused on in this report to ensure
that both the present as well as future performance of the organisation and the industry are
influenced positively towards successful growth, development and competitive advantage in
business too.
Business overview
The business organisation selected here as the case study is Woolworths Supermarket,
which is one of the largest supermarket or grocery chains in Australia that has constituted a
he percentage of the market in Australia. The company operates in over 995 locations and the
numbers if employees are present are 115000. The company is specialised in the providing of
grocery items along with technological products, health and wellbeing products, household
items as well as baby and pet supplies to cater the needs of people whereas the online website
managed by the company has further helped in enhancing the delivery of products and
services through online shopping or e-commerce (Woolworths.com.au 2019). The company
has a revenue of A$56.726 billion, which ensures good growth and profitability in relation to
the retail supermarket sector in Australia.

3ORGANISATIONAL STRATEGY AND LEADERSHIP
SWOT and PESTLE
The strategic analysis demonstrates the company’s inclination to the strategy and how
it has influenced the organisation to achieve higher growth, development and management of
business operations smoothly. The company aims to fulfil the needs and preferences of the
customers and also influence the staffs by keeping their preferences and needs met and to do
so, the external environmental analysis is done for determining the factors and variables
impacting the business performance and industry (Cserháti and Szabó 2014). The Australian
supermarket industry is highly competitive and thus the various environmental factors, both
internal and external have created significant level of change and facilitated the development
of strategic planning, needed to maintain highly skilled workforce, good organisational
infrastructure and effective sourcing abilities too.
SWOT
Strengths
 Woolworths Supermarket Limited is
a major market leader within the
retail industry of Australia
 The company has exploited the
resources, both financial,
technological and human resources
to ensure smooth business
functioning (Johansson, Miller and
Hamrin 2014)
 The company has also managed
application of resources influenced
Weaknesses
 The poor positioning strategy has
often made the organisation fail to
segment the right market and set
prices that can meet clients’
requirements
 The price wars have affected the
company’s ability to sustain in the
competitive business environment
 The Government of Australia has
prevented Woolworth’s activity to
set higher prices for the products

4ORGANISATIONAL STRATEGY AND LEADERSHIP
the external environment to create
positive impact in terms of
environmental friendly packaging
and achievement of zero food wastes
too.
 Good market segmentation and
aggressive promotional strategies
have helped in enhancing brand
image and exposure.
while collaborating with Coles,
which has affected the sales revenue.
Opportunities
 The new technological
advancements have facilitated the
personalised services, self-check-in
and checkout along with
management of loyalty schemes to
create convenience for the clients.
 The multi-options retailing is sure to
enhance the organisational ability to
respond to the changing needs and
behaviours of clients
(Woolworths.com.au 2019).
Threats
 The presence of competitors pose
serious threats to the company
 The emergence of new and
substitute products has also affected
the company to sustain in the long
run (Omotayo 2015)
 The changing trends caused due to
customers’ focus more on health
conscious products and services
have created major threats too.

5ORGANISATIONAL STRATEGY AND LEADERSHIP
PESTLE (Macro environmental factors)
The PESTLE analysis demonstrates the consideration of political, economic, social,
technological, legal and environmental factors that are associated with the creation of impact
on the business as well as the industry a present and in the future as well. The political factors
impact both the organisation and the industry to a large extent at present, there are evidences,
which showed that the Australian Federal Government has implemented a competition policy
for the purpose of preventing Woolworths and Coles to eliminate any competition, rather
create scopes for the small scale industries to grow and develop in Australia (Nankervis et al.
2016).
The economic factors indicate economic decline in the market, which has influenced
the performance of the organisation within the retail sector too. The fluctuations in rate of
interest, currency exchange and weak value of Australian dollar have also created a negative
impact on the retail operations and processes managed globally within the Australian retail
sector (Woolworths.com.au 2019).
Considering the fact that Australian retail supermarket industry has aimed at
achieving higher growth and societal development, the social trends are considered here. The
companies have aimed to become socially responsible, which has been possible with the help
of implementing various societal approaches and create positive impact on the customers too
(Devin and Richards 2016).
With the advancement of technology, the company has successfully managed new
marketing activities through digital promotions and advertisements on televisions, websites
and social media platforms, which influenced the business functions too. The application of
green refrigeration technology further ensured that the products that are consumable can be
stored for a long time for usage afterwards.

6ORGANISATIONAL STRATEGY AND LEADERSHIP
The carbon tax laws, various legislations along with the rules and regulations by the
Australian Competition and Consumer Commission have influenced the business functions
and operations all across the economy of the nation (Pollard et al. 2014). The business
organizations within the industry must focus on acting fairly and conduct ethical business
practices by following organisational policies and reforms to improve the efficiency of
business performance and create a positive impact on the industry at present and in the future
too.
It has been found that various functions and processes managed within the retail
supermarket industry have caused adverse impacts on the environment as well as threatened
the business performance by affecting both the revenue generation and opportunities for
growth and development. The concerned industry needs to assess the environmental
conditions and make sure to respond to the changes within the environment, furthermore
ensure sustainable business practices’ management (Sutton-Brady, Kamvounias and Taylor
2015). All these factors are also considered as the macro environmental variables in the
external business environment that can impact both the present and future performance.
Five forces analysis
The analysis of five forces for the industry selected here can help in understanding the
current position of the industry and how the various factors and variables are associated with
the influence on profitability at the present and in the future as well. According to Parisi
(2013), there are multiple industry forces that have influenced the attractiveness of the
industry such as the threat of new entrants, threat of substitute products, buying power of
suppliers, buying power of consumers and competitive rivalry (Parisi 2013). The potential
new entrants have aimed at the good return on investments and barriers to low entry. It is a
challenging climate, which may also result in affecting the growth in revenue and create

7ORGANISATIONAL STRATEGY AND LEADERSHIP
scopes for the new entrants in the market to set aside the actual products delivered by
Woolworths (Eberhard and Craig 2013). The new entrants making a mark within the
Australian retail supermarket chain have also diminished the scopes for substantial market
entry though Aldi and Costco have managed to enter the Australian supermarket due to the
attractiveness of the rate of return on investments to the global organisations
(Woolworths.com.au 2019).
The threat of substitute products can be high in case the value proposition offered is
different from the current products offered within the concerned marketplace. Due to the
presence of multiple competitors, there is emergence of similar kinds of products and services
that are made available in the market at lower prices and this often affects the industry
behaviours. The company needs to become service oriented rather than being product
oriented to understand the core needs of clients, furthermore increase the cost of switching
for the customers engaged within the industry (Khalil Darwish and Singh 2013).
The buying power of consumers is immense as their needs and requirements change
from time to time, which make the industry and the business operating within it, to become
susceptible to changes. Not only does the purchasing power of clients affect the profitability
attained by the company, but also the clients seek for higher discount level and additional
offers, which could influence their buying behaviours too (Guercini and Runfola 2015).
The bargaining power of suppliers is huge and as stated by Aschemann-Witzel et al.
(2017), the companies within the retail supermarket chain in Australia draw in raw materials
and resources from multiple suppliers. The suppliers who have good position within the
industry and are closely related to the businesses may reduce the profit margin to be achieved
in the marketplace. Within the Food and Staples retail industry, the suppliers demand high

8ORGANISATIONAL STRATEGY AND LEADERSHIP
price from the business due to their high power to negotiate, which affects the profitability to
be achieved by the organisation and the entire industry (Aschemann-Witzel et al. 2017).
The threat of competitive rivalry is another major force contributing to the
profitability of the industry and the prices set for the products and services within the retail
industry. The competition has often affected the industry potential and built scale for
competing within the industry, furthermore, ensured managing collaboration with the
competitors and increase the market size too. Woolworths Limited should differentiate its
products and services for ensuring sustained competitive advantage within the marketplace
and at the same time, facilitate the customers’ ability to understand the differences between
the current products and those offered by other companies within the retail supermarket chain
in Australia (Kennedy 2016). Therefore, these are the various forces that have affected the
business functioning and profitability within the industry at present and in the future as well.
Analysis of variables in the external environment
The external environment constitutes of the different sets of variables, both internal
and external that have influenced the business functions and processes. Al these external
factors or variables are needed to e responded to properly and considered to manage good
flow of business operations and processes and at the same time, influence the strategic
planning to drive growth and sustainability in business. These external factors are not only
associated with the creation of impact on the industry, but also enables influencing the
present and future performance of the organisation within the retail industry of Australia
(Becherer and Helms 2016). The external environment includes both micro and macro
environmental factors that are responsible for influencing the industry positively and for
creating positive effects on the business at present and in future as well.

9ORGANISATIONAL STRATEGY AND LEADERSHIP
There are multiple variables in the external business environment that have affected
the business operations of the organisation on a positive note whereas the factors that do not
have any control of by the organisation are responsible for making the organisation achieve
the skills and ability to adapt and ensure successful changes all throughout. The major macro
environmental factors, which have been the focus on this topic, include the political, socio-
cultural, economic as well as the technological, legal and environmental factors that have
impacted the organisation and the industry within which it operates at present (Lusch,
Serpkenci and Orvis 2015). The company should build effective supply chains and establish
relationships with multiple suppliers to make sure that the business do not depend on a
specific supplier always.
Impact of macro environment variables on the present and future performance
From the analysis of different variables, it is understood that to make effective
marketing decisions, the political and legal factors associated with the business functioning
are needed to be considered. These are the macro environment variables within the external
environment, which not only affects the decision making ability of the organisation, but also
influences the production level and ability to become socially responsible. The social and
cultural factors comprise the macro environmental variables that have created an impact on
the market conditions and the society. To ensure management of professional standards and
ethical business practices, Woolworths needs to eliminate ay components that might be
associated with the production process, though considered as harmful for the community and
environment (Nag, Han and Yao 2014). The Australian retail supermarket chain comprising
of the companies have moved towards environment friendly approaches and sustainable
techniques to bring production of environment friendly products and services that can met the

10ORGANISATIONAL STRATEGY AND LEADERSHIP
quality standards as well as make the company achieve sustainability (Woolworths.com.au
2019).
The societal values contribute to the health living and thus the buying behaviours of
consumers are also influenced sometimes, which has resulted in increasing the demands for
organic produces. The households in Australia have been more inclined towards the organic
produces, which has made it easy for the company to manage distribution of organic
produces and meet the demands in the marketplace with much ease and effectiveness
(Jenkins and Williamson 2015).
The demographic forces are the educational level possessed by individuals, income,
cultural features, household lifestyle, age and ethnicity that have created impact on the
different segments of market within the concerned industry. To ensure managing the
demographic forces properly, the company and sure to set prices for the products and services
wisely for targeting the different market segments with much ease and effectiveness (Kurnia
et al. 2015).
The technological skills are facilitated with the development of training and
assessment of development needs by the industry to improve the skills and knowledge of
workers, furthermore facilitate the production and delivery along with enhancing the
marketing features to enhance brand exposure and draw in more clients while the
environmental factors are also considered to maintain the ethical standards and contribute to
the wellbeing of the environment with ease and efficiency (Burch, Dixon and Lawrence
2013).
Industry forces associated with the profit level achieved
Considering the statements made by Berchicci (2013), the buying power of customers
is the force put by the supermarket chains within the retail industry to the supplier. As the

11ORGANISATIONAL STRATEGY AND LEADERSHIP
suppliers consider that the supermarkets account to more than 50 percent revenue of the food
processor, so they need to deliver good quality resources and raw materials for meeting the
requirements of the supermarket easily. The backward integration achieved with the help of
acqusitions could help Woolworths to work with smaller businesses and at the same time,
replace the brand of suppliers with own brand, which has been a major trend nowadays
(Berchicci 2013).
According to Foss, Lyngsie and Zahra (2013), there has been a good amount of shift
in the food supply chain in Australia, which increases the scopes for suppliers to acquire good
amount of power and authority over the marketing techniques and maximise the return on
investments made. From various evidences, it was found that Woolworths attracted the right
suppliers who had less switching power and due to the good amounts of money provided to
them, the company has maintained a steady production and delivery of products and services
to the clients (Foss, Lyngsie and Zahra 2013). By developing a steady and supply chain with
multiple suppliers, the company could experiment with new designs of products and facilitate
innovation perspectives to sustain at present and in the future where new and changing
demands of customers would likely emerge.
To deal with the changing demands and expectations of customers, the company
should involve the social media platforms to create a strong and large customer base,
furthermore, create more scopes and opportunities to streamline its sales and processes of
production. The innovation of products and services through research and development
activities would also assist in offering products at discounted prices without though
compromising on the quality, which might even limit the bargaining power of purchasers
(Nazari, Herremans and Warsame 2015).