Woolworths Case Study: Challenges, SWOT, and Recommendations

This case study delves into the organizational development of Woolworths, an Australian retail giant. It provides a comprehensive overview of the company, examining its operational structure, market position, and the challenges it faces, including decreasing consumer cycles, increasing competition from rivals like Coles and Aldi, declining product quality, and a confused brand positioning strategy. The analysis includes a detailed SWOT analysis, highlighting Woolworths' strengths, such as its large market share and customer tracking, and weaknesses, such as its positioning strategy and price wars. Opportunities include targeting wider market segments and improving online services, while threats include intense competition and changing consumer preferences. The study concludes with actionable recommendations for Woolworths to improve its performance, including implementing a clear positioning strategy, improving product quality, and utilizing market penetration and product development strategies to mitigate competition and enhance customer satisfaction. The case study highlights the need for Woolworths to adapt and innovate to maintain its market leadership.

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Contents
Introduction......................................................................................................................................1
Overview of the Company...............................................................................................................1
Challenges faced by Woolworths....................................................................................................2
SWOT Analysis...............................................................................................................................3
Conclusion.......................................................................................................................................4
Recommendations............................................................................................................................5
References........................................................................................................................................6

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Introduction
The purpose of this paper is to enlighten the reader regarding the details about the company
Woolworths. The case study report elaborates the overview of the company Woolworths along
with the analysis of issues faced by the company in the business. Situational analysis of the
company will help the reader to attain information about the external as well as internal
environment of the company. Organizational development and change refers to the process
through which the business evolves and attain success in the marketplace. Organizational
development refers to the change in the structure or activities of the company with the purpose to
enhance the growth objective of the business. The organizational development process aligns the
strategies of the business along with the objective of the company. Further, more details about
the report are discussed below:
Overview of the Company
Woolworths supermarket is an Australian retail business that operates its functions in the
worldwide market. The company is also renowned as Woolies and is owned and managed by the
Woolworths Group. The company was inaugurated in the year 1924 and is headquartered in New
South Wales. Brad Banducci and Claire Peters are the two founders of the organization; these
people are a part of top level management of the company. The company Woolworths works in
the supermarket industry control more than 80% of the market share of Australian supermarket
industry. The company provides a wide diversified range of products including, toiletries, bakery
products, clothing, grocery, home furnishing, vegetables and confectioneries (Woolworths 2019).
The main purpose of the company is to ensure that all the products served in the business
environment hold up to the value of the organization and the customers do not shift to any other
organization just to satisfy their brand in the business environment. The company has formal
relationship with several other brands whose products are being sold by them in the business
environment. Further, it should be noted that the company manages 1000 stores in the Australian
market, 17 stores among them are convenience stores. The objective of Woolworths is to develop
a business that is built upon honest relationships in the environment. The aim of the business is
to focus on satisfaction level of the customers. The business works in such a way that value is

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delivered to the customers by brings best expediency in the business. The company works with
more than 201000 employees in the business environment and serve more than 29 million
customers every week. The vision of Woolworths is to make the customers happy by providing
them adequate and valuable services in the environment. Along with the products, the company
also aims to increase the quality of services in order to satisfy the people to greater extent. The
company always thrive to make use of innovation in the business environment so that the
organization’s process is technically equipped as well (Bailey 2017).
Challenges faced by Woolworths
Slow consumer Cycle: The consumer cycle of Woolworths is decreasing day by day in the
business environment that is reducing its competence to grow. The same store sales of the
company helped them to attract 1.8 per cent of people more in the business environment. In
individual term, this growth can be seen as optimum but comparing it with the growth of
competitor companies, it should be noted that the sales of Coles increased by 5.1% due to its
same store sales. Thus, it should be noted that in this way, the company is losing sales on a daily
basis. The customers whose first preference was Woolworths to buy any product from the
environment has now shifted to other company that has started to reduce 20 million sales
everyday as compared to widely successful Little Shop of Coles (Chatterji, and Fabrizio 2014).
Increasing Competitive Pressure: there is high competitive rivalry in the industry as all the
people provide indifferent products in the target market. The company is facing increasing
pressure in the environment because there is prevalence of several companies in the industrial
environment that have started to take over the market share of the company Woolworths in the
business environment. It should be noted that the company Coles is the biggest competitor of
Woolworths in the external environment that has started to capture a wider target market. Both
companies compete neck to neck in retail environment, however, due to change in the pricing
strategy of the company the business of Woolworths has subsequently reduced. Emergence of
Aldi in the external environment has also started to increase the worry for the company. The
discounted store provide better prices to the customers that any other company present in the
business environment (Biddle 2016).

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Decreasing Product Quality: The Company Woolworths has started to decrease the quality of
product in the business environment. The organization has also paid penalties in respect of not
providing adequate quality product in the business environment. Woolworths is a trustable brand
that is preferred by most of the customers in the business environment and when such brand does
not fulfil the adequate product quality requirement then the customer get highly dissatisfied from
the company. The company has started to face quality issues as they recently sold safe home
brand product that was not safe actually. The drain cleaner had a faulty child proof lid, a deep
fryer with frail handles etc. that did not align with the safe home brand of the company.
Resulting in which the false and misleading statement of the company made the customers
purchase unsafe products due to which they faced issues in the environment (Pulker, et. al.,
2018).
Confused Position of Company: Lastly, it should be noted that the company does not make use
of adequate positioning strategy in the business environment so as to clear the mind-set of the
people. The company provides optimum quality products at low rates and they provide premium
range products in the market. From the past some time, the company has started focusing on
targeting the premium range customers in the market due to which the low range customers have
started to feel insecure that the company might keep the prices of the products high intentionally
(Lau, Nakandala, and Shum 2018).
SWOT Analysis
Strength: the biggest strength of the company Woolworths in the external environment is that it
has captured largest market base in the Australian environment. The company has already taken
over more than half of the customers base present in the environment (Arli, et. al., 2013).
Further, the organization also provide optimum quality products at low rates in the market that
increase the satisfaction of customers as major people in the environment belong to economic
segment only.
Thirdly, it should be noted that the company keeps a good track record on its customers. They
track their purchasing behaviour and preference in the environment and then offer products

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accordingly. The company also provide online application services in the environment (Munir,
and Terry 2018).
Weakness: weak positioning strategy of the company is biggest weakness of the organization in
the external environment. As the premium clients feel like the company provides low quality
products and the economic clients feel like the company is irrationally charging high prices for
products because they want to attract premium clients in the environment.
Further, it should be noted that continuous price war present in the environment is another
weakness of the company, as it makes difficult for the organization to attain differentiation in the
environment.
Opportunities: The opportunities that Woolworths attain is that they gain the opportunity to
target greater segment in the market because high demand of economic retail goods in the
environment. The company targets a wider market segment that provides them opportunity to
offer a wide range of products in the market as well. Thus, in this way business can increase
revenue in the market (Jie, and Gengatharen 2019).
Further, the company also gains the opportunity to increase the satisfaction of clients by
providing them efficient online services in the market. The company should provide door to door
delivery of goods and pick up options so that the customers can easily attain products from
Woolworths in the environment.
Threats
The biggest threat for Woolworths is high degree of competition in the environment. Earlier, the
company had to compete only with Coles, but with the emergence of Aldi, the company has
started facing greater threat of reduction in sales of the business.
Secondly, increasing attention of people towards healthy goods in the environment has reduced
the sales of the packaged food products of the company. People have stopped buying soda or
chips due to which sales of the company has subsequently downgraded (Freebairn 2018).

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Conclusion
Thus, in the limelight of above mentioned events, the fact should be noted that the above
mentioned paper represented details about the Australian retail organization Woolworths. The
paper provides overview of the company along with the issues faced by them in the external
environment. The situational analysis clearly explains the facts about the internal and external
environment of the company. Further, given recommendations will surely help the organization
eliminate the challenges from the business grow effectively as well.
Recommendations
Below mentioned are the recommendations for the Woolworths to grow and compete efficiently:
Good Positioning Strategy: The company should effectively make use of a good positioning
strategy in the environment. Firstly it should be noted that the company does not identify and
create a position for the brand in the market, instead the customers place the company
considering the marketing activities and quality of the product. Thus, the business should firstly
differentiate between the lower and middle segment and upper segment of the company. Then
they should target the customers differently using different marketing techniques in the
environment. The company should create diverse advertising and promotion strategies in the
market so as to capture the interest of the customers differently.
Increment in Product Quality: The Company should focus on increasing the quality of products
that they services in the business environment. It should be noted that the company needs to rise
above competition present in the environment and it is only way through the business can attain
competence. As all the other strategies are followed by the competitors in the environment that
subsequently eliminate the competence of that strategy in the business.
As the only major issue faced by the company Woolworths is high degree of competition, so the
business should make use of market penetration as well as product development strategies to
reduce the level of competition. Market penetration will help the organization to serve to the
customers in better ways and increase their level of interest and product development strategy
will help the organization diversify the risk by producing different product in the market.

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References
Arli, V., Dylke, S., Burgess, R., Campus, R. and Soldo, E., 2013. Woolworths Australia and
Walmart US: Best practices in supply chain collaboration. Journal of Economics, Business &
Accountancy Ventura, 16(1).
Bailey, M., 2017. Absorptive Capacity, International Business Knowledge Transfer, and Local
Adaptation: Establishing Discount Department Stores in Australia. Australian Economic History
Review, 57(2), pp.194-216.
Biddle, I., 2016. The Wesfarmers/Woolworths duopoly war: The Bunnings vs. Masters battle.
Busidate, 24(3), p.3.
Chatterji, A.K. and Fabrizio, K.R., 2014. Using users: When does external knowledge enhance
corporate product innovation?. Strategic Management Journal, 35(10), pp.1427-1445.
Freebairn, J., 2018. Effects of supermarket monopsony pricing on agriculture. Australian Journal
of Agricultural and Resource Economics, 62(4), pp.548-562.
Jie, F. and Gengatharen, D., 2019. Australian food retail supply chain analysis. Business Process
Management Journal, 25(2), pp.271-287.
Lau, H., Nakandala, D. and Shum, P.K., 2018. A business process decision model for fresh-food
supplier evaluation. Business Process Management Journal, 24(3), pp.716-744.
Munir, R. and Terry, C., 2018. Accountants and the Ethics of Profit: The Case of the Australian
Retail Industry. Journal of business ethics education, 15, pp.327-348
Pulker, C.E., Trapp, G.S., Foulkes-Taylor, F., Scott, J.A. and Pollard, C.M., 2018. The extent
and nature of supermarket own brand foods in Australia: study protocol for describing the
contribution of selected products to the healthfulness of food environments. Nutrition
journal, 17(1), p.95.

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Woolworths., (2019) About Us [online]. Available from <
https://www.woolworthsgroup.com.au/page/about-us/> [Accessed on 22 August 2019].