Strategic Analysis Report: Woolworths Supermarkets (BUSM4188)

This report provides a strategic analysis of Woolworths Supermarkets, a leading Australian supermarket chain. It begins with a background overview of Woolworths, highlighting its market position and history. The core of the report involves a PESTLE analysis, examining the political, economic, social, technological, environmental, and legal factors impacting Woolworths' operations and strategic decisions within the Australian context. Furthermore, the report applies Porter's Five Forces framework to assess the competitive dynamics of the supermarket industry, evaluating customer and supplier bargaining power, the threat of new entrants and substitutes, and the level of competition. The analysis aims to provide insights into Woolworths' strategic challenges and opportunities, concluding with recommendations for future strategic actions. The report utilizes various sources, including Woolworths' official website and annual reports, to support its findings and conclusions.

Running Head: STRATEGIC MANAGEMENT 0
Strategic Management
(Student Name)

STRATEGIC MANAGEMENT 1
Table of Contents
Background of Woolworth..............................................................................................................2
PESTLE Analysis of Woolworth.....................................................................................................2
Porter Five Forces............................................................................................................................4
Conclusion.......................................................................................................................................4
References........................................................................................................................................6

STRATEGIC MANAGEMENT 2
Background of Woolworth
Woolworth is the leading company in the global market. The company reached a highpoint of
achievement as well as added an further quill to its cap by conscripting itself amongst the top 10
corporations of Australia. Woolworth is Australians based supermarket that is possessed the
Woolworth Limited. It was firstly introduced in the year 1924 in the city of Sydney Coles
(Woolworth, 2019). The main founder of the firm was Ernest Williams, Stanley Chatterton, as
well as Percy Christian. In recent, the company manages more than 140000 stores. The retail
business is also deliberated as the chief company in the country Australia. It is positioned in the
Brisbane city of Australia in Queensland. The corporation hires more than 1.2 million. It also has
further than approximately 3300 stores athwart in the country New Zealand and it retains
approximately 850 superstores in the country Australia alone. It majorly emphasis on meeting
the requirement of the consumers by bringing insignificant values as well as improved spending
proficiencies (Woolworth, 2019).
In the subsequent part, there will be a thorough examination of the external environment that
created a great impact on the company. It provided threats as well as an opportunity for the
company that enhances its chance to nurture in the viable market.
PESTLE Analysis of Woolworth
In edict to examine the external environment of Australia there are certain factors that will help
in studying the actual situation of the republic that affected the business to the certain extent as
they are explained in the below points:
Political Factor
The industry of retail in Australia is greatly affected owing to the circumstances of the political
situation. The Federal Government of Australia has launched a rivalry rule. In turn, it confines
the main self-governing supermarkets which include Coles as well as Woolworths to eliminate
rivalry. Such cumulative of supremacy in the market of such stores have also steamed into the
trivial traded harassed to accomplish in the business. Furthermore, the country has a stable
political environment as it has open, transparent as well as the efficient transparent legal

STRATEGIC MANAGEMENT 3
framework. The country has skilled, well-educated as well as a multilingual workforce with the
competitive cost of the base that provides a stable political environment of the country. It
delivers a new viewpoint to the Woolworth to nurture in such market more efficiently (Richards,
Kjærnes and Vik, 2016).
Economic Factor
The market condition of the country is falling down that affected the corporation to a definite
extent. The decline in the activity related to the economy in the Australia marketplace and New
Zealand exaggerated the whole recital of the corporation to a definite degree. Moreover, the
financial indicator of the republic which includes variation in the money exchange rates and
flagging of the Australia Dollar has disapprovingly affected the worldwide activities of the
company Woolworth. Therefore, it enhances the glassy of menace for the corporation to a
convinced scope. However, the economic progress degree of Australia is higher than other
OECD republics that also include the US and UK. The GDP growth rate of the country is 0.2%
that indicates the country will provide an opportunity to the Woolworth to a certain extent (Jie
and Gengatharen, 2019).
Social Factor
Such factor includes demographic pattern as well as the belief of individual, attributes, norms
and so on. The demographic aspect of Australia is continuously changing. The demand of the
consumers varies according to the technological changes. The people in Australia are keen on
their product as they want a wider range of product at a reasonable price that made them more
satisfied. It forces the Woolworth to control over its prices and offer a wider range of product at
a discounted price. It offers a panorama to the business to raise in such a competitive market in
an effective manner (Shauki, 2016).
Technological Factor
Australia is represented as one of the technical progressive nations in the international market.
Australia is mainly known for its new skills generation at sooner than numerous other advanced
republics. Australia is represented as the huge development in the technological over the years.
In the year 2018, the purchase of equipment was enhanced by approximately 4% which enhance

STRATEGIC MANAGEMENT 4
by $65 million in the year 2019. The people in Australia are updated through internet as the use
of the internet is high. It is analyzed that more than 85% of the population is using the internet
that represents the biggest growth of the country in the field of technology (Almerich et al.,
2016).
Environmental Factor
The country Australia is considered and recognize as the stunning and attractive republics in the
world. The country maintains high biodiversity. However, it faces certain challenges in meeting
the need of the environment due to the reason the changes in the climate occur. Therefore, the
government has taken initiative to protect its environment for which they have imposed new
rules on companies to protect the environment. It creates threat for the company as the company
need to follow the regulations that are imposed by the government and also enhance the
opportunity to aim the customers in the defensible way that will augment trust level amongst the
customers to the greater level (Fatima, Khan and Goh, 2016).
Legal
The Government of Australia has introduced tax on carbon athwart the republic that has
pretentious the retail business and also the Woolworth. The valuation of the corporation also
represents that the parameter by the Australian Competition, New Zealand Commerce
Commission as well as Consumer Commission has exaggerated the activities of the company.
Régime has also presented a fair-minded policy which is forcedly accepted by the company that
affected the cost of the corporation to a convinced level (Chileshe et al., 2016).
Porter Five Forces
Customer Bargaining Power: the superior amount of supermarket and other retail vittles are
obtainable in Australia that deliver and cover all the rudimentary need and requirement of the
consumer that enhance the bargain power of customers due to the reason the swapping rate is
also stumpy that provoke the customers to attract to the most discounted produce that is similarly
available in the market. Thus, such power enhances the pressure on Woolworth to deliver a
quality product at reasonable prices to its consumers (Grimmer, 2018).

STRATEGIC MANAGEMENT 5
Supplier Bargaining Power: the retail industry of Australia is represented as the highly
concentrated area and also makes sure that the larger companies concentrate on the mainstream
of the market share. It augments the bargain influence of the supplier to a convinced level.
Therefore, the bargaining influence of supplier or dealer is reasonable in such diligence that
delivers an chance to the corporation to control over its overall cost in an effective manner
(Schleper, Blome and Wuttke, 2017).
New Entrant Threat: the huge companies have already set up its image in the market that makes
tough for the newfangled corporations to entre in such retail industry. Furthermore, the
investment required in such industry is high due to the intention a enormous amount of product
need to be managed by the supermarket that repels the novel corporations to do so as it will
enhance the risk for the new companies to the certain extent. It represents that the menace of new
applicants is low for Woolworth that will enhance the whole profitability of the corporation to a
convinced level (Brannon, Hanlon and Miller, 2018).
The threat of Substitute: the company manages regular product that is the basic need of the
consumers. There are no substitutes that are available in such an industry. Thus, the menace of
new entrants in the retail industry is stumpy that offer a prospect to the corporation to target its
customers in a more effective manner (Cui et al., 2016).
Level of Competition: the retail industry in Australia contains high competition as some of the
limited companies cover maximum market in the county that exaggerated the whole profitability
of the Woolworth to a convinced range. The major competitors are Wesfarmers, Cole, as well as
Asda. They have to cover maximum market share and expanded its business at a greater level. It
increases the threat to the company to a certain extent (Bayne, Purchase and Tarca, 2019).
Conclusion
It can be concluded, from the above analysis, that the Woolworth is one of the famous
supermarkets in the international market that has expanded its business in most of the developed
country. The company has set up more than 1400 stores among which approximate 852 stores
are available in Australia only. The company is greatly affected by the external environment. The
stable political, as well as economic environment, offer a prospect to the corporation to nurture

STRATEGIC MANAGEMENT 6
in the market more efficiently as well as the technological situation delivers a prospect to the
corporation to develop on an innovative way. However, environment laws exaggerated the whole
cost of the corporation to a convinced degree. The industry of Australia is also an influential part
of the company. The high bargain power of consumers, as well as moderate bargain power of
supplier, enhances healthy completion in the market that affected the overall business to a certain
extent. Therefore, it is recommended that the company should adopt innovative marketing
strategy to target it consumes in an effective and efficient manner.

STRATEGIC MANAGEMENT 7
References
Almerich, G., Orellana, N., Suárez-Rodríguez, J. and Díaz-García, I. (2016) Teachers’
information and communication technology competences: A structural approach. Computers &
Education, 100, pp.110-125.
Bayne, L., Purchase, S. and Tarca, A. (2019) Power and environmental reporting-practice in
business networks. Accounting, Auditing & Accountability Journal, 32(2), pp.632-657.
Brannon, I., Hanlon, M. and Miller, E. (2018) Internet Sales Taxes and the Discriminatory
Burden on Remote Retailers–An Economic Analysis. Available at SSRN 3140948.
Chileshe, N., Rameezdeen, R., Hosseini, M.R., Lehmann, S. and Udeaja, C. (2016) Analysis of
reverse logistics implementation practices by South Australian construction
organisations. International Journal of Operations & Production Management, 36(3), pp.332-
356.
Cui, Q., Chiu, C.H., Dai, X. and Li, Z. (2016) Store brand introduction in a two-echelon logistics
system with a risk-averse retailer. Transportation Research Part E: Logistics and Transportation
Review, 90, pp.69-89.
Fatima, J.K., Khan, H.Z. and Goh, E. (2016) Environmental knowledge and behavioural
outcomes of tourism students in Australia: towards testing a range of mediation and moderated
mediation effects. Environmental Education Research, 22(5), pp.747-764.
Grimmer, L. (2018) The diminished stakeholder: Examining the relationship between suppliers
and supermarkets in the Australian grocery industry. Journal of Consumer Behaviour, 17(1),
pp.e13-e20.
Jie, F. and Gengatharen, D. (2019) Australian food retail supply chain analysis. Business Process
Management Journal, 25(2), pp.271-287.
Richards, C., Kjærnes, U. and Vik, J. (2016) Food security in welfare capitalism: Comparing
social entitlements to food in Australia and Norway. Journal of Rural Studies, 43, pp.61-70.

STRATEGIC MANAGEMENT 8
Schleper, M.C., Blome, C. and Wuttke, D.A. (2017) The dark side of buyer power: Supplier
exploitation and the role of ethical climates. Journal of Business Ethics, 140(1), pp.97-114.
Shauki, E. (2016) Is this a case of self-enlightened interest or genuine accountability: a study on
different reporting media in the Australian retail industry. Asia Pacific Journal of Accounting
and Finance, 2(1), pp.51-76.
Woolworth. (2019) About Us [Online]. Available from:
https://www.woolworthsgroup.com.au/page/about-us/our-brands/supermarkets/ [Accessed on
31/07/19]
Woolworth. (2019) Investor Information [Online]. Available from:
https://www.woolworthsgroup.com.au/page/investors/ [Accessed on 31/07/19]