MBA600: Strategic Analysis of Woolworths Limited Report

This report offers a comprehensive strategic review of Woolworths Limited, an Australian retail giant. It begins with an introduction and an overview of the company, followed by an analysis of its external environment using the PESTEL framework, examining political, economic, social, technological, environmental, and legal factors impacting the business. The internal environment is assessed through a SWOT analysis, identifying Woolworths' strengths, weaknesses, opportunities, and threats. The report then identifies and analyzes Woolworths' competitive advantages, exploring its longevity in the market, financial position, and market penetration. A diagnosis of the company's agility and ability to adapt to changes is undertaken, and the report concludes with a discussion on the sustainability of Woolworths' competitive advantages in the face of a dynamic retail landscape, emphasizing the need for agility to thrive in the future.

Analysis of
Woolworths limited

 Introduction
 Overview of Woolworths
 Analysis of external environment
 Analysis of internal environment
 Competitive advantages of Woolworth
 Diagnosis of the company
 Conclusion
 References
Table of Contents

 In the following slides a strategic review of an Australian
organization is performed
 The review of both internal and external environment has been
performed
 This has led to the identification of certain competitive
advantages
 Diagnosis of the strengths and weakness of the competitive
advantages is undertaken
 The long term sustainability of the competitive advantages is also
determined
Introduction

 Woolworths group was found in 1924 and is one of the largest
retailers in Australia
 The company operates 32402 stores across Australia and has
some of the most recognized brands (Woolworths, 2018)
 The company serves around 29 million customers in a week
 Woolworths is a committed business partner to thousands of
manufacturers, farmers and producers
 Some of its top brands are Big W, BWS, Woolworths, Dan Murphy’s
etc.
Overview

Overview

Overview

Analysis of External
environment
 PESTEL Analysis of Australia
Political-
 Parliamentary democracy operational under a constitutional
monarchy.
 Queen of Australia is Elizabeth 2
 Safe and stable political environment.
 Criticized over deportation laws, treatment of refugees, rights of
indigenous people etc (Cody and Nawaz, 2017).
Economic-
 1.248 trillion GDP at purchasing power parity makes it 19th largest
economy
 Follows an open market economy
 Member of G20, OPEC and WTO
 Has free trade agreements with Thailand, Korea, Japan, US, Malaysia
etc.

Analysis of External
environment
 PESTEL Analysis of Australia
Social-
 Australia has a aging population
 Australia has a small population size and low population growth
rate
 The life expectancy is large
 5.3% of country’s GDP is spent on education (CIA., 2019)
Technological-
 One of the few countries in the world that is very technologically
advanced
 Over the years there has been good growth in technology
 Local companies are investing in latest technologies to create
more design and innovation

Analysis of External
environment
 PESTEL Analysis of Australia
Environment-
 Smallest among the continents but 6th largest among countries
 The country is geographically diverse and is very beautiful
 Party to several agreements based on climate protection
 There are several environmental issue that the country faces
Legal-
 There are consumer laws, competition laws and fair trading laws
 High court is the final appellate court in the country
 Each state and territory has a separate supreme court
 Employment is governed by fair work act 2009

Analysis of External
environment
Retail industry in Australia
 It is expected that between 2019 and 2024 the retail sector would
grow at a CAGR of 4.6% (Mordor intelligence, 2019)
 The are major winds of disruptions blowing in the sector
(Mortimer, 2019)
 There are several challenges that are being faced by the retail
sector at present (Jacobs, 2018).
 The number of retail companies witnessing failures has seen an
increase (Jacobs, 2018)

Analysis of External
environment
PORTER’S 5 forces
Competitive Rivalry- High
Threat from new entrants- High
Threat from substitutes –High
Bargaining power of buyer- High
Bargaining power of supplier- low (Mitchell, 2019a)

Analysis of Internal
environment
SWOT Analysis
Strength
 There are two key players in the Australian retail space and one of
them is Woolworths
 Woolworths has good penetration in all segments of the society
 Their efficient pricing and promotion strategy has enabled them to
manage the perception of customers well
 The company exhibits high employee satisfaction
Weakness
 The company has a confused positioning strategy
 High price competition has forced it make losses
 The company is not agile enough to embrace change at a fast
pace