An Analysis of Strategic Dimensions: Woolworths Project Report

This project report provides an in-depth analysis of the strategic dimensions of Woolworths, an Australian retail giant. The report begins with an executive summary that highlights the importance of strategic management in achieving organizational goals. It then delves into Woolworths' generic business strategies, including cost leadership, differentiation, and focus strategies, and how these strategies contribute to its competitive advantage. The report also examines Woolworths' organizational culture, emphasizing its principles and its impact on employee engagement. Furthermore, the report explores the company's formal organizational structure and its implications for performance and productivity. The analysis includes an introduction to Woolworths, its history, products, and competitors. The report concludes by emphasizing the need for Woolworths to develop new strategies to enhance performance and achieve its goals. This project serves as a comprehensive study of Woolworths' strategic management practices.

Running Head: Strategic Management
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Strategic Management
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Executive Summary
Strategic management play an essential role for every organization in respect of
achieving their goals and increasing productivity and performance of the organization
effectively and efficiently because it is the process of planning, executing,
monitoring, assessing and analysing strategies which are necessary for achieving
the organization goals. There are various dimensions of strategic management as
generic business strategy, organization culture and organization structure. These all
dimensions help the company in managing their organization. Woolworths effectively
use these above dimensions for continuous growing their business and for achieiving
their goals and objectives. They use generic business strategy or competitive
strategy as cost leadership strategy, focus strategy and differentiation strategy to
gain competitive advantage and increase their performance as compare to other
supermarkets. Woolworths’s organization culture mainly based on the principal, it
helps in building strong employee engagement but they also reduce their
performance due to high price than its competitors. They follow divisional structure
within their organization, so it helps in increasing their performance and productivity
but it also has some disadvantages such as increase in cost and conflicts arises
among different divisions. So, Woolworths should develop new strategies which help
them in increasing their performance and achieving their goals.

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Table of Contents
Introduction...................................................................................................................3
Generic business strategy............................................................................................4
Organization Culture.....................................................................................................6
Formal Organization Structure.....................................................................................9
Conclusion..................................................................................................................11
References.................................................................................................................13

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Introduction
Woolworths is an Australian company which is engaged in retailing and the
second largest company in Australia on the basis of revenue and founded in 1924 in
Sydney. Percy Christmas is the first CEO of Woolworths. He stated that “Every man,
woman and child needs a handy place where good things are cheap”. It has many
products such as food, liquor, petrol, general merchandise, home improvement and
hotels. These include Australia food segment and New Zealand food segment. The
Australian food segment deals in procurement and resale of food segment to the
customers in Australia. It operates 1008 supermarkets. The New Zealand food
segment deals in procurement and resale of foods and deals in New Zealand. It
operates 181 supermarkets. Woolworth’s employees are more than 2015000 and
more than 3000 stores in Australia and New Zealand. Its competitors are The Best
Things, Avenue and ASMC Industrial (About US, 2019). Company has achieved
higher level of growth and development and strategy of the company play an
important role in contributing the growth of the organization. They work directly with
the Australian cultivators and the farmers, so that they can supply best products to
their customers (Keith, 2012).
Strategic management is the process of planning, executing, monitoring,
assessing and analysing the strategies which are necessary for achieving the goals
and objectives of the organization. It includes decisions and actions which help the
organization to survive in long run. Strategic management decides the future of the
company through determining the productivity and performance of the company
(Hubbard, Rice, & Galvin, 2014). Company must have a knowledge and analysis of
general and competitive environment of the organization; they should analysis their
performance through SWOT analysis, PESTEL analysis and porter’s five forces
models. So, this analysis helps the organization in taking right decisions, minimising
their weakness and threats, enhancing their productivity and performance and
achieving their goals and objectives. Woolworths sources 97 per cent of their
products as fruits, vegetables and meat from farmers and cultivators in Australia.
They also sell their products through e-commerce websites and through their app
which is known as Woolworth’s supermarket app, so that customers can easily buy
that products and it also helps in saving the time and cost of the customers

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(Hattersley, Isaacs, & Burch, 2013). There are various dimensions of strategic
management such as business strategy, skills and talent of their members,
organization culture, organization structure and technology. The report consists of
dimensions of Woolworths as business strategy, organization culture and formal
structure of the organization.
Generic business strategy
Business strategy refers to the firm’s planning in respect to achieiving its
vision, mission, objectives, competing successfully and optimizing or enhancing the
financial performance with organization’s business model. Business strategy of any
organization help to provide products and services at lower prices with high quality,
increase their productivity and performance, greater innovation as well as provides
more compelling offers to the customers, enhancing their sales with customer
satisfaction and achieving the goals and objectives of the organization (Moon, 2010).
Generic business level strategies guide the actions which are taken by the company
in different line of their business; this strategy of business describes who the
organization will serve, what products and services company will serve to the
customers and how they can serve that products and services (Kluyver, 2010).
There are mainly three generic business strategies as focus strategy, cost leadership
and differentiation strategy, so these above strategies helps the business in gaining
competitive advantages and achieving their objectives and goals. Apart from these
above generic business strategies there are also other strategies such as pricing
strategy, promotion strategy, leadership strategy and other related strategies which
can help the business in achieving their goals (Belton, 2017). Generic business level
strategies helps the company to ensure that resources which are used by their
entities effectively and efficiently for enhancing the performance of the organization.
Business strategy of Woolworth is important tool which are used by the company to
increasing their growth, productivity, performance of employees as well as
organization and achieiving their goals. Company directly deal with Australian
cultivator and farmers, so this helps the company to provide fresh and best products
to their customers (Nandakumar, Ghobadian, & Regan, 2010).

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Woolworth’s generic business strategy
1. Cost leadership strategy – In this type of generic business strategy, company
sets plan to or made strategy to become low cost producer than its
competitors or in its industry. The sources of cost advantage depend on the
structure of the company. Various factors which affect the cost advantage of
any company such as economies of scale, raw material, technology and other
related factors. Woolworths has engaged in price wars with their competitors
and it is the second largest retailer in the grocery industry in Australia. The
company is the market leader in Australia and controls a large chain of
supermarkets which results in increases its purchasing power, so it force to
the company to lower its prices of the products from the suppliers (Mules,
2011). But prices of Woolworth’s competitors are lower as Aldi supermarket
had grown to 12.1 per cent in 2016 because of lower prices of the products as
compare to Woolworths. The company will implement various strategy in next
years to offer products and services at lower prices than its competitors and to
gain competitive advantage through cost leadership strategy such as
launching a number of new team which will be specialized and helps in
increasing the performance and productivity of the organization, transforming
Australian and New Zealand food, so it contributes to the growth of the
organization and launched more stores as compare to Coles, more stores
means greater convenience, so it will help the company increasing volume of
their products and services which allows the company to reduce prices of their
products due to higher turnover of sale and higher productivity and
performance of the organization (Our Approach: Stratgey and Objectives,
2018).
2. Differentiation strategy – In this type of generic business strategy, company
sets strategy which helps in making differ from their competitors, gaining
competitive advantages and enhancing the performance and productivity of
organization than its competitors. Company seeks to be unique than its
competitors in its industry. Woolworths directly work with the Australian
cultivators and the farmers, so that they could supply best as well as fresh

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products or services to their customers. They will adopt strategy related to
their products as they offer products and services to their customers through
freshness, quality, flavour and innovation. The company provide edited range
of needed and most wanted products and inspiring meal solutions for every
shopping occasion. Company differentiate itself from its competitors on quality
fashion through segmenting its customers as per geographic, demographic as
age, gender, firm graphic, behavioural and psychographic segmentation;
innovative strategies (Our Strategy, 2018). Company engaged various
software which will help the customer in online shopping through company’s
website and there are also facility of the virtual stores through mobile apps
and perfect door to door delivery option of their products and services to the
customers, so it will help the company in gaining competitive advantages than
its competitors and increasing their productivity and performance.
3. Focus strategy – In this type of generic business strategy, company focuses
on various elements which help the company in gaining their competitive
advantages. Focus strategy has two variants, one is cost focus and other one
is differentiation focus. Cost focus a company seeks cost advantages in
company’s target segment but differentiation focus a company seeks
differentiation in its target segment towards their customers. Woolworths
adopted focus strategy in some of the operation of the company. So, focus
strategy is for instance evident in various activities such as integration of sushi
bars, MSA beef and lamb, fish, bag and bake, and these products are target
to the specified customers (Strategy and objective, 2012). Company will focus
on utilization of data and information, innovation of new products, provide
better services to their customers and value for their money and time. They
focus on customer centric approach, so it will help the company in increasing
their customers and performance, sale and productivity through customer
satisfaction (How Woolworths is winning over consumers, 2018).
Organization Culture
Organization culture is another dimension of strategic management and it is
important for every organization to create effective environment within organization
for enhancing their performance and productivity and achieiving their goals and

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objectives. Organization culture defines the value, traditions and habits which
influence behaviour of the workers. Company encourage employees or individuals
learning by their culture at organization. It helps or supports operational efficiency to
maximize their productivity. It helps in lifelong learning for the individual employee of
organization. So, learning helps in promoting the productivity, performance, quality
and effectiveness of the employees towards organization. Organization culture plays
an essential role in growing their business and achieving their goals because culture
of the organization controls the behaviour of their employees and increase their
performance and productivity towards the organization (Alvesson, 2012). It can be
classified into two different categories, one is dimensions approach and other one is
interrelated structure approach. So, dimensions approach of strategic management
relate to organization culture for quantitative research. It can also help the company
to gain competitive advantages. It is a complex phenomenon and formed in various
ways. Members who are working in the organization play an important role in forming
the culture of their organization. It dictates or describes how people and teams
interact or communicate and behave in the micro as well as macro environment of
the organization. Organization must have positive or strong culture for increasing
their growth and to survive their business in long run. Knowledge culture helps the
organization to deals with external environment of the company. It is hard to change
because it requires efforts, time and dedication of their employees as well as the
organization (Bitsani, 2013).
The organization culture of the Woolworths is based on specific principles
which help to establish the pillar of success in the company. The organization culture
of the company is mainly based on the principle of building strong and enhancing
employee engagement. This principle is to ensure that employees are encouraged to
increase their performance towards the organization. Organization culture of
Woolworths can also be describes through their leadership structure. Their
leadership is based on the ethical value. Role which is played by the culture of the
organization are very important for the performance and the success of the business.
Company plan their strategies as per their employees as well as customers. They
are putting their employees first. Company create positive relations with its partners
as while work with their partners, they are governed by fairness, collaboration and
source locally and so it helps the company in building trust with their partners and

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their suppliers. They are also building effective relationship with small suppliers too.
They give freedom to their employees to share their ideas and views in decisions
making process or while taking any decisions related to the organization goals and
objectives (Our approach: How we do business, 2018). They try to improve
relationship with suppliers and other members of the organization and regain trust of
their customers because in 2017, performance of the company decline when they
lost trust of the customers and also decreases their market share after rising in the
prices of their products as compare to other retailers. There is lack of trust and
collaboration with other supermarkets. So, Woolworths has taken management
change, significant change in the buying group and develop new strategies of
understanding needs of the customers and work with suppliers rather than against
with them. It will help the company in creating effective environment. Company also
was building a listening culture as per this, customers, employees and suppliers
scorecards known as voice of customers. So, voice of team and suppliers have been
built into incentives of their employees (Mitchell, 2017).
Woolworths build strong employee engagement through various strategies
towards their employees. They are creating effective relations with their employees
and taking feedback from them and try to solve their conflicts or any relate issues
regarding their jobs. So, according to the survey of supermarkets which is released
by Deutsche Bank, Woolworths become higher in terms of rating from the customers
on various metrics such as quality of products, loyalty, value and availability of stock.
So, company continue improve its market share because of creating or maintaining
effective working culture within organization as compared to other supermarkets.
They are treating equally to all employees. Company develop Economic
Empowerment Employee Share Ownership Schemes in 2007, the aim of this
scheme is to provide dividend and pay-out benefits to their employees (Woolworths
helps business culture evolve, 2014). They also follow incentives based method of
motivation, so it helps to encourage and motivate them and also helps the company
in building strong employee engagement. Company also conduct regular meeting
and face to face communication sessions for solving their issue and creating positive
relationship with them. Leadership style or structure is also play an important role in
creating effective culture of the organization. Company follow democratic style of
leadership. As per this style, they allow to their employees to share their views or

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ideas in decision making process or any related decisions with their jobs. So,
leadership style which is follow by company also helps in creating effective
environment within organization. Company follow hierarchical structure of leadership,
so leader gives freedom to their team members to share their view and ideas and
leader also share all information with their team members. So, company’s
organization culture affects the productivity and performance of the organization.
Therefore, Woolworths try to improve their culture with various new strategies for
increasing their performance and achieving their goals (Marttila, 2018).
Formal Organization Structure
Organization structure is another dimension of strategic management and it is
an important tool for every organization for achieving the goals and objectives and
increasing their performance and productivity. It is very important for every
organization to create effective organization structure to survive in long run and to
grow continuously in long run. Organization structure is a way through which various
activities are directed for achieving the goals of the organization (Ashkenas, Ulrich,
Kerr, & Jick, 2015). Activities which are related to organization structure include
rules, responsibilities and roles which have to play by both manger and employees
within organization. It also determines how information flows from one level to
another level of management. There are two types of organizational structure, one is
formal organizational structure and other one is informal organization structure.
Formal organization structure refers as structure which is follow by the organization
formally. It describes relationship between different jobs and relationship between
different departments within organization (Gurianova & Mechtcheriakova, 2015). This
is formulated as per the objectives of the organization and its business strategy.
Organization structure is two types one is centralized organization structure and
other one is decentralized organization structure. In centralized organization
structure, all decisions are taken by the top management and they have all powers
and there is no involvement of middle and lower level of management in decision
making process. But in decentralized organization structure, all levels of
management involved in decision making process and power is also distributes
among different levels of management within the organization. Organization
structure help in providing guidelines to their employees such as how they could

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perform better and how they proceed further to increase their performance, resolving
discrimination among employees, helps in binding the members of the organization
and control the resources which are used by the company in order to achieve their
goals and objectives (Tran & Tian, 2013).
There are four types of the organization structure such as administrative
structure, functional structure, division structure and matrix structure. Administrative
structure includes a specific level of regularization. Functional organization structure
includes various undertakings such as supervision, management, direction and
allocation of responsibilities. In other words, functional organization structure is a
structure which is basis on the various functions of the organization such as finance,
HR, operation, marketing and other related functions (Ravanfar, 2015). Divisional
organization structure is as structure in which organization divides its members in
different groups and it is also called product structure of the organization. Matrix
organization structure is a structure which is combination of both functional as well
as divisional structure of the organization. It includes complex rules, roles and
responsibilities of their members within the organization (Benzer, Charns, Hamdan,
& Afable, 2016). Woolworths uses divisional organization structure which is common
approach of decentralized structure of the organization. Company divide their
members in three different groups, first one on the basis of products and services on
which organization as well as their members work, second one is on the basis of
geographical location as per functions such as HR, finance, marketing and operation
and last one is on the basis of sets or groups of the customers company serve their
products and services. So, this structure of the organization allow employees to
focus on particular product or service, effective utilization of resources, effective
culture of the organization, higher morale of employees, creating self- sufficient for
every division, increasing productivity and performance of their employees and
achieiving their goals and objectives. But division organization structure also affect
negatively to the cost of the company because each division require resources to
achieiving their specific objectives and this result as too much autonomy among
different division (Organzitaion Structure, 2015).
Since, Woolworths started its business they follow simple structure which is
known as Woolworths Stupendous Bargain Basement. However, due to continuous

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increasing their performance and growth, the company grew to become chain of their
stores across whole world (How we were Founded, 2016). With the following of
divisional structure on the basis of their products such as liquor, furniture, hotels,
electronics, home wares, clothing items and financial services, company continue
grew their business and achieve their objectives by improving their performance,
productivity, culture and structure of the organization. So, division structure provides
to the organization flexibility, adaptability and speed to mitigate and face the dynamic
or changing culture or environment of the organization (Schreyogg & Sydow, 2010).
Company develop good business journey approach which is consistent in managing
various issues related to sustainability across stores located at globally. This
programme mainly focuses to maintain sustainability in the organization and in
various groups or divisions of the organization. So, this programmes related to
sustainability within groups and organization helps in creating effective organization
structure and culture of the organization, so it will help the company in creating good
relationship with their employees, increasing their performance and productivity,
resolving their conflicts, improving satisfaction of both employees as well as their
customers, improving employee engagement and so it will automatically help in
achieiving the common goals of the organization. But company also has some
linkages of the organization structure dimensions of strategic management such as
conflicts arises sometimes among different divisions and duplicity of effectors in
terms of various functions such as finance, HR, marketing, communication and
operation. So, structure of the company has impact on the decisions and
communication strategies of the organization. Effective structure helps in taking
better decisions and effective communication with their employees and customers.
(HOW TO BUILD A MORE SUSTAINABLE BUSINESS, 2015)
Conclusion
Hence, strategic management play an important role for every organization to
grow in long run and achieiving their goals and objectives because it is a process of
planning, executing, monitoring, assessing and analysing the strategies which are
essential for achieving the goals and objectives of the organization. It decides the
future of any company by determining performance and productivity of the company.
There are various dimensions of strategic management which help the organization

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in achieving their goals and objectives such as generic business strategy,
organization culture and structure of the organization. Woolworths uses these
dimensions in a proper way for increasing their performance and achieving their
common goal. Company uses various business strategies such as cost leadership
strategy, differentiation strategy and focus strategy, so these above strategy of
Woolworths helps in gaining competitive advantages and increasing their
performance as compare to other supermarkets. Company try to set plan for
lowering their prices as compare to their competitors, try to differ their products than
its competitors and focus on various innovative strategies which help them in
achieiving their goals. They adopt various pricing strategies for lowering their prices
and affordable prices at which customers can easily buy their products. But in 2016,
company’s performance was lower than its closest competitor as Aldi supermarket
due to their lower prices than Woolworths. So, company should adopt or develop
various innovative strategies which help them in lowering their prices and increasing
their performance and productivity than their competitors.
Organization culture of Woolworths is based on the specific principles such as
building strong employee engagement and creating effective leadership structure, so
it help the company in creating positive relationship with their employees, increasing
performance and productivity of both employees and organization and achieiving
organizational goals and objectives efficiently and effectively. But in 2016, company
decreasing their market share and performance than its competitors because they
lose customer trust and lack of collaboration with other supermarkets and suppliers.
So, company should improve relationship with suppliers as well as other
supermarkets though developing new strategies and changing the culture of the
organization. Woolworths follow decentralized organization structure, as per this
structure they give freedom to their employees to share their idea and views related
to any decisions which is taken for achieiving the common goal of the organization.
They use divisional organization structure for surviving in long run and to grow
continuously. It helps the organization in effective communication structure with their
employees as well as their customers and also helps in taking better decisions
related to the goals of the organization. But it also results in rising conflicts among
different divisions and increasing their cost. So, company should try to improve their

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organization structure for reducing their cost, enhancing their performance and
achieving their goals.
References
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