An Analysis of Woolworths' Corporate Level Strategic Management

This report conducts a comprehensive analysis of Woolworths' corporate level strategies within the Australian retail market. It begins by identifying and understanding Woolworths' concentration and diversification strategies, particularly horizontal growth and conglomerate diversification. The report then critically evaluates Woolworths' current strategies, considering the competitive landscape and market saturation. Recommendations are made for incorporating stability and retrenchment strategies to enhance Woolworths' strategic position. The analysis highlights the importance of balancing new initiatives with existing operations to achieve a strategic advantage in the competitive Australian market. The report utilizes academic sources to support its findings and recommendations, providing a well-rounded overview of Woolworths' strategic management.

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Executive summary
Woolworths is considered to be one of the leading retail giant in the Australian retail market. The
corporate strategy of the organisation puts focus on the growth of the existing market and
diversification of the products and services that can foster a better practice for Woolworths to
gain strategic advantage in the highly competitive Australian market. However, the concentration
growth strategy does not seem enough for the organisation and as a result of that the situation for
Woolworths has been very difficult to maintain. Therefore, the stability strategy and the
retrenchment corporate level strategy are also recommended that will facilitate a good and
strategic help for Woolworths in the Australian market.

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Table of Contents
Introduction......................................................................................................................................3
Identification and understanding.....................................................................................................3
Concentration strategy.................................................................................................................3
Horizontal Growth strategy.....................................................................................................4
Conglomerate diversification strategy.....................................................................................4
Critical understanding and reflection...............................................................................................5
Evaluation of the current strategy................................................................................................5
Recommendation and justification..............................................................................................6
Stability strategy......................................................................................................................6
Retrenchment strategy.............................................................................................................6
Conclusion.......................................................................................................................................7
Reference.........................................................................................................................................8

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Introduction
In a competitive market, it is essential for the business organisations to opt for important
right strategies that will facilitate a strategic advantage for establishing strong business
sustainability. Those strategies are identified as the corporate level strategy that all the business
corporates are followed in terms of growth strategy, stability strategy and retrenchment (Galpin,
Whitttington & Bell, 2015). Those strategies are set by the top level management of an
organisation. In this regard, this research is going to evaluate the existing corporate level strategy
of Woolworths and intends to make recommendations that can meet the objectives of the
company.
Identification and understanding
There are several important corporate level strategies that the companies follow in a
general sense. However, for Woolworths, the company puts enormous focus on bits growth
strategy. In this regard, Woolworths strictly follows the growth strategy by increase its sales to a
great extent in order to survive in the Australian retail market effectively. There are two
significant strategy that have been followed by Woolworths such as the concentration strategy
and the diversification strategy.
Concentration strategy
As far as the concentration strategy is concerned, Adamides (2015) advocated that the
strategy is associated with the procuring opportunities for the business organisation to
concentrate on the product line and willing to increase the value chain of the product. It means, it
is the intention of the business organisation to provide more emphasis on the value of the product

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and attract customers to a great extent in order to increase its sales growth. The sales growth of
the organisation is highly depended on the process so that it will be effective for the business
organisation to facilitate an effective strategic advantage. Henceforth, the horizontal growth
strategy and the diversification strategy are highly relevant for the corporate level strategy of
Woolworths.
Horizontal Growth strategy
According to Cirillo (2019) the horizontal growth strategy is resembled with expanding
the operations of the company in a great extent into other geographical locations. Moreover,
Schmidt and Redler (2018) also identified that expanding the range of products is also identified
as an important aspect of the horizontal growth strategy where the existing customers will get
attracted effectively. Based on the annual report of Woolworths, it can be stated that there are
more than 3,000 Woolworths stores operated across around the world. The purpose of increasing
the number of stores help the organisation to bring more customers into the organisational fold.
In addition to this, key focus of Woolworths will be fixed on the customer satisfaction. As a
result of that it is important for the retail enterprise to increase its range of products from food
and drinks to hotels and hospitality industries. In fact, it is a very significant steps that the
company has been taken in the context of maximising its customers and increase the sales
growth steadily.
Conglomerate diversification strategy
From the research of Wadström (2019) it can be stated that the diversification strategy
emphasises on the alternative exposure for the business organisation to expand its market. It is a
common factor for the business organisations to look for new market entry due to the saturation
in the core market where the business company resides. In respect to this, the conglomerate

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diversification strategy of the organisation strictly focuses on diversifying the company by
involving in completely a new industry. Wulf and Butel (2016) opined that the purpose of
venturing into new market is associated with the practice of providing a better opportunity for
the company to expand its market effectively. Therefore, in case of Woolworths the new venture
in hotel business is definitely creates huge exposure and opportunity for the company to survive
in the competitive market. From the annual report of the organisation, it can be derived that in
the financial year of 2018, the company is trying to increase its venture in the hotel business. The
purpose is to gain strategic advantage in the competitive market of Australia.
Critical understanding and reflection
Evaluation of the current strategy
The current strategies of Woolworths are very pragmatic and relevant enough in the
context of the Australian retail sector. From the research of Jarzabkowski & Kaplan (2015) it can
be stated that the Australian retail sector is highly competitive among big retail companies apart
from Woolworths such as Coles and Aldi. As a result of that it becomes a problem for
Woolworths to gain more advantage from the market. Moreover, Afshar Jahanshahi, Nawaser
and Brem (2018) pointed out that the retail market of Australia is highly moved by lowering the
price of the products. For Woolworths, it is not possible to reduce the price to a great extent due
to its arch rivalry with Coles and Aldi. Besides this, it can also be an important aspect for the
existing retail companies in Australia to focus on the market condition because the retail market
of Australia is on the verge of saturation. As a result of that there is no further scope for the
business companies to expand their business by creating new retail stores. Henceforth, it is
obvious for Woolworths to penetrate into the different market for its own survival.

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However, there are other corporate level strategies that are also relevant in the context of
the Woolworths. For instance, it is also essential for Woolworths to put a great thrust on the
stability and retrenchment. Therefore, it is highly important for the organisation to consider the
importance of other two corporate level strategy.
Recommendation and justification
Stability strategy
According to de Waal and Maritz (2019) the stability strategy is highly designed to get
successful business operation in a reasonably predictable environment. The reason behind
choosing the stability strategy is that Woolworths is currently facing severe competitiveness
from the rival companies. Therefore, it is important for the organisation to implement a stability
strategy within the Australian retail market. The profit strategy will be effective in this regard.
With the help of this strategy, Woolworths can boost its value artificially. Therefore, moderate
cost cutting can be an effective mode to achieve the profit and gain enough financial value in the
market.
Retrenchment strategy
Hassard and Morris (2018) articulated that the retrenchment strategy is applicable when a
business enterprise is failed to gain enough market capitalisation. In other words, Aithal and
Aithal (2018) stated that the role of the retrenchment strategy is to improve the performance of
the company by eliminating the weak factors. Therefore, it is essential for Woolworths to follow
the turnaround strategy as it will bolster the operational efficiency of Woolworths so that
Woolworths can achieve strategic position in the Australian retail market. The purpose of the
turnaround retrenchment strategy is to ensure the efficacy of the operations of an organisation.

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Therefore, the strategy not only helps the organisation to find out the potential gaps but also
suggest a mitigation strategy for the company to resolve the threats or risks. Therefore, it will be
highly effective for Woolworths to follow the turnaround retrenchment strategy as the ultimate
one to formulate an effective organisational practice.
Conclusion
The above discussion is trying to project the existing corporate level strategy of
Woolworths and evaluate the strategies so that both the strengths and the weaknesses are being
found properly. The growth strategy that Woolworths follows has a number of advantages.
However, the strategy is not enough for Woolworths to settle down its business perfectly.
Therefore, using the stability and retrenchment strategies are also relevant for Woolworths to
safeguard its existing business. As a result of that it will help Woolworths to monitor and control
its existing business operations and at the same time penetrating into new market. Therefore, it
can be concluded that keeping a balance between the new initiative and the existing business
operation will provide a strategic advantage for Woolworths in the Australian competitive
market.

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Reference
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Hassard, J., & Morris, J. (2018). Contrived competition and manufactured uncertainty:
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