Strategic Management Report: Woolworths Group Analysis, Semester 2

This report provides a comprehensive strategic management analysis of Woolworths Group Limited, a major player in the Australian retail supermarket chain industry. The report begins with an introduction to the company and its industry, followed by a detailed market analysis utilizing SWOT, PESTLE, and Porter's Five Forces frameworks to assess the competitive landscape. It examines the company's strengths, weaknesses, opportunities, and threats, as well as the impact of political, economic, social, technological, legal, and environmental factors. The report then delves into strategic approaches, including Mintzberg's management roles and corporate-level strategies. Furthermore, the report discusses the development of capabilities to adapt to the changing business environment. Appendices provide supporting data, including situational analyses, PESTLE frameworks, and Porter's five forces analysis. The report concludes with a summary of key findings and recommendations for future strategic management of the company.

Running head: STRATEGIC MANAGEMENT
Strategic management
Name of student
Name of University
Author note

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Table of Contents
1. INTRODUCTION..............................................................................................................2
2. BACKGROUND INFORMATION OF THE ORGANISATION AND INDUSTRY......2
3. THE MARKET ANALYSIS..............................................................................................4
3.1 Situational analysis via SWOT.........................................................................................4
3.2 PESTLE............................................................................................................................5
3.3 External analysis Porter’s five forces framework............................................................7
4. STRATEGIC APPROACHES.........................................................................................10
4.1 Mintzberg management roles.........................................................................................10
4.2 Corporate level strategy..................................................................................................12
5. DEVELOPMENT OF CAPABILITIES FOR ADAPTING TO THE CHANGING
BUSINESS ENVIRONMENT.................................................................................................13
6. CONCLUSION.................................................................................................................14
Appendices...............................................................................................................................20
Appendix 1...........................................................................................................................20
Situational analysis done with the use of SWOT analysis framework.............................20
Appendix 2...........................................................................................................................22
Porter’s five forces framework.........................................................................................22
Appendix 3...........................................................................................................................24
PESTLE analysis framework for environmental analysis................................................24
Appendix 4...........................................................................................................................27
Mintzberg management roles............................................................................................27
Appendix 5...........................................................................................................................30
Marketing mix strategy.....................................................................................................30
Appendix 6...........................................................................................................................33
Marketing budget or expenses..........................................................................................33
Appendix 7...........................................................................................................................33
Implementation plan for the organisation.........................................................................33

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1. INTRODUCTION
The report presents us about an idea related to the strategic management considering
the business organisation named Woolworths Group Limited in Australia. The company has
been listed in the Australian Stock Exchange and the industry within which the company
operates has been the retail supermarket chain industry. With the management of various
business level and corporate level strategies, the company will be able to sustain in the
competitive business environment and at the same time, adapt to changes within the industry
as well as the business effectively too (Ansoff et al., 2018). The use of Porter’s five forces
framework can help to determine the competitiveness of the organisation as well as the
industry within which, the company operates, furthermore, ensure gaining superior
performance to develop new skills and capabilities within the concerned industry. Based on
the various management theories, it will be much easier and convenient for the organisation
to acquire distinctive features and make sue to implement the right strategy for improving
overall business performance in the future too.
2. BACKGROUND INFORMATION OF THE ORGANISATION AND
INDUSTRY
Fig: Woolworths leads in $100 billion grocery war

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(Source: Roymorgan.com, 2019)
The background information of the supermarket chain in Australia defines the major
retail based operations that are being managed at both Australia and New Zealand to generate
higher revenue and competitive advantage in business as well. Woolworths Group Limited is
one of the largest supermarket chains in Australia that has been specialised in the delivery of
good quality retail based products and services for meeting the needs and requirements of the
customers (David & David, 2013). The company operates within the retailing industry and
thus the major divisions include Woolworths Supermarket, Woolworths Finance, Hotels, etc.
The revenue of Woolworths Group Limited is A$55.669 billion and the operating income and
net income are A$2.326 billion and A$1.593 billion respectively.

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Fig: Australian annual retail sales growth by category
(Source: Businessinsider.com.au, 2019)
The Australian retail industry experiences rapid growth in the past few years, which
has been segmented according to the category of product, channels for distribution and
dynamics of market too. The country has a high per capita GDP, which has a great value and
it assures the retail company to possess enough working capital to manage its business
functioning appropriately. Considering the fact that Australia and America possess a strong
relationship, the culture is same and also there is common heritage, which has supported the
language and culture too (Hill et al., 2014). The Australian retail sector has experienced
growth in spite of the lower increase in wages along with the increase in housing debts. The
future of the Australian retail sector is dependent upon the forces of disruption, changing
behaviours of consumers and decision making patterns along with the involvement of global
businesses aiming to formulate new approaches to the retailing (Eden & Ackermann, 2013).
3. THE MARKET ANALYSIS
3.1 Situational analysis via SWOT
Considering the information presented in the appendix, the strengths of the company
include positive brand image and identity, extensive distribution networks, strong base of
suppliers and also large customer base (Salar & Salar, 2014). Good amount of return on
capital invested by the shareholders, which also ensures better flow of cash along with
improved business performance. The weaknesses are summarized as lack of expansion
scopes, high rate of attrition, poor forecasting of demands and lack of investments on
research and development (Rothaermel, 2013). The opportunities include effective revenue
streams along with lower cost of transportation of materials. The rate of inflation is quite low,
which assures that the company gains good numbers of scopes and opportunities for

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sustaining in the marketplace. The major threats have been posed with the emergence of new
entrants, substitute products and services and also due to the presence of competitive
rivalries. The environmental laws and policies affect production sometimes due to poor focus
on the management of sustainability (Lasserre, 2017).
3.2 PESTLE
According to the PESTLE analysis framework that has been presented in the
Appendix section, it is clearly understandable that there are multiple factors including the
political, economic, social, technological, legal and environmental factors that have
influenced the functioning of business. It could be seen that the business performance has
been affected by the political environment and at the same time, created various scopes and
opportunities for the business to sustain in the marketplace (Yadav & Sharma, 2014). The
influence of foreign investors or shareholders also can impact the political climate and enable
the company to manage trade relations properly though with the involvement of political
parties. Woolworths Group Limited has managed to strengthen relationships with the foreign
investors and trading partners with the help of maintaining political stability and this has
encouraged the company to try entering new markets (Khan & Sagar, 2015).
As stated in the Appendix section, there are various factors such as the rate of
unemployment, recession, which have created an impact on the business performance in
terms of lower sales and also decline in profit level. It was found that Woolworths Group
Limited experienced a major loss, because of which, the business operations and processes
were closed and this even led to many people losing jobs within quick time (Sarsby, 2016).
The company though has managed to continue its business operations ethically and with
proper focus on the employment growth opportunities and management of financial resources
to ensure that higher business performance is achieved and profit is attained, which
contributed to the growth in economy of the nation as well.

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The social factors highlighted the importance of adapting to the changing behaviours
of consumers, which are fulfilled by Woolworths Group Limited properly for establishing a
sense of trust and loyalty among them (Ho, 2014). The availability of wide range of products
and services along with managing the affordability of the products have created convenience
for the customers, thereby, induced social trends to promote healthy lifestyle choices and
consumption behaviours along with supporting people for good.
The technological factors have allowed the company to carry out research and
development activities while at the same time, managed supply chains, inventories and
networks all across the retail chain in Australia. For example, the self-service check out
managed by the organisation along with involvement of online platforms for marketing the
products and services have also raised the level of satisfaction among the customers, thereby,
helped in meeting the needs and preferences of the clients effectively too (E. Dobbs, 2014).
The legality of business has been maintained by aligning with the business policies
and principles along with fulfilment of legal obligations, laws, rules and regulations within
the retail industry, which contributed to the maintenance of quality standards and aligned
with the rules and regulations too. Woolworths Group Limited has also gained approval from
the Government and regulatory bodies, which helped in meeting the legal requirements and
ensured ethical business management.
The environmental factors are considered regarding the ecological impact created and
Woolworths Group Limited has prioritised on the reduction of carbon footprint along with
various sustainable campaigns aimed at recycling and management of natural resources too.
Woolworths, thus, Implement sustainable measures and practices for becoming socially
responsible and at the same time, contribute to the positive impact on the environment.

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3.3 External analysis Porter’s five forces framework
The competitiveness of the business within the retail industry is often influenced by
multiple forces including the threat of new entrants in the market threat of substitute products
and services, bargaining power of suppliers, buying power of the purchasers and threats of
competitive rivalries in business as well. Considering the analysis of these forces, it will be
much convenient and easier for the Woolworths Group Limited to ensure implementation of
strategies, furthermore, gain sustenance within the marketplace with much ease and
effectiveness (Dälken, 2014).
Fig: Position mapping of the retail brands in Australia
(Source: Thenewdaily.com.au, 2019)
The emergence of new entrants in the marketplace has often created pressure for the
business with the help of low pricing strategy and also through reduction of costs and
offering value propositions to the clients. It has been found that there are multiple new
entrants that have emerged within the Australian retail market, which can create barriers and
also affect the ability of the business to attain a competitive edge over its competitors. The

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company could innovate new products and services and design new approaches to market
those for ensuring that the customers get a proper reason to make purchase of the products
rather than trying out the new entrants available in the marketplace (Tanwar, 2013). The
economies of scale are built to lower the fixed cost per unit, while at the same time, invest on
research and development for managing innovation, furthermore, and maintain the high
standards along with generating more revenue within the industry as well. Thus, the threat of
new entrants is comparatively high for the business to survive within the retail industry.
There are threats caused due to the emergence of substitute products and services in
the marketplace, i.e., similar kinds of products and services available at some lower price,
which can enable the customers to switch on to some other brand from Woolworths Group
Limited. Though the new features added to the product or service are very negligible, still the
company needs to become service oriented rather than by just focusing on the management
and designing of the products, which could help in meeting the needs and preferences of the
customers effectively. The cost of switching for the consumer could be increased as well
(Schermerhorn Jr et al., 2019). The threat of these substitute products is moderate, because,
Woolworths has successful established a sense of brand trust and loyalty among the clients,
which has helped in making them remain aligned to the company rather than switch on to
some other brand any time.
As per the information provided in the appendix section, the bargaining power of the
suppliers holds special importance in terms of the force that has been put on the business
functioning as well as on the current industry within which the company operates. There are
multiple suppliers present within the industry from whom, the company has managed to
purchase the raw materials and resources to ensure that the manufacturing and production
processes are managed properly (Mintzberg, 2017). The suppliers are responsible for
affecting the margin of profit and they are also associated with the management of

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negotiations for gaining the most of the cost in terms of the supplies provided. From the
analysis of the Appendix representing these various forces, it could also be summarized the
company would be able to overcome this major threat, as it is quite lower and with the
development of effective supply chains. The company could also manage innovation by
implementing new designs to the products and services while at the same time, keep the trust
of suppliers to deliver better solutions whenever required (Laufer et al., 2015).
Based on the analysis of the threats, it could also be understood that the bargaining
power of purchasers is quite high and it is because their needs and requirements often change
from time to time, which make it difficult for the organisation to adapt to the changes within
quick time. The company should need to innovate its products and services consistently and
at the same time, offer discounts and additional offers to ensure that the bargaining power of
consumers is limited and their needs are satisfied effectively (Baker, 2014). The streamlining
of sales and production processes wold further allow the company to maintain a large
customer base and make sure to increase the level of profit, thereby, attain competitive
advantage in business as well.
The threats of rivalries are common in every industry, but it is moderate for
Woolworths as it has already made a good contribution to the market by fulfilling the wishes
and needs of customers effectively. Due to this, the customers have been well associated with
the brand because of the good quality products and services available at lower prices and
thus, they are not likely to switch on to, some other brand soon. Therefore, it is quite certain
that the company holds a good sustainable position within the competitive business
environment (Helm & Gritsch, 2014). Based on the appendix section, it is understood that the
various forces have influenced the competitiveness of the business and the industry within
which, it operates, which has helped Woolworths Group Limited in delivering superior
performance and attain the business goals and objectives with much ease and efficiency.

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4. STRATEGIC APPROACHES
4.1 Mintzberg management roles
It is understood that to implement effective strategies for sustaining in the future and
to gain the desired objectives perfectly, the business organisation needs to ensure that the
managerial roles are carried out properly and the workforce brings consistency in terms of
overall business performance and the revenue generated in business. Based on the diagram
presented in the Appendix section, the managerial roles introduced by Mintzberg are key
components that have been driven by situational as well as individual factors for the purpose
of managing effective interpersonal contacts, processing of information and for effective
decision making in business (Kumar, 2015).
Fig: Mintzberg management roles
(Source: Korica, Nicolini & Johnson, 2017)
The interpersonal contact is managed through effective communication between the
manager and the people working within the organisation as well as within the entire industry.
There are multiple individuals who are associated with the management of interpersonal
communication and this major role ensures inclusion of Figurehead, Leader and Liason. The
Mintzberg management roles have been stated as per the Appendix section, where the

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Figurehead has been the EO or manager of the company, i.e., Woolworths Group Limited,
who has been working as a role model to represent the business both internally as well as
externally in terms of formality, thereby, carry out the individual roles and responsibilities
along with fulfilment of the needs of employees working at the company (Ollila & Yström,
2017). The leader of the company could be the manager art different levels, who could keep
the staffs motivated and encouraged, furthermore, foster the development of a good working
environment and culture too. A Woolworths, the employees have been provided with training
and development sessions and programs for strengthening their skills, knowledge and
expertise. The liason here is the line manager, who acts as an intermediary between the
manager and employees and has mostly been associated with the maintenance of networks
internally and even ensured that the right messages and information are transferred from the
manager to the employees of the organisation (Ahearne et al., 2014).
Considering the role of management of information processing, there are individuals
who have been associated with the transfer, storage analysis and retrieval of information
among the managers and Board of Directors for effective decision making and improve the
overall business performance largely too. The role of monitor can be managed by the
manager of the organisation to collect information, both internal as well as external,
furthermore, analyse those information for identifying issues, and exploit opportunities and
implement changes for good (Simon, Fischbach & Schoder, 2014). As per stated in the
Appendix section, as a disseminator, the manager needs to transfer the information to the
employees while at the same time, being a spokesperson, the manager of Woolworths Group
Limited in Australia could also ensure communication with the business partners and external
parties about the corporate policies, principles and regulations. As part of the process of
decision making, based on the Appendix, it is clearly relatable that to facilitate the process of
decision making, the manager could work as an entrepreneur, who should initiate the change