Analysis of Woolworths' Self-Service Checkout System: A SWOT Report

This report presents a comprehensive SWOT analysis of Woolworths, an Australian supermarket chain, focusing on the implications of its Self-Service Checkout System. The analysis begins with a background of Woolworths, highlighting its market position and business operations. The report then delves into the company's strengths, such as market leadership and management of perceptions, and weaknesses, including thin profit margins and an easily copied business model. Opportunities, including focusing on customer experience and expansion into developing countries, are also explored. Finally, the report examines the threats faced by Woolworths, such as aggressive competition and security concerns. The analysis is supported by academic citations and aims to provide insights into Woolworths' strategic position and future prospects.

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Executive Summary
The report has thrown light in analyzing the SWOT analysis of Woolworths Company on the
basis of the new Self-Service Check out system which has been newly introduced by them. From
the analysis of the strengths, weaknesses, opportunities and threats, it has been known that the
company will be able to achieve higher level of profitability in the market which will be capable
of improving their growth operations in the competitive business environment. However, the
threat of security related issues are needed to be improved with the help of proper effectiveness.

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Table of Contents
Background of Woolworths.............................................................................................................2
Strength Analysis.............................................................................................................................2
Weakness Analysis..........................................................................................................................4
Opportunity Analysis.......................................................................................................................5
Threat Analysis................................................................................................................................6
References........................................................................................................................................8

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Background of Woolworths
Woolworths is the Australian chain of the supermarket along with grocery store which is
owned by Woolworths Group. The company was incorporated in the year 1924 and it is capable
of covering more than 80% of the Australian economy. Woolworths mainly specializes in the
groceries along with selling magazines and other health and beauty products. The number of
locations in which Woolworths have been serving in the current scenario includes 1024 and the
number of employees includes 100000 till the year 2019. Additionally, the company has been
capable of achieving the increase in the level of revenues which has amounted to Supermarkets
which is Australian $39.568 billion (Woolworths.com.au 2020).
During the recent times, Woolworths have been successful in adopting the new and
modern technique of technological advancements and they are able to satisfy the different needs
of the customers in the market in a positive manner. In the current scenario, Woolworths has
been trying to implement the Self- Service Check out System theft that will soon make it
impossible for the different shoppers in entering cheaper fruits along with veggies while
scanning fresh produce at the self-service checkout (The News Daily.com 2020).
Strength Analysis
Market Leadership- It is one of the major strengths of Woolworths for the
implementation of the Self- Service Check out System as it will be helpful for the shoppers in
performing the job of cashier themselves and there will be lack of theft related activities in an
appropriate manner. Woolworths have been covering more than 80% of the market share which

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helps them in serving the Australian economy and gain strong level of profitability (Wu et al.
2016).
Management of Perceptions- It is the second major strength of Woolworths Company
wherein it has led to the success of Woolworths. The company has been able to introduce the
Self- Service Check out System and it is done in the easy manner which will be suitable for
different group of individuals present in the market and it enhances the performance of the
company against the different other competitors present (Trigeorgis and Reuer 2017).
Perceived Usefulness- The Self- Service Check out System which will be newly
introduced by Woolworths will be beneficial in making the different customers attract towards
the company Woolworths. Through the implementation of the respective system at Woolworths,
it will be becoming the alternative to the traditional cashier-Staffed check-out (Rothaermel
2016). The customers will be attracted as in the respective system, the customers will be able to
perform the job of the cashier themselves in a successful manner through scanning along with
applying the payment for the different items which are purchased by them and without any kind
of difficulties or delay in the purchases made by them.
From the analysis of the strengths of Woolworths, it can be understood and analyzed that
such kind of Self- Service Check out System will be able to provide the competitive advantage
especially against the different smaller retailers who are present in the market in the competitive
business scenario and gain competitive advantage. Woolworths Supermarket will be able to
improve their position in the market through introducing the new Self- Service Check out System
that is the ultimate solution for them in competing against Tesco or Wal-Mart that are
performing the different kinds of activities in the market in a suitable manner.

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Weakness Analysis
Thin Margin of Profit- It is the first and foremost weakness of Woolworth’s Self-
Service Check out System as there are different other companies in Australia which have
invented the same already and after the introduction of the same, Woolworths can be incurring
losses or very less level of profitability or revenues that can be impacting their growth to a
certain extent in the next few years (Meyer, Neck and Meeks 2017).
Easily Copied Business Model of Woolworths- It is the other major weakness of
Woolworths wherein the business model which is maintained by them is simple and there is no
such competitive advantage over the other competitor companies. The firm does not have any
kind of competitive differentiators except for the business prices and size of the company
(Kukuh et al. 2019). In addition, the different other retailers are highly specialized in nature and
they have the upper hand in attracting quality-seeking buyers who have low sensitivity towards
the pricing of the different products and services which are being offered by them to the
customers in the market.
From the analysis of the weaknesses of the Woolworths Company, it is inferred that the
business model of the company is highly vulnerable in nature as there are already different other
competitors present in the market. After the introduction of the Self- Service Check out System
is highly effective, however, after the initial introduction of the same, the minimal time is highly
required and important for it to grow and become highly famous among the different customers
present in the market.

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Opportunity Analysis
Focusing on the Experience- It is the first and foremost opportunity for Woolworths to
provide to the different customers in the market. It is the duty of the every retail chain which
needs to offer especially to value segment. The overall opportunity mainly lies in able to provide
the different customers with the utmost comfortable experience while they are shopping
(Kellstrand et al. 2019). It is inclusive of the Self- Service Check out System, personalized
services along with artificial intelligence based shopping assistants which makes the company
grow along with making the customers highly satisfied with the different kinds of purchases
which are being made by them in a suitable manner.
Expansion in Developing Countries- It is the other major opportunity for Woolworths
which will be beneficial for them in expanding their business operations in the developing
countries. Through the introduction as well as implementation of the Self- Service Check out
System in Woolworths, it has been beneficial and possible for them in trying to compete with the
other small retailers or local retailers which are present in such countries (Hitt and Duane Ireland
2017). The Self- Service Check out System approach is completely technological advanced and
it is based on Artificial Intelligence and in developing countries, the approach will be completely
new which will be suitable for Woolworths in attracting large number of customers and improve
their efficiency level in the positive manner to gain competitiveness and improve their position in
the different developing nations successfully (Hill 2017).
Improvement in the Standards of the Quality- It is the other vital opportunity for
Woolworths after the implementation of the Self- Service Check out System in their company
and different branches in Australia and New Zealand. As to address the concerns of the different
customers in the market, Woolworth’s prospect of introducing the respective service will be

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helping the working individuals and the others who are having busy live schedules to shop at
their own convenience and they can be making the payments whenever they feel comfortable
even after a day or two from the mobile application or through the official website of
Woolworths (Gürel and Tat 2017).
From the analysis of the different opportunities of Self- Service Check out System at
Woolworths, it can be seen and analyzed that through the respective opportunities, Woolworths
will be having the capability to fight against the weaknesses and threats in a suitable manner
without much difficulty and improve their performance in the competitive business environment.
Threat Analysis
Aggressive Level of Competition- It is the first and vital threat for Woolworths due to the
Self- Service Check out System introduction in their company. It has been noticed that the
different supermarkets such as Tesco or Wal-mart have already introduced the respective system
of Self- Service Check out along with implemented the different other kinds of technological
advancements due to which it has been the huge threat for Woolworths in attracting large
number of customers (Ahmad et al. 2018). The competition can be reduced with the help of the
promoting the brand with the help of different social media advertisements or through sending
personalized emails to the customers for making them know regarding the uniqueness of the
service which has been introduced by them.
Lack of security- It is the other major threat for Woolworths after the introduction of the
Self- Service Check out System in their company. The main reason behind the same is that there
is requirement of the personal card details of the customers which can be creating the security
theft. It will be impacting the entire brand image of the company if any blunder happens and it is

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the ineffectiveness in the respective Self- Service Check out System which will be offered by
Woolworths to their customers. Moreover, there can be different customers who may not be
aware regarding the system and process and therefore, in such scenarios, there can be time
consuming approach involved in it. It can be creating trouble for the company as a whole and
impacts the performance of the company negatively and to a large extent as well (Ahmad et al.
2018).
Therefore, from the analysis of the threats of Woolworths, the main aspect which has
been found out is that the high level of competition can be creating high level of negative impact
on the performance of the company and the security breaches will be impacting the trust of
customers on the respective brand.

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References
Ahmad, N., Umar, R.R., Halim, I., Mohamed, M.S.S., Jamli, M.R., Baharudin, M.S. and Hamid,
M., 2018. Evaluation of Menu Hierarchy Display Types in Self-Checkout System: Effects on
Human Performance. Journal of Advanced Manufacturing Technology (JAMT), 12(1 (1)),
pp.371-382.
Gürel, E. and Tat, M., 2017. SWOT analysis: a theoretical review. Journal of International
Social Research, 10(51).
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function.
Macmillan International Higher Education.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, pp.45-63.
Kellstrand, M., Gopalakrishnan, S. and Carney, J., Catalina Marketing Corp, 2019. System and
method of initiating in-trip audits in a self-checkout system. U.S. Patent 10,387,817.
Kukuh, S.A., Ciptomulyono, U., Putra, N.I. and Suharyo, O.S., 2019. Navy ability development
strategy using SWOT analysis-interpretative structural modeling (ISM). Strategic
Management, 24(1), pp.30-40.
Meyer, G.D., Neck, H.M. and Meeks, M.D., 2017. The entrepreneurship‐strategic management
interface. Strategic entrepreneurship: Creating a new mindset, pp.17-44.
Rothaermel, F.T., 2016. Strategic management: concepts (Vol. 2). McGraw-Hill Education.

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The News Daily.com 2020 Woolworths trials new trolley-sized, self-serve system (Online)
Retrieved from https://thenewdaily.com.au/life/tech/2019/11/21/woolworths-self-serve-trolleys/
[Accessed on 10th April 2020]
Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management. Strategic
Management Journal, 38(1), pp.42-63.
Woolworths.com.au 2020 Woolworths Supermarket (Online) Retrieved from
https://www.woolworths.com.au [Accessed on 10th April 2020]
Wu, B.F., Tseng, W.J., Chen, Y.S., Yao, S.J. and Chang, P.J., 2016, July. An intelligent self-
checkout system for smart retail. In 2016 International Conference on System Science and
Engineering (ICSSE) (pp. 1-4). IEEE.