Woolworth Company Analysis: Strategic Decisions and IT Impact

This report provides a comprehensive analysis of Woolworth's strategic decisions, particularly concerning its IT/IS strategy. It examines key decisions made by the company, including the introduction of a restructured operating model and the associated challenges, such as employee redundancies an...Read More

RUNNING HEAD: Company analysis 1
Name of the student-
Title-Woolworth Company analysis
University name-

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Table of Contents
Introduction..........................................................................................................................3
Big decisions Woolworth in context with IT/IS strategy....................................................4
Major challenges Woolworths has been facing...................................................................4
Factors that led Woolworth to take such decisions.............................................................4
Use of Five porter forces model analysis............................................................................5
Balance of power.............................................................................................................5
Impact on IT strategy.......................................................................................................6
Pros and cons of strategic decision......................................................................................6
Role of IT in Woolworth.....................................................................................................6
Decisions of new management to write down the millions of investment in IT investment
.........................................................................................................................................................7
What I would do if I had been CIO of company.................................................................7
Major information system....................................................................................................7
Impact of slashed down project...........................................................................................8
Enlist of stakeholder with new IT system............................................................................8
Functional requirement for use IT operating system accompanied by cyber computing
system..............................................................................................................................................8
Conclusion...........................................................................................................................9
References..........................................................................................................................10

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Introduction
This report reflects the key strategic decisions taken by Woolworth Plc for enhancing and
growing business in domestic and international market. In addition to this, investment in
installation of major application information system has been discussed.

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Big decisions Woolworth in context with IT/IS strategy
It is observed that Brad Banducci has come up with business plan to introduce a
restructured operating model which will be adopted with a view to increase the efficiency and
productivity of organization. It is evaluated that if he will introduce a restructured operating
model then it will result to split the online business and more than 1000 workers will be indulged
in operating functioning of organization. However, if organization introduces a restructured
operating model then it will also increase the client satisfaction establish automation in
Woolworth’s value chain activities and strengthen the online business of company (Fernie, and
Sparks, 2014).
Major challenges Woolworths has been facing
The main challenge of Woolworth is related to redundancies of employee and
organizations which result to approximately cost of $35 million. In addition to this, with the
increasing ramification of economic changes and client’s inclination towards innovative and
creative technologies, company may face destruction in its existing business functioning.
Moreover, company might need to make restructuring of business which may cost around $766
million after tax in the group's FY2016 results. Additional problem of Woolworth is related to
uncertainty of business and an associated factor which may put negative impact on introduces a
restructured operating model (Fernie, and Sparks, 2014).
Factors that led Woolworth to take such decisions
With the ramified economic changes and stakeholders increasing need from the business
functioning of organization, Brad Banducci evaluated that company has been struggling with the
supplier relationship due to the issues of replenishment of performance and non-effective

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inventory system. In addition to this, company is also facing problem in implementation of new
software and claimed to have problem in improvement in performance (Norton, 2015)
Use of Five porter forces model analysis
Buyer’s power- It is evaluated that Woolworth has been selling its goods and services in
market and created international brand image around the globe. However, This may result to
buyer’s inclination towards other organizations such as Wesfarmers, Tesco and Morrison plc
(Nkirote, 2014).
Supplier’s strength- Company has planned to install restructured operating model in its
value chain activities which may integrate the business with the suppliers while determining the
strategic alliance with them. Therefore, after introducing restructured operating model suppliers
and vendors would be more inclined toward the business setting with this company.
Rivalry with other organizations- There are several other organizations such as
Wesfarmers, Tesco and Morrison plc who will be less inclined towards adopting this operating
model due to its high level of cost.
Threat of new entrants- Woolworth has faced restricting cost around $766 million after
tax in the group's FY2016 results while introducing new operating model in its value chain
activities. Therefore, it is very hard for other companies to bear the same level of cost for
installing new operating model in their value chain activities.
Substitution of product- There will be no substitute product and process which other
companies could adopt to make the business rivalry with Woolworth.
Balance of power
Company has been struggling with the supplier relationship due to the issues of
replenishment of performance and non-effective inventory system which may result to less

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effective products and services to clients. However, at the same time, buyers are more inclined
towards buying products offered by Woolworth. It has resulted to high level of balance of power
between purchase and supply of goods and services of Woolworth.
Impact on IT strategy
This will allow Woolworth to introduce new strategy in innovative way and systematic manner
and by using new operating system IT process; employees could make effective use of financial
and non-financial resources in effective manner
Pros and cons of strategic decision
Short term
Pros- Woolworth could trim its balance sheet by showing this amount as assets and.
Employees could also learn new process and adopted model through training process.
Cons- It will increase the overall cost of production and employees may showcase
redundancies towards adoption of operating system.
Long term
Pros- It would result to increased level of brand image and result to easy handling of
value chain activities of organization.
Cons- It may result to destruction of set objectives and goals due to ramified economic
growth and creative and innovative business functioning of rivals in market.
Role of IT in Woolworth
The main role of IT in Woolworth is related to establish proper level of communication
method. It would also reduce the complexity of business and lower down the overall cost of
organization.

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Decisions of new management to write down the millions of investment in IT
investment
It is highly appreciable that Brad Banducci has written down investment to adopt new IT
operating model. It will reduce the complexity of business and lower down the overall cost of
organization. There are several organizations such as GE capital, Wesfarmers and Coals who
have done the same to increase the overall productions and efficiency of company (Barrons,
2017).
What I would do if I had been CIO of company
I would have done the same which Brad Banducci has done in Woolworth with some
changes like reducing the cost of capital for installing the operating model. GE capital from
multi diversified business has adopted cyber computing operating system to reduce the
complexity of its business (Barrons, 2017).
However, in order to convince the top management regarding with the same, I would
have prepared proper level of power point presentation with all the pros and cons. It will help
them to gauge all the negative and positive points while installing new operating model.
In case, my idea would be rejected then, I will show them the practice example which
other companies are using to create core competency in their filed.
Major information system
Woolworth needs to adopt customized cyber computing system as its major information
system. This customized cyber computing system will help company to store, supply and
establish automation in data process system. It will also result to effective level of data mining
process (Wang and Tan, 2015).

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Impact of slashed down project
The major impact of slashed down project of IT in Woolworth would be that in short
term it will increase the overall cost of process functioning. In addition to this, company needs to
write off this amount from capital account to reduce the loss of its business.
Woolworth has strong financial condition and with the help of its reserve and collected
profit, company could bear the cost of newly IT operating system (Dos Santos Svensson, and
Padin, 2013.).
Enlist of stakeholder with new IT system
With the help of new operating system IT process, employees could communicate with
other employees and management department. Team could also use IT operating system
accompanied by cyber computing system to make effective strategic business decision. In
addition to this, top management and other shareholders could use IT operating system
accompanied by cyber computing system to assess the business functioning of company (Fernie,
and Sparks, 2014).
Functional requirement for use IT operating system accompanied by cyber
computing system
 Hiring of employees who will be accustomed to act as per the directions of IT line manager.
 Setting of standard value chain activities.
 Adaption of existing value chain activities as per the newly introduce IT operating system
accompanied by cyber computing system.

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Conclusion
In this report, decisions taken by top management and factors affecting strategic
decisions have been taken into consideration. If Woolworth installs this new IT operating system
then it will surely increase the overall efficiency and productivity of business in long run.

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References
Barrons, K.P. and McGinnis, T.C., 2017. Building Capability. Effective Talent Management
Strategies for Organizational Success, p.160.
Barrons, K.P., Expanding Training Possibilities: Flipping the Zone of Proximal Development
For Talent Management. In CONFERENCE PROCEEDINGS BY TRACK (p. 296).
Dos Santos, M.A., Svensson, G. and Padin, C., 2013. Indicators of sustainable business
practices: Woolworths in South Africa. Supply Chain Management: An International
Journal, 18(1), pp.104-108.
Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new
challenges in the retail supply chain. Kogan page publishers.
Nkirote, M., 2014. Marketing Strategies Adopted to Gain a Competitive Advantage by
Supermarkets in Kakamega Town, Kenya. International Journal of Business and Social
Research, 3(4), pp.78-85.
Norton, A.L., 2015. Enterprise resource planning II-A review of critical success
factors. International Journal of Computer Science and Information Security, 13(11), p.5.
Wang, W. and Tan, F.T.C., 2015. A Benefit Expectation Management Framework for Supply
Chain Management Systems. In Enterprise Systems. Strategic, Organizational, and
Technological Dimensions (pp. 247-270). Springer, Cham.

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