Strategic Management Analysis: Woolworth's Market Position and Forces

This report provides a comprehensive strategic analysis of Woolworth, a prominent player in the international retail market, particularly in Australia. The analysis begins with an introduction to Woolworth, its market share, and its financial performance. It then delves into a detailed PESTLE analysis, examining the political, economic, social, technological, environmental, and legal factors influencing the company's operations. Furthermore, the report applies Porter's Five Forces model to assess the competitive landscape, including the bargaining power of consumers and suppliers, threats of new entrants and substitutes, and the intensity of rivalry among existing competitors. The report concludes by summarizing the key findings and implications of the analysis, highlighting Woolworth's strengths, challenges, and strategic position within the industry. The report uses recent data to provide a current and relevant overview of the company's strategic standing.

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Strategic Management
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Table of Contents
Introduction......................................................................................................................................2
PESTLE Analysis............................................................................................................................2
Porter Five Forces Model................................................................................................................3
Conclusion.......................................................................................................................................4
References........................................................................................................................................5

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Introduction
Woolworth is one of the leading companies in the international market. It has biggest
supermarket chain in Australia as well as it is owed by Woolworth Limited. The company as
introduced in the year 1924 with the initial store that is opening in Sydney Imperial Arcade. The
business creates a duopoly marketplace in Australia along with its main rival Coles (Woolworth,
2019). The business has covered approximately 80% of the market share in the country
Australia. Woolworth belongs to the retail industry as well as comprise of more than 14, 0000
retail trades. More than 1.2 million people are employed by the company. It has opened
approximately 3300 stores athwart the country Australia and New Zealand as well as around 850
supermarkets in Australia alone. The financial situation analysis of the company revealed that the
company is under performing over the past years. It might me the attribute within the slide in the
first quarter sales (Woolworth, 2019).
In the following part there will be detailed exploration of the situation in which the corporation
drives that influence on the recital of the company.
PESTLE Analysis
Political Factor: the national government of the country Australia has newly introduced a
rivalry rule that prevent main self-governing rival which include Coles as well as Woolworth in
eradicating the rivalry. Such cumulative of supremacy in the market of such stores has stemmed
into trivial traded harassed to accomplish in the business. Therefore, the political condition of the
country affected the overall retail industry in Australia as well as the performance of the
Woolworth to a certain extent (Richards, Kjærnes and Vik, 2016).
Economic Factor: a failure in market condition of economic crossways the Australia has also
pretentious the recital of the Woolworth meaningfully. In the recent scenario, the decline in the
economic activity in the Australian market as well as News Zealand affected the performance of
the company. Furthermore, the financial indicator such as variation in the money exchange rates
as well as flagging of Australian Dollar has also unfavorably pretentious the Woolworth global
retail operations (Jie and Gengatharen, 2019).

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Social Factor: Such factor distressing the Australian retail industry in the sagacity that the
company operated athwart the Australia have to attain complex collective as well as municipal
growth due to the reason of modern communal tendencies within the consumers infers that they
mainly prefer highly socially responsible companies as well as they undertakes collective
enterprises. Therefore, the retails such as Woolworth created important influence over its
customers (Shauki, 2016).
Technological Factor: the country Australia is reflected as the furthermost technological
progressive republics worldwide. The country is famous for embracing novel skills at sooner
than numerous other advanced republics. The nation has also viewed a massive development in
the know-how over the eons. The purchase of equipment grows by 4% in the year 2018 to $63
billion and to $65 billion in the year 2019. The local companies in the country are also
capitalizing in skills to encounter the rising demand of its consumers. therefore, technological
factor also affecting he retail industry as well as the company Woolworths in specific is
important as such can be identifies from the datum that the company has deliberated the
presentation of green chilling equipment that help them to store the perishable produces for
longer period of time (Almerich et al., 2016).
Environmental Factor: Australia is considered as the attractive countries in the ecosphere with
attractive mountains, seashores as well as forests. The country is majorly recognized for its vivid
biodiversity. However, the country is facing some environmental challenges such as change in
the climate, thirstiest occupied landmass on globe and so on that forces the government of the
country to regulate new rules and regulation on companies to protect the environment. It has
been analyzed that the company Woolworths is particularly pretentious by the ecofriendly
influences in the sagacity that the wine-making as well as petrol business of the company are
posing adverse threats on the performance of the environment conditions that affected the
revenue and performance of the company to the certain extent (Fatima, Khan and Goh, 2016).
Legal Factor: the government of Australia has implemented carbon tax across the country that
has affected the retail industry as well as Woolworth specifically. The assessment of the
company represent that the parameter by the Australian Competition, Consumer Commission as
well as New Zealand Commerce Commission has pretentious the operation of Woolworth across

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the economy. The government has also introduced fair policy that forces the company to adopt.
It influences overall performance of the business to the certain extent (Chileshe et al., 2016).
Porter Five Forces Model
Bargaining power of consumers: the bargain control of consumers in related with the trade
industry of Australia is significantly high owing to the reason there are large number of
superstores as well as other retail stores that are available in the Australia that provide basic
product of necessity to the consumers. The switching cost of the company is also very low that
provide an option to the consumers to select in between the huge number of supermarket. The
bargain power of the consumers is significantly high in such industry to the certain extent.
Therefore, it increases pressure on Woolworths to provide its product and services at low price
that exaggerated whole profitability of the business to the definite degree (Grimmer, 2018).
Bargaining power of Suppliers: in order to analyze the retail industry in Australia it indicates
that it is high concentrated as well as they are sure large companies that gave concentrate overall
the majority of market share. Therefore such enhance the possibility of haggling control of
dealers to the convinced level as such it may be stared that the haggling power of dealers is
reasonable in such industry to the certain extent. It provide an opportunity to the company to
purchase the product at low price from the market more efficiently (Schleper, Blome and
Wuttke, 2017)
Threats of New Entrants: the risk of new entreats in such industry is low due to the main
reason the huge companies make made it tremendously problematic for the novel companies to
enter in the retail industry. Moreover, the invested for setting up the supper market is high as
comparison to the other industry. Therefore, due to high competition in the market among the
large retailers, it resists the new companies to enter in such industry. Therefore such decreases
the general risk of the new entrance into the business circumstances to the certain extent. It
relaxed the Woolworths to expand its business more efficiently and the competition is limit to
the certain companies (Brannon, Hanlon and Miller, 2018).
Threat of Substitute: the threat of substitute in such industry is low. The trade everyday
disposable product are extremely vital as well as their ingesting on regular basis is extremely

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essential. There are no substitutes that are obtainable to them as well as it representing that threat
of substitute in such industry is low. The consumers have to consumer the basic product s they
have no other choice. Therefore, the retail industry enjoy substitute free product in the retail
industry that enhance the change of achieving success in the market more efficiently and
effective. It made possible for Woolworths to target its consumers more efficiently and
effectively (Cui et al., 2016)
Rivalry amongst Prevailing companies: The risk of competition inside the Australian retail
business is meaningfully high due to the main reason that there are limited main contestants who
include Asda, Woolworth, Coles, and Wesfarmers that are contending in contradiction of each
other for the superior market share. Such companies are at big level that made them possible to
promote its product in more efficient manner. Therefore, such enhance the condition of
competition among such companies that affected their performance to the certain extent (Bayne,
Purchase and Tarca, 2019).
Conclusion
From the above analysis it can be concluded that Woolworth has expanded its business in an
efficient manner. The company led in the international market more efficiently. It is conceded as
one of the leading supermarket chain in the international market. Woolworths is the Australian
based company. In the recent scenario, the company aces huge losses due to the reason of some
changes occur in the political and economic environment. The currency rate of Australia fallen
down that affected the revenue of the business to the convinced extent. Moreover, the
management has introduced competition policy to control unhealthy competition. It affected the
income of the business at countless level. However, the technological advancement country
supports them to grow and retain in the market efficiently that made it possible for the company
to survive in an efficient manner. In order to analyze the retail industry of Australia, the
consumers have high arguing power that forces the company to control over its cost. Moreover,
the company has a high completion that enhances pressure among the company to come up with
new strategy in the market. However, the bargain power of suppliers is low as well as the threat
of substitute is also low that support the company to enhance its service more efficiently and
effectively.

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References
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Burden on Remote Retailers–An Economic Analysis. Available at SSRN 3140948.
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social entitlements to food in Australia and Norway. Journal of Rural Studies, 43, pp.61-70.

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Schleper, M.C., Blome, C. and Wuttke, D.A. (2017) The dark side of buyer power: Supplier
exploitation and the role of ethical climates. Journal of Business Ethics, 140(1), pp.97-114.
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Woolworth. (2019) About Us [Online]. Available from:
https://www.woolworthsgroup.com.au/page/about-us/our-brands/supermarkets/ [Accessed on
31/07/19]
Woolworth. (2019) Investor Information [Online]. Available from:
https://www.woolworthsgroup.com.au/page/investors/ [Accessed on 31/07/19]