Business Environment Analysis of Woolworth Retail in Australia

This report provides an analysis of Woolworth's business environment, focusing on the influence of external factors and market structure on the retail giant's performance. The report examines the impact of consumer behavior, including social, cultural, psychological, and age-related factors, on Woolworth's operations and marketing strategies. It highlights how Woolworth adapts to diverse consumer preferences and motivations. Furthermore, the report explores Woolworth's economic environment, particularly its position in the Australian retail market as a dominant player within an oligopoly, and its competitive advantages. The analysis covers Woolworth's ability to manage pricing, control industry entry, and leverage dependence strategies to maintain its leading position. The report concludes by emphasizing the importance of understanding the external business environment and market dynamics for effective strategic planning and sustained success in the retail sector.

Running head: BUSINESS ENVIRONMENT 1
Business Environment
Student by (Name)
Institution

BUSINESS ENVIRONMENT 2
Executive summary
The retail industry in Australia has been changing over the past years as a result of
influence from external business environment. Based on this fact, my choice organization is
Woolworth retails which has changed much over the time as a result of consumer behavior as
one of the major factors within the external business environment. Woolworth supermarket is
one of major retail operators in Australia in has been doing well based on the organizations
ability to formulate marketing strategies in relation to their consumer behavior. The performance
of and organization therefore depends on the organization’s ability to formulate their marketing
strategies based on the market structure and external business environment.
Table of Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................3
1.0 Effect of consumer behavior on Woolworth.............................................................................3
1.1 Social and cultural behavior...................................................................................................3
1.2 Psychological behavior..........................................................................................................3
1.3 Age of consumers...................................................................................................................4
2.0 Woolworth’s economic environment........................................................................................4
Conclusion.......................................................................................................................................5
Reference.........................................................................................................................................6

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Introduction
According to various sources, for any business organization such Woolworth to
effectively sell their products and remain at the top of an industry, the organization must and
should have a better understanding of their consumers behavior (Knox, 2016). Consumers’
ability to purchase a given product is driven by age, social life, culture as well as psychological
factors. The content of this paper therefore discusses the influence of external business
environment forces and market structure on Woolworth as an entity.
1.0 Effect of consumer behavior on Woolworth
1.1 Social and cultural behavior
Woolworth as entity operate in a business environment which is composed on buyers
with different backgrounds thus different cultures. The organization with regards to the cultural
composition of the market stocks food staff and groceries with regards to the diverse cultures in
Australia. Some of the consumers do not consume some of the products based on their culture.
The business based on the cultural diversity stocks varied types of food consumed by all their
consumers and this has helped the organization to stand on top of other firms (Knox, 2016). Most
of the consumers in the world today make purchases based on cultural trends and this affects
organization which cannot keep up with trends such as Woolworth.
1.2 Psychological behavior
The ability of consumers in a given market to develop a purchasing behavior is
influenced by motivation which is a psychological factor. When a brand is negatively perceived
by consumers’ sales of such a product will be low (Pailwar, 2011). Woolworth being a large
entity in a retail market have developed their sales strategies based on the consumers’
motivation, perception on various brands stocked by the organization as well as in relation to

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consumers’ attitude and believes. Woolworth rebrands various products according to the
consumer psychological behavior even though this is a difficult facto to determine.
1.3 Age of consumers
The organization provide goods which are consumable to all aged consumers within
Australia market. Purchasing ability of any consumer may also a rise as a result of the age of the
consumer. Even though Woolworth stocks goods which can be purchased by consumers of any
age, the organization sell mostly products purchased by adults and low age children. This is
because the organization is able to sell more of children staffs and adult staffs (Pailwar, 2011).
2.0 Woolworth’s economic environment
Woolworth retails as stated is one of the largest retail firms in Australia, the organization
together with Coles forms an oligopoly which is currently is mostly a duopoly. The two firms
forms an average of 80% of the total retail industry (Knox, 2015). Woolworth as an organization
being a firm in oligopoly type of market structure remains at the top based on its competitive
advantages. The ability of the organization to control the entry of other firms is one of the factors
which have resulted to its top position in the industry (Carraro, Katsoulacos & Xepapadeas,
2016). Woolworth as an organization is able to use price mechanism to scare its close
competitor Coles as well as to scare other firms trying to join the industry away. Woolworth is
also able to exploit the dependence strategy with Coles to control the industry. The organization
also uses the ability to control the agricultural production which forms the largest part of raw
material for retail industry to its advantage thereby remaining top retailer within the industry.

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Conclusion
As discussed above the ability of the organization to remain one of the top performing
firms in an industry depends on the external business environment as well as the market
structure. Woolworth’s operations is most influenced by various external forces and the nature of
the market it operates as discussed above. For any organization to thrive in a competitive
environment, the management should be able to formulate marketing strategies in relation to
consumer behavior.

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Reference
Knox, M. (2015). Supermarket monsters: The price of Coles and Woolworths'
dominance.
Carraro, C., Katsoulacos, Y., & Xepapadeas, A. (2016). Environmental Policy and
Market Structure. Dordrecht: Springer Netherlands.
Pailwar, V. K. (2011). Economic environment of business. Place of publication not
identified: Prentice-Hall Of India Pv.
Knox, M. (2016). Supermarket monsters: The price of Coles and Woolworths'
dominance.