Decision-Making Process: Woolworths' Acquisition of Quantum Group

This report delves into the decision-making process behind Woolworths' acquisition of Quantum, focusing on the financial factors that influenced this strategic move. The analysis includes a five-year data review of Woolworths' sales, gross profit, net profit, inventory, and cash equivalents to determine the company's financial health and its capacity for such an investment. The report highlights the increasing sales and gross profit margins as key indicators of Woolworths' strong performance, enabling the company to diversify and expand its market presence through the acquisition of Quantum. The study concludes that the decision-making process is crucial for companies to identify opportunities and threats, ultimately leading to a competitive advantage and increased profit margins for both Woolworths and Quantum. Desklib provides access to similar solved assignments and study tools for students.

Managing Decision Making
Process

Table of Contents
Introduction...........................................................................................................................................3
Main body.............................................................................................................................................4
Data Analysis....................................................................................................................................4
Conclusion...........................................................................................................................................11
References...........................................................................................................................................12

Introduction
A decision making process is a technique which is used by the individual where a set of
options are identify and the best one is chosen to fulfil their need . in a business context it is
set of steps taking by the mangers to solve the problem and define the plans for their actions.
Decision making process is a five step process which includes:
 Identify the business problem or opportunity : This is the first step in which business
realize that they are some opportunity or challenge that exist in the business
environment which they need to clearly define so that decision can be made.
 Gather information about : In this all the useful data is being collected so that
important information can be gather which helps in making a better decision to
achieve the objective.
 Evaluate the alternative and select the one: A set of alternatives are being selected
and a proper analysis is made so that the best measure can be selected.
 Implement that in the organisation: In this step the alternative which is selected is
implemented in the action so that a positive action is been implement to take the
advantage.
 Control and monitor the actions: This is last step that in which the alternative that is
selected is been monitor so that if any deviation find then a proper step can be taken
to minimize it.
In this report the business opportunity that is been chosen is a merger between the
Woolworths and quantum.
Prioritize Choices
In this report Woolworth is chosen to see why they merger with quantum and what are the
factors which helps them to expand their business.
Justification for chosen the topic
Woolworths has made an announcement on 20 April 2021 that they were going to buy the
share of quantum for $223 million. This is done by the company to increase their stake by 75
percent. So this title is selected so that data analysis could be made that what are the factors
that is help them to make such investments.

Main body
In this section a data analysis is made of Woolworth for past five year so that reason for
expansion can be made. Woolworth buy the stake of Quantum because in this last five year
the company is earning a great profit as well as the sale of the company is increasing day by
day. Due to this the profit of the organisation is increased which help the Woolworth to
diversify in different sector so that it can grow in the market.
Data Analysis
In the below their are the five year data of Woolworth which will help in data analysis.

From the above picture the factors that will be taken to analysis the data are:
Basis 2020 2019 2018 2017 2016
Sales 63,675 59984 56944 55015 53072
Gross profit 18,570 17458 16709 15929 15165
Net profit 1,646 1817 1676 1481 1523
Inventory 4,434 4280 4233 4207 4558
Cash and
cash
equivalent
2,068 1066 1277 917 956
So these are the five factor which act as a opportunity due to which Woolworth hd made such
an announcement of expansion
1) SALES:
2020 2019 2018 2017 2016
63675
59984
56944
55015
53072
sale in $M
Basis 2020 2019 2018 2017 2016
Sales 63,675 59984 56944 55015 53072

From the above bar it is been analysed that Woolworth Sale is being continuously increasing
from 2016 to 2020 which helps the company to earn a great revenue as the production level
increase. This also shows that company has good market share as the company posses a great
number of customer who are ready to purchase their product . so this is the one of the factor
which helps the company to shake their and with quantum and diversify in other product line.
This will also help Quantum to gain a good market share as the foremost organisation has
large number of buyer who are there. If a look is made then in 2016 the sale is slightly low as
compared to other year from 53072$m sale the company within five year increase it sale by
$10603 million which show that Woolworth is a growing industry and merging with this also
help them only.
2) Gross profit:
Year Gross profit
2020 18,570
2019 17458
2018 16709
2017 15929
2016 15165
2020 2019 2018 2017 2016
18570 17458 16709 15929 15165
Gross profit
Gross profit

The second factor that helps the Woolworth to buy the share of Quantum is the gross profit
margin. The gross profit of the company is also increasing with the decreasing rate but as
they sale are increasing this will help the organisation to increase their profit. The company is
an good condition where after deducting all the cost of production and selling then to they are
in the position were they can earn gross profit. And that profit is also increasing with
increasing in production. So this help the Woolworth to buy the share of Quantum without
borrowing it from other sources they are in the position where they themselves can buy the
shares.
3) Net profit:
2020 2019 2018 2017 2016
1646
1817
1676
1481 1523
Net profit
Net profit
Net profit is the ultimate profit that business earn after paying all the taxes, interest and many
more. By the net profit it can be conclude that business is running good or not. In the above
graph it is been analysed that from 2016 to 2019 the company is earning good net profit but
year Net profit
2020 1646
2019 1817
2018 1676
2017 1481
2016 1523

in 2020 the net profit margin is slightly low then 2019. It is because of the hit of the
pandemic but it is concluded that they are in the position were they can pay all the expenses
and then to earn the profit. Which make Woolworth to invest in Quantum so that this Profit
margin can be increased and this also help them to diversify their areas in data sector so that
if any Crisis come then they can earn from that source.
4) Inventory:
Year Inventory
2020 4434
2019 4280
2018 4233
2017 4207
2016 4558
2020 2019 2018 2017 2016
Inventory
Inventory means the good and services that are ready for sale. As from the above plotted
graph it is being seen that the Woolworth inventory is continuously being increasing from
2016 to 2020. As in 2020 the inventory is of $4434 million as compared to the past four year
which means that the buyer are increasing day by day for the company which help them to
earn money which they can be used in variety of field and enhance their market appearance
and publicity.

5) Cash and cash equivalent :
year Cash
2020 2068
2019 1066
2018 1277
2017 917
2016 956
2020 2019 2018 2017 2016
2068
1066 1277 917 956
Cash
Cash
Cash and cash Equivalent is that amount that can be easily liquidate within shorter time
period. In Woolworth the company hold such assets and securities which they can easily be
liquidated in any time of difficult. As the cash position of the company is so good that they
can easily invest their amount in different sector. So the cash flow of the company is so good
that it help the managers of Woolworth to take the decision regarding buying the stake of
quantum. The cash and cash equivalent position of the company im 2020 is $2068 million as
compared to 2016 which is only $956 million. This show that company position is increasing
day by day where they can smoothly convert their money.

Conclusion
From the above report it is being concluded that decision on making process is important for
the company so that they can easily measure the opportunity and threat that exist in the
environment. In this report collection of data is made of Woolworth company as this data is
gather to site useful information that help the manger of Woolworth to know what are the
factor that helps them to make a decision regarding buying the share of the Quantum of
worth $223 million. As this will also help both the company to gain competitive advantage of
market share and increase their profit margin.

References
Books and journal
Du, Z. J. and et. al, (2020). Managing noncooperative behaviors in large-scale group
decision-making: Integration of independent and supervised consensus-reaching
models. Information Sciences. 531. 119-138.
Sadeghfam, S., & Abadi, B. (2021). Decision-making process of partnership in
establishing and managing of rural wastewater treatment plants: Using intentional
and geographical-spatial location data. Water Research. 197. 117096.
Polak, P., Nelischer, C., Guo, H., & Robertson, D. C. (2020). “Intelligent” finance and
treasury management: what we can expect. AI & SOCIETY. 35(3). 715-726.
Ott, W. R. (2018). Environmental statistics and data analysis. Routledge.
Taverna, F. and et. al, (2020). BIOMEX: an interactive workflow for (single cell) omics
data interpretation and visualization. Nucleic acids research. 48(W1). W385-W394.
Hassan, I., Ghauri, P. N., & Mayrhofer, U. (2018). Merger and acquisition motives and
outcome assessment. Thunderbird International Business Review. 60(4). 709-718.
Online
https://www.woolworthsgroup.com.au/icms_docs/195984_annual-report-2021.pdf