Strategic Analysis: Woolworths' Expansion into the Asian Market

This report presents a comprehensive business management plan for Woolworths' expansion into the Asian market, focusing primarily on China. It covers various aspects, including scheduling, budget, scope, and feasibility analysis. The report delves into Woolworths' CSR activities and analyzes the retail market of China using PESTLE and SWOT frameworks. It also includes a stakeholder analysis and a program logic model to illustrate the strategic approach. The plan outlines resource allocation, budget considerations, and a Gantt chart for project management, providing a detailed overview of Woolworths' strategy to establish and grow its grocery and retail business in the competitive Chinese market.

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Executive summery
Woolworths limited is a supermarkets and grocery store chain. The company
specializes in selling groceries including fruits, vegetable, packaged foods, meat, fish and
related items. Currently they are planning to expand in Asian market. In Asian market, the
target of Woolworths is primarily China. This report presents a business management plan for
Wools worth describing all the perspective of starting new grocery and retail business in
China including, scheduling, budget, scope, feasibility analysis, objectives and others.

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Table of content
Introduction and Background:....................................................................................................2
Woolworths CSR activity:.....................................................................................................3
Scope of expansion:...................................................................................................................4
Feasibility analysis:....................................................................................................................5
Retail Market analysis of China.............................................................................................5
PESTLE analysis of Woolworths...........................................................................................5
SWOT analysis of Woolworths.............................................................................................8
Stakeholder Analysis................................................................................................................10
Program Logic Model..............................................................................................................13
Resources.................................................................................................................................14
Budget and Gant chart..............................................................................................................17
References:...............................................................................................................................19

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Introduction and Background:
The well-known Australian company, Woolworths was founded in 1924. Owned by
Woolworths limited the Woolworths supermarkets is a grocery store chain. The company
specializes in selling groceries including fruits, vegetable, packaged foods, meat, fish and
related items. Items such as magazines, household, health and beauty products, pet and baby
items are also found in company’s stores. The company has 1000 stores across Australia
consisting 976 supermarket and 19 convenience store (Wolfsbauer and Bobbin 2016). Along
with supermarkets operating across Australia, the company also has an online store named
HomeShop, widely famous for their “click and collect” service and their home delivery
service. In July 1997, the chain of the company stopped operating and put their prime focus
on sporting goods. After the decision of shifting company’s focus, the company renamed
itself Venator group. In the year 2008, the final decision was taken to close all the
Woolworths stores by the first months of 2009 (Parkinson 2018). Although there are other
existing companies across the globe the Woolworths Company has no affiliations. The
company aim to be the first priority and be placed 1st across all their brands. Five priorities
are set by the company to achieve their goal. The company works on building a customer and
store-led culture and team. It also works towards the generating sustainable sales momentum
in food. The next priority is to evolve drinks business and be able to provide more
convenience to customers. Working on their company’s portfolio to pursue strategies and
deliver shareholder value. Lastly, the company works to become a retailer through end –to-
end process and operating with excellence.

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Woolworths CSR activity:
Corporate Social Responsibility (CSR) is the era when the organization achieves the
development of sustainability in both the scenario of economic dimension and in the social
and the environmental dimension (Cheng, Ioannou and Serafeim 2014). It is the CSR that
encourages and assist companies to think about the impact they can have on the rest of the
society including the environment as well as their stakeholders. In the following case study of
Woolworth, the approach towards CSR is recognized by the success that is not measurable in
the terms of growth and profit but in the way it reduces the impact in the environment. In
Woolworths, it is believed that the integration of the financial performances with the criteria
of the non-finances will generally enhance the value for the stakeholders and the members
engaged and connected to the organization. The organization launched its first strategy of
sustainability in the year 2007 named as doing the right (Frigerio 2017). Being a part of the
CSR strategy for the year 2020, Woolworths aims towards daily reporting on the progress of
its targets towards its goals and commitments. The company has goals and commitments
covering Woolworths’s customer, stakeholders, team members and the communities where
the company operates. The noble cause that the company has initiated is all about people,
planet and prosperity which will be explored in this paper.
However, there have been times when the company is faced with various challenges
such as removal of CEO and dropping of share price. Along with all the obstacle the
company there are opportunities as well that are on the way of Australia’s largest retail
company. The company has got the opportunity by the e-commerce platform and now can
enter the international markets of Asia. Through the help of Tmall Global, which provides
scope to the overseas businesses to conduct business, the Woolworths has got the exposure
and ready to be accessed by the consumers (Whitehead 2016). According to research there is

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a very high demand for high quality, Australian made products in the overseas market. Hence
there is a high possibility for Woolworths to experience a business venture.
Scope of expansion:
Woolworths has grown in one of the biggest retail groups in the southern hemisphere
with its retail market from Ghana to New Zealand. The company has their own purpose, their
vision and their set of values. These constitute the natural progression from the values and the
vision of the business that develops the Woolworths. The goals of Woolworths have always
been to put forward the customers and the clients in the first priority. The overall purpose of
the company has been adding quality to the life. Woolworth targets to be one of the world’s
most responsible retailers by reflecting the commitments, the passion towards the customers,
the people and the planet. The assignment focuses on the case study of Woolworths
highlighting the focus of the organization towards the initiative of an international business
platform. The main scope of Woolworths as explained in this assignment is to expand its
platform of the business in the retail sector from one country to another. Woolworths aims
towards the growth of its business to the markets of Asia. Some of the targeted markets that
the company is focusing to expand and grow are of China, Japan, Malaysia and Indonesia.
As per the investors and bankers opinions, through extending in Asian market rather
than domestic or US debt markets Woolworths could afford to operate more in Hong Kong's,
to become the second largest grocery chain in China. Apart from that, outbidding Japan's
Aeon and Thailand's Charoen Pokphand Group could also bring enough opportunity for
Woolworths to flourish. However, borrowing in local currency can create an ordinary
prevaricate while reducing the currency risk in the operating zone. Recently Woolworths has
already launched their first online store on Tmall Global in China as their fist overseas

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platform by collaboration with Alibaba Group’s B2C Tmall business. This business strategy
is enabling Chinese consumers to order a wide range of products directly from the company
through the portal of Tmall. The recent e-commerce platform will provide an opportunity for
Woolworths’ local suppliers to enter the China market as well. In this situation, rapidly
growing middle class population in china could increasingly seek the Australian products.
Along with adequate funding for overseas business and with low-cost Asian debt
Woolworths can most likely to see an underlined potential reinvestment plan to put their
business in proper place. The regional market as well as global economics could stack up
easily while as a retail company Woolworths could also pay more for the profitable
acquisitions. Apart from that, Woolworths can also take advantage of their high share price in
order to raise capital rapidly. If the company can get their assets for a reasonable price while
using the equity to pursue new achievement, it could be the best way to operate in a ever
expanding market in China, because of their highly rated reputation throughout the globe.
The initiative of Woolworths towards the international expansion of its business mainly
involves the establishment of the operations in the foreign markets. Woolworths will benefit
from the opportunity to access new pools of talents in the market of Asia, gain a competitive
edge over the opponents of Woolworths in the competitive sector of retails in the continent of
Asia.
Feasibility analysis:
Retail Market analysis of China
In order to enhance its business in the retail industry of China, the management of
Woolworths needs to analyze and evaluate its external as well as internal environment. In

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order to understand its external environment, PESTLE analysis of Woolworths has been
conducted.
PESTLE analysis of Woolworths
Political Factor
The political environment of China is highly stable. Stable political condition has
imposed positive impact on the retail industry of the nation. Being a popular retail
organization, The mentioned agreement has combined the two countries where Woolworth is
considered to be the single organization that is supposed to meet the requirements of the
consumers (Scarborough 2016). Considering the fact that like China, the political
environment of New Zealand is highly stable, both local as well as international stakeholders
of Woolworths are politically stable.
Economic Factor
The global recession has imposed an adverse effect on the economic environment of
majority of the developing countries including China. However, being a developing country,
the living standard of China is lower than that of the developed country. Due to recession, the
yearly revenue of the mentioned organization has got lowered. However, not being a nation
with aging population, the labor charge of the nation is not high. This factors are imposing
positive impact on the business of Woolworths (Burns and Dewhurst 2016). However, both
China as well as New Zealand is gaining economic stability.
Socio cultural factor
Considering the fact that the current rate of death in China due to obesity and
inappropriate diet has got increased with time, majority of the consumers have got inclined
towards a healthy lifestyle. Consumers are found to be preferring fat free as well as organic

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food items over food items with higher fat content. This in turn is imposing a negative impact
on the business of the mentioned organization since a god amount of its suppliers are popular
coke and fast food selling companies. However, in order to deal with the situation,
Woolworths have taken several initiatives through its sustainability techniques 2015-18.
However, majority of the consumers prefers to shop at street or traditional markets instead of
shopping at international malls. This may adversely affect the revenue of the country.
Technological factors
Being a developing country, China is not highly advanced in technology. This has
imposed negative impact on the organization. However, due to the availability of internet as
well as communication 24*7 hour hours, Woolworths is able to provide its consumers with
excellent services as well as products (ZHANG et al. 2014). Thus it can be said that lack of
technological advancement can be one of the barrier to the success of the company.
Legal Factor
The Chinese government is highly strict when it comes to the retail industry of China.
The taxation policy as well as the recruitment an employee management regulation is a major
part of the basic legal framework for the Chinese retail industry (ZHANG et al. 2014). Along
with the legal aspect, the food licensing requirements are crucial in the retail sector as the
retail organizations needs to comply with the regulations.
Environmental Factor
Due to the high negative impact of continuous environmental degradation, the
consumers of the mentioned organization have got highly aware of environmental factor. In
today’s environment friendly world, the customers give preferences to companies and
products that show commitment towards producing products that are organic and come with a
green-tag. In order to gain competitive advantage the mentioned organization not only abides

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by the environmental laws of the nation but has also implemented several strategies in order
to minimize carbon footprint.
SWOT analysis of Woolworths
In order to analyze the internal environment of the company, a SWOT analysis of
Woolworths has been conducted bellow.
Strengths
1. Woolworths is considered to be the pioneer and one of the oldest companies that has
introduced the modern retail trade model in Australia and New Zealand.
2. The company is highly popular globally and posses more than 900 stores across the
country.
3. The brand equity of the mentioned company is high.
4. Currently more than 1000,000 employees works for the company. Thus the workforce
of Woolworths is huge (He et al. 2016).
5. The company posses a good number of brand loyalty schemes for its regular
consumers.
6. The brand name of the company is strong and it has efficient operations.
7. The consumer loyalty of the Woolworths company is huge
Weaknesses
1. One of the major weaknesses of the company includes its limited global presence
across the world. The mentioned company is currently present only at Australia that is
origin country of origin as well as at New Zealand. Lack of global presence is
imposing negative impact on the competitive advantage of the organization.

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2. Another weak point of the mentioned company is its late entry in the world of online
marketing. As a result of this, the company is suffering from lack of competitive
advantage in the online market.
3. Finally, the recent conflict between the staffs of the organization is imposing negative
impact on its annual revenue
Opportunities
1. Woolworths, since it posses high brand equity has the potential to promote the brand
through both online as well as offline marketing g and sponsorships.
2. In order to gain competitive advantage and enhance its yearly revenue, it is high time
for the management to establish its branches in the less saturated retail industry of the
middle eastern countries.
3. The company can also see growth strategic acquisitions as well as franchise models in
the emerging economies (Kumar 2014).
4. In order to enhance its online consumer loyalty, the company should use social media
platforms. These platforms will enable the management of Woolworths to directly
communicate with the consumers and understand their specific requirements.
Threats
1. Rising costs of the raw material costs from both food and non-food industries has the
potential to adversely affect the profit of the mentioned organization.
2. Economic recession could hinder the overall growth strategy of opening more stores
of the organization.
3. The high competition in the retail industry of Australia and New Zealand can be
considered as a major threat for the mentioned organization.

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Stakeholder Analysis
Building strong partnership and connection with the stakeholders is the basic key
towards the development and building of a sustainable future for the business. The power and
the influence of the stakeholder tend to affect the profit margin of an organization.
Woolworth, the retail brand of Australia, aims towards the proper understanding of
the influence and the impact of the stakeholders for effectively learning and leveraging the
existing base of the stakeholders (Our Stakeholders – Woolworths Holdings Limited 2018).
The organization targets a good journey of the business with a comprehensive management
of the risks related to the business together with meeting the expectations of the key group of
the stakeholders. The group of stakeholders of Woolworths include the customers, the
employees, the suppliers, the industry organizations, the government and the regulatory, the
media, the union, the communities, the debt funders and the investors from the pubic traded
company and abroad.
The purpose of this stakeholder analysis is to inform the project manager and sponsor who
are contributing to this business project conserving the potential barriers and the actions that
need to be taken prior to detailed project planning.