Environmental Scan Report of Woolworths Limited: Business Analysis

This report provides an environmental scan of Woolworths Limited, an Australian retail giant. It begins with an introduction and then delves into the factors influencing the external business environment, utilizing the PEST analysis framework (Political, Economic, Social, and Technological). The report ...Read More

Running head: ENVIRONMENTAL SCAN REPORT
Environmental Scan Report of Woolworths Limited
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1ENVIRONMENTAL SCAN REPORT
Table of Contents
1. Introduction......................................................................................................................2
2. Factors Influencing External Business Environment......................................................2
3. Environmental Factors Impacting Australian Business...................................................3
4. Business Analysis of Woolworths and Components Impacting External Business
Environment....................................................................................................................................3
5. Pressure Factors of Woolworths and Four External Business Environment Components
.........................................................................................................................................................4
6. Conclusion.......................................................................................................................5
References............................................................................................................................6

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1. Introduction
Analyzing business environmental factors can support companies in developing
competitive strategies. The objective of this paper is to gather useful information regarding
business environment of an Australian business namely, Woolworths Limited. Moreover, the
paper will also describe the nature of the selected business and the ways in which environmental
factors exert pressure on the business.
2. Factors Influencing External Business Environment
PEST analysis encompass aspects that impacts external business environment of
organizations (Mugurel-Alin, 2017). This evaluation also ascertains the managers to gather view
of the current strategic position of the company and develop effective strategies that can improve
their business position. PEST analysis includes factors such as political, environmental, social
and technological.
 Political factors are focused on analyzing the political situation of the nation and its
impact on the business.
 Economic factors focus in analyzing determinants of economic position of a nation in
which the business operates including inflation rate along with monetary and fiscal
policies (Botha, Kourie & Snyman, 2014).
 Social factors analyses the effect of cultural implications of a country in the business such
as social lifestyles and domestic structures
 Technological factors analyses consumer reaction to recent technological trends and its
impact in the business

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3. Environmental Factors Impacting Australian Business
PEST or external business environment analysis of Australian business is conducted
under:
 Political- Australia is among the vita markets for MNC’s within the Asia region and the
nation has a flourishing economy, has a stable political and business environment with
skilled and highly educated workforce (Stewart, Boks & Bey, 2017).
 Economical- Prices of property is increasing in comparison to income levels in the
country. With the growth of population as well as income, the demand for housing is
exceeding supply that results in prices to increase continuously.
 Social- In Australia, 10% of the population belongs to upper class those are wealthiest,
another class belongs to non-manual workers and there is a class of manual workers those
are influenced by arts and entertainment (Sun 2014).
 Technological- Certain concerns dominate the recent Astrakhan science and technology
policy that includes focus of R&D in national research centres.
4. Business Analysis of Woolworths and Components Impacting External Business
Environment
Woolworths Limited is positioned as one of the largest retail chains in Australia that has
more than 39% of the nation’s grocery industry. Based on the demands of the external business
environment, the company has diversified its product ranges including wide range of products
and services, food and liquor and insurance sector (Leonidou et al., 2017). Certain factors that
exert pressure on Australia’s business environment are mentioned below:

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 Certain political disturbances discourages the business and its investors from entering the
market because of low rate of return and business failure risk
 Woolworth Limited experienced financial crisis that impacted its overall sales
 The company faces pressure to diversify its products as its consumers are shifting
towards selecting healthy grocery items for healthy lifestyle
 Retail industry is accepting rapid technological advancements and the company needs to
keep up with such advancements for attaining competitive advantages
5. Pressure Factors of Woolworths and Four External Business Environment Components
Elaboration of pressure factors in consideration to four components of external business
environment is explained below:
 Political- The Company might have faced political disturbances that could have affected
its growth opportunities. As Woolworths Limited’s business operation in the industry is
highly stable, it can eliminate the risk of business loss (Adeola, 2016).
 Economic- Woolworths Limited’s sales were impacted drastically due to financial crisis
in Australia. Australian retail industry maintains stability that has supported the company
to continue its business successfully even after setback within UK industry.
 Social- Consumers are drastically shifting their preferences to choose healthy predicts
that exerted pressure on the company to offer healthy food options. Considering the
same, Woolworths Limited is removing all confectionary products from its check-out
counters and offering healthy food choices.
 Technological- Emergence of new technologies for improving shopping experience of
consumers is exerting pressure on Woolworths Limited to make technological

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advancements. Considering this, the company has presented innovations like self-service
checkout and integrated service oriented architecture (SOA) in its business operations.
6. Conclusion
The objective of this paper was to gather useful information regarding business
environment of an Australian business namely, Woolworths Limited. It was gathered from the
paper that retail industry is accepting rapid advancements and the company needs to keep up
with such advancements for attaining competitive advantages.

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References
Adeola, A. (2016). Impact of External Business Environment on Organisational Performance of
Small and Medium Scale Enterprises in Osun State, Nigeria. Scholedge International
Journal of Business Policy & Governance ISSN 2394-3351, 3(10), 155-166.
Botha, A., Kourie, D., & Snyman, R. (2014). Coping with continuous change in the business
environment: Knowledge management and knowledge management technology. Elsevier.
Leonidou, L. C., Christodoulides, P., Kyrgidou, L. P., & Palihawadana, D. (2017). Internal
drivers and performance consequences of small firm green business strategy: the
moderating role of external forces. Journal of Business Ethics, 140(3), 585-606.
Mugurel-Alin, M. (2017). The management of external business environment interaction with
the company. Development.
Stewart, R., Boks, C., & Bey, N. (2017). A review of key dimensions for designing environment-
driven collaboration practices with external business partners. In DS 87-5 Proceedings of
the 21st International Conference on Engineering Design (ICED 17) Vol 5: Design for X,
Design to X, Vancouver, Canada, 21-25.08. 2017.
Sun, Y., Guo, P., Ma, Z., Li, T., & Dang, S. (2014, November). UK-based external business
environment analysis of outdoor adventure clothing using the PESTEL tool and its future
outlook. In Information Technology Systems and Innovation (ICITSI), 2014 International
Conference on (pp. 306-309). IEEE.