Strategic Analysis of Woolworths Group Limited Operations

This case study provides a detailed analysis of Woolworths Group Limited, an Australian-based company with diverse business ventures including Australian food, New Zealand Foods, and Endeavor drinks, with a primary focus on Woolworths Supermarkets. The analysis covers macro-environmental factors such as political, technological, global, economic, demographic, and socio-cultural influences. It explores the retail industry landscape in Australia, including Porter's Five Forces, assessing supplier power, customer bargaining power, the threat of substitutes, barriers to new entrants, and competitive rivalry. The study further delves into Woolworths' internal resources, capabilities, and core competencies, such as its world-class supply chain, branding, marketing, innovation, and integration strategies. The case concludes with a competitor and strategy analysis, emphasizing the importance of customer value propositions and adapting to changing consumer preferences, particularly among the millennial demographic. Desklib provides access to similar solved assignments to aid students in their studies.

Woolworths Group Limited Company Analysis1
Woolworths Group Limited Company Analysis
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Woolworths Group Limited Company Analysis2
EXECUTIVE SUMMARY
Woolworths Group Limited Company is an Australian based company that deals with several
businesses. The businesses include Australian food, New Zealand Foods, and Endeavor drinks.
The most prominent venture in the Australian food is the Woolworths Supermarkets which have
995 outlets in the country. An analysis of Woolworths Company is essential to help in improving
operations and coming up with strategies to overcome competition from rival stores. Areas
analyzed in the paper include macro-environmental factors, the retail industry, the company's
resources and core competencies and the company's strategies. After analysis of the essential
aspects, the company needs to come up with products for the millennial. The millennial
population is growing in Australia which makes it a target market for the company. Through
having the improvements in the company, the industry will continue to grow and make more
profits in the future.
TABLE OF CONTENT

Woolworths Group Limited Company Analysis3
EXECUTIVE SUMMARY.............................................................................................................2
TABLE OF CONTENT...................................................................................................................3
Woolworths Group Limited Company Analysis.............................................................................4
Introduction......................................................................................................................................4
Macro-Environmental Analysis...................................................................................................4
Industry Analysis.........................................................................................................................6
Porter’s Five Forces analysis....................................................................................................6
Company Analysis.......................................................................................................................7
Resources..................................................................................................................................8
Capabilities...............................................................................................................................8
Core Competencies...................................................................................................................8
Competitor Analysis....................................................................................................................9
Strategy Analysis.......................................................................................................................10
Conclusion.....................................................................................................................................10
References......................................................................................................................................12

Woolworths Group Limited Company Analysis4
Woolworths Group Limited Company Analysis
Introduction
Woolworths Group Limited Company is an Australian based company that deals with
several businesses. The businesses include Australian food, New Zealand Foods, and Endeavor
drinks. The most prominent venture in the Australian food is the Woolworths Supermarkets.
There are 995 Woolworth's supermarket stores across Australia. The supermarkets together with
Coles Stores account for about 80% of the market share in the country. Woolworth Supermarket
falls under the retail industry (Woolworths Group, 2018). In the recent past, the company has
been facing challenges in its operations. The primary problem has been competition from
upcoming retail stores in Australia. Aldi a German-based supermarket has been the main
competitor of Woolworth stores (Martin & Rice, 2017). An analysis of Woolworths Company is
essential to help in improving operations and coming up with strategies to overcome competition
from rival stores. Therefore, the paper will analyze different aspects of the supermarket to help
improve the company's operations.
Macro-Environmental Analysis
The macro environment is the external force that exists in the environment a business
operates. Woolworth Group Company experiences various macro-environmental factors in its
day to day operations. One of the macro environment factor affecting the company is the
political and legal environment. The company is regulated by various laws in the country that
shape its operations. For instance, the government governs the hours that the supermarket
operates, the licenses the company should possess to operate in the country and trade practices.
Australian Competition and Consumer Commission (ACCC) is one of the government body in
the country that governs the competition in the industry (AFN, 2015). Woolworth compliance to

Woolworths Group Limited Company Analysis5
the regulation helps in conducting good business practices to ensure healthy competition in the
industry. The company also operates within the law of the country.
Another macro environment factor affecting the company is technology. Technology is
advancing each day. Therefore, the company needs to work on improving its operations through
the use of technology to stay relevant in the industry. The company has been adopting and using
technology in its daily operations (Claessens, 2015). For instance, the company has an online
website that enables its customers to shop online. The technology helps in efficiency for the
customers as they can place orders and delivery is made at their doorstep (Cameron, 2015).
Therefore, technology is helping the company improve in their operations.
The global segment is a macro environment factor affecting the company. The company
is expanding to other countries worldwide to grow and increase market share. For instance, the
company has stores in New Zealand and India which helps in targeting more customers. The
economic segment is also affecting the company. There has been slow growth in the Australian
economy which has become a threat to the industry (Glass, 2018). The growing unemployment
rate and inflation continue to affect the Australian economy. Such factors, therefore, pose threats
to the company.
Lastly, demographic and socio-cultural segments affect the company's operations. An
increase in the population in Australia is a demographic segment that would make the company
change and improve its operations. In the year 2008, there were 21 million people in the country,
and the number has been growing steadily (Frue, 2017). The growth is attributed to many
immigrants settling in the country. The different people in the country may force the company to
change its operations such as changing products sold. Such changes will enable the company to
gain more customers and cater to their different needs. The socio-cultural segment is also

Woolworths Group Limited Company Analysis6
changing the company's operations. The population's taste and preferences are changing in the
country. For instance, people are health cautious especially the foods they take, the lifestyle and
obesity issues. Such changes are making the company change products in the stores to low-fat
foods, Genetically Modified free foods and provision of organic foods (Glass, 2018). Therefore,
the demographic and socio-cultural segment is impacting the company.
Industry Analysis
The retail industry in Australia is thriving and growing fast. The industry is at its growth
phase in the life cycle. There has been an increase in retail stores in the country which is
increasing the competition. Growth in the profits made in the industry has also been observed.
Companies opening stores in the country include Aldi a German-based outlet that is bringing
competitiveness in the country (Marseglia, 2016). As competition and profitability increases in
the country, it is essential to analyze Porter's Five forces analysis in the industry.
Porter’s Five Forces analysis
The first force in the Porter's Five Force is the suppliers bargaining power. Suppliers
bargaining power is the ability that the industry players have on regulating prices of their goods
and products. In Australia, the retail company varies with the brand name and the recognition of
the company to the consumers. For instance, brands such as Coca-Cola have high power in
regulating their prices in the retail stores. Analysis of other brands makes the retail company
have moderate to the high bargaining power of suppliers (Hanlon, 2016).
Bargaining power of customers is another force in the five forces analysis. Customer's
bargaining power is the ability the consumers have in lowering the prices of commodities in the
market. Australian supermarkets provide similar products in their stores making consumers have
minimal impacts in determining prices of goods (Martin, 2017). Therefore, the industry

Woolworths Group Limited Company Analysis7
possesses a high customer bargaining power in the country. The next force is substitutes in the
industry. The retail industry in Australia has various substitutes to the products offered to the
consumers. For instance, supermarkets have other substitutes such as pharmacies, petrol stations,
grocery stores and online shops. Such substitutes make the industry have moderate to high
substitutes for consumers (Muditt, 2017).
Threats to the new entrants in the industry are moderate. The industry has several barriers
that would not attract new players in the market. For instance, there are government regulations
on operations in the country, high land rates and prices and the high capital requirement to start
the business that may pose a barrier to new entrants in the company (InsideFMG, 2017). There
can also be challenges in finding a consistent supplier of goods as most supply to the existing
retailers in the industry. Such barriers may make the industry unattractive to the new entrants.
Lastly, competitive rivalry in the industry remains intense. Players in the industry maintain high
competition which may make the industry unattractive to any person wishing to join the industry
(Pash, 2017). An analysis of the retail industry in Australia makes it unattractive to new entrants,
but it is attractive to the end consumer due to affordable prices maintained as a result of intense
competition.
Company Analysis
An analysis of Woolworths Company's resources, capabilities and core competencies is
essential to determine the strengths and weaknesses in the operations. The effectiveness of
existing strategies is evaluated in the process. The comprehensive analysis also helps in
determining opportunities in the market and determining areas requiring improvement (Rice
&Martin, 2017).

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Resources
There are various resources at Woolworths Company. The resources include human
resource, products, logistics and skills which form the tangible and intangible resources of the
company. There has been effective management of the employees working in the company,
nurturing of new skills introduced in the company, improvement in services offered to customers
and the building of a brand recognized globally. For instance, Woolworths Supermarket has 995
store outlets where 115,000 employees are provided with job opportunities (Woolworths Group,
2018). Such a population and stores show that the company has strong and well-managed
resources that help in providing quality services and products to customers.
Capabilities
Capabilities are the ability of the company to utilize its resources to achieve goals and
objectives. Proper organization and management of the resources also play a critical role in the
realization of capabilities. Woolworths Company has existed since 1924 and has run its
operations successfully. The success in managing the resources proves that the company has the
capabilities of handling its resources (Cameron, 2015). It has succeeded in placing the right
people in the right places as well as utilizing skills to bring out the best products and goods.
Core Competencies
Woolworths Company has critical competencies in its operations. One competence is a
world-class supply chain. The company's supply chain entails detailed contracts that suppliers
need to comply. For instance, a clear description of the products to be delivered is one. Quality
and sizes, especially in vegetables and fruits, are well outlined in the contract (InsideRetail,
2015). Another aspect in the supply chain is a specified delivery time which needs to be

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followed. The supply chain strategy has, therefore, been effective in meeting the consumer
demands and needs.
The next competence is branding and marketing. Woolworths Company has a slogan that
is easily remembered and communicates to its customers. The slogan is “The Fresh Food
People.” The slogan helps consumers view the company as one that provides quality, healthy and
affordable products. Innovation is another competence in the company (Muditt, 2017). The
company has developed innovative strategies to aid in delivering of quality products. For
instance, the company started a petrol retailing idea to help in complimenting other products in
the company. Lastly, integration is competence in the company. The company integrates its
services to help in its identification. For instance, the company integrates smaller stores in its
operations to help improve the shopping experience of its customer (Muditt, 2015). Therefore,
core competencies included in the company have helped in achieving the objectives of the
company.
Competitor Analysis
The competitive threat to the company is the price rivalry. Price rivalry in the industry
has led to low profitability of many companies. There exist several retail stores that deal with the
same products. As more outlets sell the same products, pricing is crucial to attracting customers.
Customers are attracted to outlets with affordable pricing, therefore, making it an essential
element in the industry. Woolworths Company has managed to come up with a business model
that has enabled its growth. The company continues to maintain high profits despite the
competitive prices in the market (CGMA, 2013). Therefore, proper management of prices has
helped the company manage its main competitive threat.

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Strategy Analysis
Woolworth's strategies are aimed at maintaining affordable prices while providing quality
products to the consumers. There are different business strategies used to ensure the objectives
are met. One strategy is customer value propositions (CVP). CVP entails considering the
customer in the company's operations. The company ensures that the products are of good
quality and with the most affordable prices in the market (Cameron, 2015). Another strategy
used in the company is the pricing formula. The company's pricing strategy entails low prices on
the products, utilization of economy of scale, proper management of the supply chain, sales of
high volumes while maintaining a low margin and maintaining a high resource velocity. Other
strategies in the company are the fundamental processes and resources (Glass, 2015). Essential
resources in the company are human resources, products, skills and brand name. Critical
processes include advertising and marketing, improvement of the brands, provision of efficiency
in the supply chain and provision of a variety of products. The strategies used in the company
have effectively worked in achieving the goals and objectives of the company. So is because
there has been an increase in revenues by 4.5% in the year 2017 (Woolworths Group, 2018).
Despite the tremendous progress in the company, there is a need to come up with products that
suit millennial. The company can include clothing in their stores to cater to millennial. Millennial
is the target group that has the potential to grow the retail industry (InsideRetail, 2015).
Conclusion
In conclusion, Woolworth's analysis is essential in improving operations and coming up
with strategies to overcome competition from rival stores. Essential areas analyzed include
macro-environmental factors, the retail industry, the company's resources and core competencies
and the company's strategies. After analysis of the essential aspects, the company needs to come

Woolworths Group Limited Company Analysis11
up with products for the millennial. Through having the improvements in the company, the
industry will grow and make more profits in the future.

Woolworths Group Limited Company Analysis12
References
AFN, 2015. Woolworths announces new strategies to win over grocery shoppers, AFN reveals
full detail. [Online]
Available at: http://www.ausfoodnews.com.au/2015/05/06/woolworths-announces-new-
strategies-to-win-over-grocery-shoppers-afn-reveals-full-detail.html
[Accessed 27 July 2018].
Cameron, N., 2015. Woolworths details 3-year strategy to become customer-centric. [Online]
Available at: https://www.cmo.com.au/article/574302/woolworths-details-3-year-strategy-
become-customer-centric/
[Accessed 27 July 2018].
CGMA, 2013. Porter’s Five Forces of Competitive Position Analysis. [Online]
Available at: https://www.cgma.org/resources/tools/essential-tools/porters-five-forces.html
[Accessed 27 July 2018].
Claessens, M., 2015. The Macro Environment – Six Forces in the Environment of a Business.
[Online]
Available at: https://marketing-insider.eu/macro-environment/
[Accessed 27 July 2018].
Frue, K., 2017. What is DESTEP Analysis and How it’s Used in Business. [Online]
Available at: http://pestleanalysis.com/destep-analysis/
[Accessed 27 July 2018].
Glass, M., 2018. Retail Store Life Cycle. [Online]
Available at: https://yourbusiness.azcentral.com/retail-store-life-cycle-23425.html
[Accessed 27 July 2018].
Group, W., 2018. 2017 Annual Report.
Hanlon, A., 2016. How to use Porter's Five Forces. [Online]
Available at: https://www.smartinsights.com/marketing-planning/marketing-models/porters-five-
forces/
[Accessed 27 July 2018].
InsideFMCG, 2017. Woolworths boss details grocery challenges. [Online]
Available at: https://insidefmcg.com.au/2017/02/23/woolworths-boss-details-grocery-challenges/
[Accessed 28 July 2018].
InsideRetail, 2015. Woolworths reveals growth strategy. [Online]
Available at: https://www.insideretail.com.au/news/woolworths-reveals-growth-strategy-201505
[Accessed 27 July 2018].
Marseglia, C., 2016. How to conduct a DESTEP analysis. [Online]
Available at: https://claudiomarseglia.com/2016/05/13/how-to-conduct-a-destep-analysis/
[Accessed 27 July 2018].
Martin, M., 2017. Porter's Five Forces: Analyzing the Competition. [Online]
Available at: https://www.businessnewsdaily.com/5446-porters-five-forces.html
[Accessed 27 July 2018].