Woolworths Group: Strategic Analysis of Business in Practice Report

This report provides a comprehensive analysis of Woolworths Group, a major player in the Australian retail sector, focusing on the external and internal factors that influence its business practices. The report employs PESTLE analysis to evaluate political, economic, social, technological, legal, and environmental factors impacting the organization, covering aspects like minimum wage laws, economic growth rates, technological innovations, and environmental regulations. Furthermore, it uses SWOT analysis to assess Woolworths' strengths, weaknesses, opportunities, and threats, highlighting its brand loyalty programs, competitive pressures, and potential for expansion. The report concludes by discussing how Woolworths can impact the external environment through sustainable practices, innovation, and community support, emphasizing the importance of strategic thinking and adaptation to maintain a competitive market position. Desklib offers this report as a valuable resource, among numerous other past papers and solved assignments, for students seeking to deepen their understanding of business strategy and analysis.

Business in practice
INTRODUCTION
Business is a method which helps to generate the revenue in order to maximize the production and growth of the
company. Business in practice is an activity performed by employees and management team to achieve business goals.
It is used to be made with the employee engagement to make profit and business growth. The present report will give
detailed information about Woolworths group deals in retail sector, Australia. Woolworths provides healthier food and
groceries item. Further, the report will discuss the external and internal factors effect specific organization. With the
help of PESTLE analysis, the company can evaluate various factors that affect business. At last, the case study will
describe the different ways in which Woolworths can impact on the external environment.
1. Discussing the external and internal factors effect an Organization
Political factors
 Minimum wage and
anti-laws
 Ban of single use plastic
Economic factors
 Infrastructure quality
 Economic growth rate
Social factors
 providing them fresh fruits
and vegetables to health
conscious population
Technological factors
 Artificial intelligence
 Machine learning
Legal factors
 Changes in employment
 Customer’s safety and
privacy
Environmental factors
 Initiated advanced systems
like HVAC system
 Natural refrigeration
 Focus on promoting sustainable farming and agriculture
practices
 Promoted programs where wastage of food is turned into green
energy
 Enhanced and encourage innovation
 Eco-friendly products by utilizing recycling method
 Provide employment to needy people
 Reduce inputs such as pesticides and chemicals
 Provides benefits to needy people such as healthcare and
education
Strengths
 Facilities to its loyal
customers
 Brand loyalty programs
Weaknesses
 Heavy competition in
retail marketing
 Limited global presence
Opportunities
 New stores in different
geographical areas
 Seek growth and
development through
strategic decision
Threats
 Rapidly change in trends
and technology
 Increasing material costs
 Changes in laws and
policies
2. Different ways in which Woolworths can impact on the external environment.
CONCLUSION
To conclude, it can be stated that PESTLE and SWOT analysis is a
planning and business tool used by company in order to collect detailed
information about possible impact of the factors on a company. This makes
it easier for firm to prepare for any issues caused by these internal and
external factors. With the help of these strategies can encourages strategic
thinking. By evaluating the report, it is concluded that these techniques
allow an organization to spot an opportunity in order to compete in market
to make its market position high. Further, it is analyzed that company can
improve its business, marketing, workforce planning, product and market
development by utilizing these methods. By identify source of information
and specific options the company can meet the required trends. To be
effective in business operations company needs to keep track on laws and
perform methods on regular basis.

NOTES:
1. Discussing the external and internal factors effect an Organization
PESTLE analysis
Woolworths PESTLE analysis evaluate the different factors and also helps to understand
market dynamics and develop its business continuously. It is a tool used by company to gain a
macro picture about company environment (Cheba and et.al., 2021). It allows a firm to form an
impression of various factors that might affect a new business and its activities. In today's
marketing strategy, before any kind of plan can be implemented, it is essential to conduct a full
analysis of situational scenario. If Woolworths needs to differentiate from the competition, then
they must respond and measures the changes in the macro environment. These techniques will
help them to have a competitive advantage over other retail company.
Political factors- Political factors involves trade restriction, tariffs and tax policy. These
factors will determine the extent to which a local government may influence an organization.
Non-tariff trade barriers include bans and exports restrictions (Bonfante and et.al., 2021). There
are several political factors affecting Woolworths business. Due to ban of single use plastic led to
a certain slowdown during year. Now it’s time for retail sector to start working towards
alternative options of packaging. Due to reduction and stability in fuel prices have provided
benefits to the company and maintain high profitability. Because of trade war many foreign
investors are already reluctant to invest in ventures of Australia. Due to minimum wage and anti-
laws related to retail sector can impact the company.
Economic factors- This factors include interest, inflation, wages and unemployment or
cost of living. Due to rise in the inflation rate would affect the way companies price their
services and products (Friedler, 2021). Additionally, it would also affect the purchasing power of
customers and may result in a change in supply models for economy. The company initiated
different loyalty programs in order to retain its market share in competitive business.
Woolworths has managed to gain the customers trust and satisfy them as per customer needs,
habits and experience. Due to higher stock loss, the company claimed to have made increase its
sales by 3.4% reduction in gross profit. Because of infrastructure quality and economic growth
rate the company get affected.
Due to pandemic COVID-19 the economic condition of Australia is challenging so does
for companies. This has a negative impact on development and growth of company.
Additionally, it has also impacted the sales growth rate and sustainability (Linder and et.al.,
2021). In this case, the firm is totally dependent on its smart stores and online platform to attract
customers by offering them varieties of goods to regain its growth.
Social factors- This factors involve career attitudes, health and safety, population growth
rates. With the help of these factors company can plan their marketing strategies and analytics in
a better way. They also highlight the company's local workforce and its activities. Shared
attitudes and values of the population plays a vital role in how marketers will understand the

customers’ needs and how to design marketing strategies (Malik and et.al., 2021). Due to heavy
competition, customers are moving towards healthier options, related to variety and quantity or
quality products or services.
Woolworths managed to capture this drastic change in trend and work effectively in order
to satisfy customers by providing them fresh fruits and vegetables with the help of its campaign
named as grower fresh campaign. Variety of products was introduced by the company to satisfy
the needs of health conscious population at reasonable price and discounted rates.
Technological factors- It includes development in technologies and innovations, thus,
these factors can impact operations of business (Phan, 2021). Innovative ideas like artificial
intelligence, machine learning and others being made in the field of technology. If the company
fails to match up the market trend, customer trend it may lose its market position and reputation.
Woolworths established the concept of smart stores in order to make their groceries stores safer
with help of iPad designed in new way with inbuilt cameras.
The company has provided benefits like free home delivery and online servicing 'shop
and go' that has been improved to decrease the hassles of online shopping faced by customers. It
is evaluated that the company should speed not only do analysis of technologies but also keep a
track on the speed at which technology disrupts (Sari and et.al., 2021). With the help of this
technique the company may give little time to be profitable and enhance its performance.
Legal factors- It includes imports/exports and resources and taxation, have both internal
and external sides. Due to this, certain laws made by government have effect the company's
environment. The business has to follow few strict policies to overcome the possibilities of legal
issues. The management team of Woolworths needs to follow policies and rules strictly to
enhance positive employee management. A company needs to careful before entering market as
it can lead to theft of firm's secret and data (Shadman and et.al., 2021). While making companies
laws it is essential to set rules and regulations by which a staff member can make strategies.
The present company follows different rules and regulation, policies, norms strictly in
order to avoid any sort of legal claims against their services by keeping their stocks up to date.
Due to changes in employment, customer’s safety and privacy, money laundering will have
direct impact on company's working and its operations (Vera-Valdés, 2021). On the other hand
the company focuses on quality management in order to satisfy the customer needs.
Environmental factors- It includes energy consumption regulation, waste disposal laws
and environment protection act. Different business market has various rules and policies which
can affect the profit margins. This factors also includes climate changes and weather that affect a
business operation. Before entering new markets and launching new services or products the
company should carefully examine the standards of environment that are required to business
operations. Nowadays, corporate social responsibility has been made compulsory for every
company due to increase in global warming. There are various environmental factors such as
climate changes, recycling, weather and green or ecological products. The present company have
launches ecological items which is beneficial for atmosphere. The company focuses on carbon
emission level in business operation in order to make eco-friendly environment.

Woolworths have initiated advanced systems like HVAC system and natural refrigeration
in order to make eco-friendly environment. Building smarter stores is another step taken by
company to attain it sustainability business goals. The company has managed to design a smart
store that meets the requirements of 5-star green start design with the help of innovative ideas
and trending technology. The company has initiated various elements like reduction in food
waste in order to get responsible business entity.
SWOT Analysis
It is a framework used by company to evaluate a competitive position and to improve
strategic planning. It is designed to facilitate a fact based weaknesses and strengths of a company
or initiatives. An organization used this analysis as a guide in order to find out the competitive
business position. The company needs to keep up to date information about the changing trends
while evaluating SWOT. With the help of external and internal data the method can guide and
give detailed information about business strategies and techniques used by them.
It is a great way which helps the company to find out the marketing and business
strategies used by various companies (Wang and et.al., 2021). The firm can make decision-
making process with the help of this method and plan business techniques. This method is used
by managers of Woolworths to do a situational analysis of the firm. The present company
maintains its business position in market by carefully reviewing and analyzing effectively
collaboration among different departments such as finance and management of marketing.
Strengths- It refers to what separates the company from its competition like strong
product and unique technology. Strengths indicate building and enhancing the strategies in order
to improve performance. Woolworths provides facilities to its loyal customers and introduce the
modern retail trade model. The company has several brand loyalty programs for the benefit of its
regular customers. With its efficient operations the company has made its brand name famous.
Offering discounts and variety of products at its stores enhance the company's business. The
company provided private label brands as per the needs of consumers.
Automation of business activities brought consistency of quality to products or service of
Woolworths and has enabled the firm to scale up and sown according to customer demand and
market situation. The firm is successful at execution of new projects and good return generation
on capital expenses by boosting new revenue streams (Shadman and et.al., 2021). As the
company has built a strong distribution network, it reaches majority of its potential retail market.
Weakness- Anything that stop an organization from performing at its best and optimum
level. It includes weak brand, high levels of debt and lack of capital or others. This can indicate
resolution of any weakness that comes between the success of company. Due to heavy
competition in retail marketing, growing presence of online brands like amazon, flip kart and
others has restricted growth. The major weakness here is it has limited global presence as
compared to its competitors in the same sectors. The company is not very good at forecasting of
demand therefore end up keeping high inventory management both in channel and in house.
By investigating the SWOT, it is noted that the firm is not bale to tackle the challenges
present by the new competitors in the segmentation strategy. Moreover, the firm has lost small

market share and build internal mechanism feedback with the help of sales and marketing team
to deal with challenges. The company's unique selling proposition and positioning is not clearly
defined which can ultimately increase attacks in segment from the competitors of Woolworths.
Opportunities- This analysis could give a company a competitive advantages and benefit.
The present company needs to seek growth and development through strategic decision and
franchise models in emerging economies and its scale. With the help of various promotion
strategies, the company can promote the brand name like sponsorship and advertisement through
social media Facebook, Instagram and others. It will be beneficial for Woolworths if they open
new stores in different geographical areas so that every customer can purchase products easily.
The adoption of free trade agreement has provided the company an opportunity to enter in new
market and new taxation policy can open opportunity to improve its profitability and
productivity (woolworths PESTLE & SWOT analysis, 2021). As increase in new trends can open
up new strategies for the company, as it offers a great benefit to build and diversify new goods
and services to attract customers.
Threats- Anything that have the potential to harm the company like increasing
competition, rapidly change in trends and technology and increasing material costs. Due to
economic recession the growth strategy of opening more stores in geographical areas may get
affected. Heavy competition from international retail company like Walmart, Tesco and eBay
can affect the business of Woolworths. Another major threats may face by company is increase
in raw material costs will affect the profit margins and overall performance of business. Different
laws and policies related to standards of products will be threat for the company. Low quality
product is threat to the company's goods especially in the low income markets and new
developed markets.
It is analyzed that if the company perform PESTLE and SWOT analysis on regular basis,
then it can be beneficial for competitive advantages and spot business or customer trends before
others. Due to competition, the company needs to determine the strategic management measures
and future scope of action.
2. Discussing the different ways in which Woolworths can impact on the external environment.
There are many ways in which an organization can affect the external environment
primarily through its services and products. From the above, discussion it is evaluated that
changes in the macro environment factors can effect Woolworths and also can affect other
competitors in food retail sectors. They can impact firm's competitive advantages and overall
performance of the business. Sometimes the company's goods are responsible for under
performance of economic growth. Being able to sell goods or services online using online
platform or automation. Sometimes people can get cheated through online purchasing while
doing payment using debit card or other mode of payment. This will ultimately create negative
impression on customers regarding security and safety of customer’s personal data. This creates
loss of customers and their loyalty towards company. With the rise of technology and innovation,
cheating is becoming more prolific, as fake websites now offering products or services at lowest
price. This will increase the fraud cases and may affect the reputation of economic condition. To
improve such cases strict action needs to be taken by company.

Due to utilization of plastic packaging and harmful raw material are risky to human
health or living being. It can have a significant impact on economic operations, sustainability and
growth. The company needs to react and make decisions to help it remains successful to attain
profitability. As mentioned above weather conditions affecting sales or production and growing
interest of customer to use Eco-friendly products by utilizing recycling method (PESTLE
analysis, 2021). An increasing trend of using short cuts to meet market demands will affect the
external environment. The company is committed to reduce the use of waste; with the help of
recyclable material the company has made pollution free environment. Everything in the stores
of company has made up of recycled materials like trolleys, boxes and signage.
External factors are uncontrollable, so it is mandatory to react on them and make relevant
strategies. The present company needs to manage the external factors that can open up new
techniques and opportunities in order to enhance strategic plan. The firm need to learn
performance management process for goal setting. By utilizing the marketing strategies, the
company can improve the purchasing power and bargaining method. In order to improve the
business continuously the company can influence the factors of macro or micro environment.
Due to change in taste and fashion, the customer may move towards the other options. So, the
company needs to focus on its opportunities and goal setting strategies to make active its daily
operations.
Emerging trends and customer behavior may show changes in wants and expectation of
customers (External environmental factors impacting woolworths, 2021). Sometimes the firm
doesn't utilize proper resources thus, it will affect the external environment. Generally, it is noted
that the company has 31% of market share in retail industry and it is taken into consideration into
Australian economy producing 4.1% of GDP of the company.
As other bigger political factors impact the import-export and trade policy needs to
actively taken into consideration while making strategic decision. Due to increase in competition
Woolworths has failed to capture the picture of market share. Stock loss and other related factors
contribute to the economic situation and market stability of firm. The firm needs to keep track on
factors like high bargaining power of different category of customers.
The company has established a process of diverting surplus food from offline stores in
order to address the issues related to food security. The company donates the food to needy
people via charity organization for social welfare. The company's sustainable business practices
have enhanced and encourage innovation within the retail sector chain. The firm makes
economic contribution to economy with annual sales and a large number of workforce across,
ultimately it has provided employment to employees. The company has been involved in making
various initiatives like career exhibitions and internships for unemployed people and disable
people.
The firm focus on promoting sustainable farming and agriculture practices in food supply
chain with the help of farming programs The main objective of utilizing this practices is to
reduce inputs such as pesticides and chemicals which is harmful for human being or animals. In
order to protect biodiversity, the company has reduced the inputs of fertilizers and water use.
They have promoted programs where wastage of food is turned into green energy for giving

benefits to social welfare. They have sourced own brand products that support the people. The
company started working with local partners to protect rivers, soils and wildlife and provide
benefits to needy people such as healthcare and education. Thus, in this way Woolworths is
sustainable in nature.
From the above discussion it is noted that the company's program focuses on improving
business areas like packaging, wellness and social development.

REFERENCES
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