Strategic Analysis of Woolworths Supermarkets: A Business Report

This report provides a strategic analysis of Woolworths Supermarkets, focusing on its Australian operations. It begins with background information on Woolworths, highlighting its market position and history. The report then delves into a macro-environment analysis, examining political, economic, social, technological, environmental, and legal factors impacting the company. An industry analysis follows, utilizing Porter's Five Forces to assess the bargaining power of buyers and suppliers, the threat of new entrants and substitutes, and the rivalry among existing firms within the Australian retail market. The analysis considers the company's performance and growth in the competitive market. The report concludes by summarizing the key findings, emphasizing the opportunities and threats faced by Woolworths and the competitive dynamics of the Australian supermarket industry.

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Business Management
8/18/2019
(Student Name)

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Table of Contents
About Woolworth............................................................................................................................2
Macro Environment Analysis..........................................................................................................2
Industry Analysis.............................................................................................................................3
Conclusion.......................................................................................................................................4
References........................................................................................................................................5

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About Woolworth
Woolworth is one of the companies that operate its business in the grocery as well as retail
business it is considered as one of the largest organization in Australia as well as has further
expanded to New Zealand and other international market. The company was introduced in the
year 1924 as well as has covered significant market share of approximately 40% in the country
Australia (Woolworth, 2019). The company has achieved 2nd rank out of 2000 retails companies
in Australia. The company manages and employed more than 205000 employees in the year
2016 that was expanded to grow further in the recent years. The company has invested in many
portfolios as well as operates in the supermarket, food, petrol, liquor, general merchandise as
well as Thomas Dux with the hotel improvement and hotel. The company focuses over meeting
the requirement of the customers by delivering quality product at reasonable prices. It has
opened more than 3300 stores across New Zealand as well as maintains more than 850
supermarkets in Australia (Woolworth, 2019).
There will be comprehensive analysis in the following report in which the impact of the macro
environment will be analyzed according to which the performance of the company is affected as
well as the level of growth of Australian industry that support the company to grow in the
competitive market.
Macro Environment Analysis
The macro environment of the country is affected over the performance of the company to the
certain extent. Therefore, the overall environment of Australia is explained d in the below points
as they are:
Political Factor: the companies are greatly affected to stand by the lawful provision of the
terrestrial fully. The company Woolworths has introduced the rules as well as directions in the
dwelling that monitors its employee to bring into line with the legitimate essentials of the
terrestrial the Australia as well as New Zealand are one of the republics that relish longer period
of political constancy. The financial associations that are linked between such two states have
also shaped a conductive situation for the well-organized process of the company. Though, the
political services have also destructively affected the real business in Australia. It customary a

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set-blow when the government of the country currently introduced a crusade that meant to chunk
the established businesses such as Woolworth from eradicating the small retailer over biased
rivalry for the market. The Competition and Consumer Commission of Australia and New
Zealand have greatly exaggerated the performance of the corporation (Mialon et al., 2017).
Economic Factor: The growth rate of GDP in the country Australia is better than former OECD
republics. Its normal growth rate is 0.2% that represent that the country is developing in a
effective manner. It enhances the purchasing power of the consumers that affected overall sales
and revenue of the corporation to the definite scope. Furthermore, the economic gauge such as
variation in the rate of exchange of current as well as wearying of Australian dollar has
unfavorably pretentious the worldwide trade processes of Woolworth (Carey, Parker and Scrinis,
2017).
Social Factor: the country Australia has attain developed social as well as communal growth so
the motive of current tendencies within the customers that indicates that they prefers extremely
socially responsible companies as well as y undertaking the societal initiative, the retailers for
instance, the Woolworth create significant impact over its consumers in an effective manner
(Widener et al., 2017).
Technological Factor: the character of technology feature also affected the industry of retail as
well as Woolworths in specific is important as this can be recognized from the detail that
Woolworth has also measured the request of the green freezing equipment so that the
unpreserved goods can be properly stowed for the longer period of time (Nijssen, Schepers and
Belanche, 2016).
Environmental Factor: the environmental factor also created great impact over the performance
of the company as well as the complete retail business in specific crossways Australia. The petrol
and winemaking business of Woolworth are affectation contrary impact on the recital of the
environment condition that affected the effectiveness presentation in such commercial zones of
the organization. It also provides an opportunity to the company in which they can able to target
its consumers in sustainable manner that will enhance string bond among the consumers and
company in an effective manner (Zulqarnain, Zafar and Shahzad, 2015).

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Legal Factor: the Lawful aspect in the form of carbon tax also executed athwart the republic has
also created great impact on the retail industry as well as the Woolworth in specific. The
valuation of the business signify that the guideline by the Australia Competition as well as
Consumer Commission and New Zealand Commerce Commission have exaggerated the
processes of the organization athwart the economy. The rule imposes by the government to
function in reasonable method has also pretentious the presentation of the corporation as it
prerequisite to acclimate the fair-minded rule in execution its corporate processes (Pulker et al.,
2018).
Industry Analysis
In edict to analyze the Australian industry, porter five forces technique is used that are explained
in the following point:
 Bargain Power of Buyer: the bargain influence of consumes in respect to the retail trade
in Australia is meaningfully extraordinary due to the main reason the larger sum of
companies and retail stores are obtainable in the market that provide the elementary
matters of the requirement to the customers. The customers have broader range if option
as well as the swapping price is also squat that attract the customers towards the low price
produce in an operative and well-organized way. It enhances the level of pressure among
the industry to keep their prices low to attract and retain its consumers for extended era of
time (Chepulis et al., 2018).
 Bargaining power of Suppliers: in edict to analyze the retail business of Australia, it has
been found that it is extremely focused as well as there is convinced large companies that
have great concentration over the mainstream of the market share. It augments the snip
control of the deals to the convinced extent that represent that the bargain control of
suppliers is reasonable in the business to the certain extent (Carey, Parker and Scrinis,
2017).
 New Entrants Threat: the risk of new applicants in such business is very stumpy due to
the main reason there is huge requirement of investment for the new companies while
entering in the market. It resist r stop the new or small companies to enter in such
competitive market. The big companies enjoy its existence in the market that resists the

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small or new companies to compete such strong or giant companies in the market.
therefore, the menace of novel applicants in such business is low;
 Rivalry among the Existing Firm: most of the giant companies such as Asda,
Wesfarmers and other companies have spread its roots in the market in strong manner. It
creates challenge for the Woolworth to compete such competitor in the market. It
enhances the level of competition in the market. such giant companies competing each
other for larger market share that enhance intense competition in the industry to the
certain extent (O’Mahony and Lobo, 2017)
 Threat of Substitute: the menace of substitute in such business is stumpy due to the key
reason the selling daily throwaway goods are greatly vital as well as their feasting on the
everyday basis is also highly essential. The alternative of such product are not available
therefore, the menace of such supernumerary is stumpy (Shane, Murad and Freeman,
2018).
Conclusion
It can be concluded from the above analysis that macro environment is full with the opportunities
as well as threat. Most of the companies are greatly affected from the fluctuation of the market.
One of the leading companies Woolworth is also significantly exaggerated from the activities of
macro situation. The steady political environment provides a prospect to the corporation to grow
in the marketplace as well as the fluctuation in the economic currency enhance the glassy of
menace for the corporation to the definite scope. Australia is highly developed country and has
great growth of GDP while comparing with the other countries. The company has expanded its
business in the international market more efficiently that made them possible to grow in the
market. Australia provides threat to the company as well. Furthermore, the industry of the
republic is highly competitive. The main participants are Asda, Wesfarmer and other
supermarket companies that exaggerated the income of the corporation. Furthermore, the
negotiating control of dealers is moderate as well as the threat of substitute that represent the
positive environment for the company to grow. However, the bargain influence of the customers
is high due to low swapping cost that needs to be focused by the business to nurture in the
marketplace.

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References
Carey, R., Parker, C. and Scrinis, G. (2017) Capturing the meaning of “free range”: The contest
between producers, supermarkets and consumers for the higher welfare egg label in
Australia. Journal of rural studies, 54, pp.266-275.
Carey, R., Parker, C. and Scrinis, G. (2017) Capturing the meaning of “free range”: The contest
between producers, supermarkets and consumers for the higher welfare egg label in
Australia. Journal of rural studies, 54, pp.266-275.
Chepulis, L., Mearns, G., Hill, S., Wu, J.H., Crino, M., Alderton, S. and Jenner, K. (2018) The
nutritional content of supermarket beverages: a cross-sectional analysis of New Zealand,
Australia, Canada and the UK. Public health nutrition, 21(13), pp.2507-2516.
Mialon, M., Swinburn, B., Allender, S. and Sacks, G. (2017) ‘Maximising shareholder value’: a
detailed insight into the corporate political activity of the Australian food industry. Australian
and New Zealand journal of public health, 41(2), pp.165-171.
Nijssen, E.J., Schepers, J.J. and Belanche, D. (2016) Why did they do it? How customers’ self-
service technology introduction attributions affect the customer-provider relationship. Journal of
Service Management, 27(3), pp.276-298.
O’Mahony, B. and Lobo, A. (2017) The organic industry in Australia: Current and future
trends. Land Use Policy, 66, pp.331-339.
Pulker, C.E., Trapp, G.S.A., Scott, J.A. and Pollard, C.M. (2018) What are the position and
power of supermarkets in the Australian food system, and the implications for public health? A
systematic scoping review. Obesity reviews, 19(2), pp.198-218.
Shane, E., Murad, M.W. and Freeman, S. (2018) Factors influencing price premiums of
Australian wine in the UK market. International Journal of Wine Business Research, 30(1),
pp.96-116.

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Widener, M.J., Minaker, L., Farber, S., Allen, J., Vitali, B., Coleman, P.C. and Cook, B. (2017)
How do changes in the daily food and transportation environments affect grocery store
accessibility?. Applied geography, 83, pp.46-62.
Woolworth. (2019) About Us [Online]. Available from:
https://www.woolworthsgroup.com.au/page/about-us/our-brands/supermarkets/ [Accessed on
31/07/19]
Woolworth. (2019) Investor Information [Online]. Available from:
https://www.woolworthsgroup.com.au/page/investors/ [Accessed on 31/07/19]
Zulqarnain, H., Zafar, A.U. and Shahzad, M. (2015) Factors that affect the choice of consumers
in selecting retail store, for grocery shopping. International Journal of Multidisciplinary and
Current Research, 3(1), pp.1167-1172.
Conclusion