Swinburne University: Digital Business Strategy for Woolworths Report

This report provides a comprehensive analysis of Woolworths' digital business strategy in the face of increasing competition from Amazon in the Australian grocery market. The report identifies two key issues: poor customer service on online platforms and a decreasing brand reputation. To address these challenges, the report recommends two primary solutions: the implementation of new customer service portals and the launch of an individually labeled product range. The report also includes an implementation plan, detailing the steps, timelines, responsibilities, and cost associated with each solution. Furthermore, it outlines a control and evaluation framework to assess the effectiveness of the proposed strategies, emphasizing the importance of customer feedback and ongoing monitoring. The report concludes by highlighting the significance of adapting to digital business trends and maintaining a strong brand presence to ensure Woolworths' continued success in the competitive market.

Running head: DIGITAL BUSINESS
Digital business
Name of the Student
Name of the University
Authors note

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DIGITAL BUSINESS
Table of Contents
Current Scenario.............................................................................................................2
Important Issues.............................................................................................................2
Issue 1: Poor Customer Service in online Platforms..................................................2
Issue 2: Decreasing Brand reputation........................................................................3
Recommended Solutions................................................................................................3
Solution 1: New customer service Portals.................................................................4
Solution 2: Launching individually labelled Product range.......................................5
Implementation Plan......................................................................................................6
Control and Evaluation................................................................................................10
Cost..............................................................................................................................11
Timeline.......................................................................................................................11
References....................................................................................................................13

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Current Scenario
The competition in the Grocery stores and Supermarket industry of Australia has been
fiercely increasing. With the presence of nearly 2000 business players, the market is now
almost mature and saturated one. Woolworths, as a supermarket chain, occupies almost
37.5% of total market share in grocery and Supermarket business (woolworths.com.au 2019).
Recent circumstances are not in favour of this company as 'Amazon fresh' is eating half of the
market share in this industry (amazon.com.au 2019). This company is becoming popular
rapidly posing a potential threat in the business of Woolworths. This report aims to identify
the crucial issues and plans possible solutions for them.
Important Issues
The entry of Amazon in the markets of the Australian grocery industry is not a good
sign for Woolworths. The industry that has been ruled massively by Woolworths is now
being challenged. There are several issues that worked behind the decreased sales number of
Woolworths and increased popularity of Amazon. Two most important problems are stated in
this part.
Issue 1: Poor Customer Service in online Platforms
Woolworths has been following the traditional way of marketing for a long time.
Recently it has started to change its strategies regarding the present market demands and
trends. The problem with this context is that if one compares the customer service aspects of
Amazon and Woolworths, one can find the problem evidently. There is a huge gap between
the customer service qualities of Woolworths online and Amazon (Youl 2018). Customer
satisfaction is the most important aspect of any business in present days. All the business are
changing their strategies and making them more customer-oriented. Woolworths has tried to
do the same but has failed in many instances. The company has not been successful in

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building their online customer relations properly. As most of the consumers are tending
towards online buying, this is affecting the profit numbers of the company. Consumers are
showing more interest in the product of Amazon, who is providing quality products at a lower
price and better customer services.
Issue 2: Decreasing Brand reputation
Brand equity is the base of growth and customer retention. A company need to be
careful about their brand reputation in order to maintain profits. Woolworths’ reputation is
decreasing after Amazon entered the Australian market (Chaffey, Hemphill and Edmundson-
Bird 2015). Amazon fresh is being more appreciated by the consumers than the products of
Woolworths.
There could be a number of reasons behind this scenario. The interrelation between
customer satisfaction and brand equity need to be assessed here. Amazon has captured the
market of Australia through its price range and customer relations. The varied range of
products and online platform made this company website a one-stop destination for the
customers. This is casting an impact on the brand reputation of Woolworths in Australian
markets. Therefore, to increase the popularity of this company, there need to be some out of
the box solution.
Recommended Solutions
Woolworths is one of the most trusted brands in Australia in its sector. This company
has its separate customer’s base that it has built over a long period of time through its product
quality and price. The online business giant Amazon is threatening the position of
Woolworths in Australia through its brand popularity and customer service qualities. It is
quite evident that Woolworths must give importance to improving its customer service
aspects and brand reputation through strategic solutions.

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Solution 1: New customer service Portals
Amazon has constructed its business solely on online platforms. This has increased
the popularity of the company as it is more convenient for the customers to shop and get their
products at their doorstep (Matt, Hess and Benlian 2015). Woolworths also has its online
website through which it reaches directly to its customers. The company have to build its
online services more effectively in order to compete with Amazon.
Consumer decision making process
The importance of customer service improvement could be justified through the
theory of customer decision making processes. Customer’s behavioural approach while
buying a product depends on a number of things. In digital business, the customers are at the
centre of every step. The Internet has provided huge power to the consumers, and there are
more than a thousand options open to their fingertips. Therefore, their decision making in
influence by the services and communications they get (Hess et al. 2016). A customer would
compare the price, quality and individualized touch before buying a product. The online
business market is largely depended on information and connection. Any brand could only be
successful in digital business if they put importance in customer services.
It is recommended for the company Woolworths to develop a separate portal in their
online business website, where they could perform multiple tasks related to their customer
relations.
 This portal would have more specific details of the products other than their price and
quantity. These other details might include the uniqueness of the product and its
health and nutrition benefits.

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 Through this portal, the customers could directly talk to a customer representative
who would personally suggest the best options to the customers of a specific food or
drink type in their budget.
 Researches have proved that customers decision making of buying a product is least
influenced by the price if they get quality product and services (Holotiuk and
Beimborn 2017).
 Woolworths have to make sure that better negotiations are done with their suppliers in
order to reduce the product cost wherever possible.
 The portal would have a section where the customers could share the feedback about
their online buying experience with Woolworths and important issues need to be
addressed immediately through communication.
The company website is not sufficient as this only displays product details and no
specific direct connection with the customers. Therefore, designing a new portal in the
company website that would be used to interact with the customers and collect their feedback
would be an innovative way out.
Solution 2: Launching individually labelled Product range
In order to extend the company growth and maintain brand reputation, the company
could think of launching individual marked products. This product could include packaged
foods and drinks. The products would be bought directly from the suppliers and processed in
the company warehouses. Primarily the products would be launched only in online platforms
and would be sold in low-profit margins. By adopting this solution, the company would
manage to reduce manufacturing cost and increasing customer trust through a quality
product.
Systems thinking

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The theory of system thinking involves the analysis of interconnection between the
parts of a system. This approach of business is opposite to the traditional models of dealing
and breaks them down to balance the process newly. System thinking process promotes the
new reinforcements that have to be backed up with a balanced process.
This approach could be applied to evaluating the overall performance of Woolworths
in recent years. The company has been working according to the traditional way in its
marketing approaches. While the brand reputation was linked with its product qualities and
services, Amazon has started capturing the market in Australia through its innovative ways.
The company have to balance its online marketing along with brand reputation (Kane et al.
2015). For this, it could think of launching a new product range that would individually be
labelled under Woolworths.
The phenomenon of brand reputation is depended on customer satisfaction, brand
equity and product quality. These are all interrelated and could be balanced at once.
Woolworths is a known name in Australian supermarkets. It only has to be more innovative
in its approach. This new product range would be designed, keeping the quality and price
context on the mind. Balancing these two aspects of marketing is not an easy task. Besides,
the delivery system has to be up to the mark so that the customers could get these products on
or before time (Leischnig, Wölfl and Ivens 2016). Therefore, it has to be done through
extensive market research and environmental analysis. If the company could please the
customers with its new products and services amendments, it would definitely revive its
brand reputation.
Implementation Plan
Solution 1:
Steps to be Taken Timespa Objective Responsibility

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n
Initiating the idea of
new portal designing
and deciding new
inclusions
2 days  To map the idea
 To decide what
would be the part of
this new portals
Marketing officer and
their team
Chalking out the
budget
3 days  To decide the
required cost of
portal designing
 To decide the cost of
new appointed
customers
representatives
(Cusumano, Yoffie
and Gawer 2019)
 To assess the cost of
training
Finance officer
Selecting
professionals for the
portal designing
5 days  To assign the skilful
IT professional from
an internal or
external unit of the
company
IT and Marketing
department
Selecting the
customers
representative and
training them
7 days  To select the
appropriate
representatives
 To train them
HR department

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according to
company’s need
Designing the portal 15 days  Building the portal
with the help of
professionals
IT department
Launching and
Promoting it.
30days  Informing customers
through online and
offline information
sharing
 To encourage the
customer in using
this new facility in
company’s website
Marketing department
Solution 2:
Steps to be Taken Time period Objective Responsibility
Doing market research 15 days  To understand
the need and
trend of the
market
 To ensure the
nature of
labelled
R&D team,
the
Marketing
team

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products
 To understand
the supplier's
condition
Designing and
producing new
products range
25 days  Selecting the
suppliers
 Managing the
production
 Product
distribution
 Delivery
measures
Production
manager
Operational
manager
Marketing and
sales manager
Launching the
products online
1 day  To introduce the
products to the
online buyers
Marketing team
IT team
Promotions and
marketing
90 days  Increasing
awareness and
brand equity
 Promoting the
products
through social
media platforms
as well as the
websites
Marketing team
and Sales team.

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Control and Evaluation
Evaluation and control are an integral part of any business as they are effective in
identifying the errors and standard deviations. According to Nylén and Holmström (2015),
any plan needs to be evaluated regularly after its implementation to understand its
effectiveness. According to the evaluation, the plan could be revised and re-implemented.
The evaluation and control of the portal designing would be done after one month.
The evaluation would be done through the feedbacks and comments of the customer who
have visited the site. Another medium of evaluation could be designing a feedback form and
requesting the customers to fill it (Kontić and Vidicki 2018). Both of the evaluation tools
would be useful to understand how customers are responding to this new initiative and how
satisfied they are with their experience with Woolworths online. After the evaluation, more
initiatives in customer services would be taken if the results are not satisfactory. The control
and evaluations would be the responsibility of the marketing and sales department of the
company.
For the newly launched products of Woolworths label, the evaluation program would
be executed after each month. The evaluation would be done on the popularity of the product,
rejuvenation of brand reputation and new price sets. The marketing manager department
would work for evaluation of the new products. The customers who visit online websites for
buying the new products would be asked to rate the products according to their quality and
value. Both good and bad feedback would be evaluated properly. If necessary, new changes
in product prices and presentation would be done accordingly. The products would be later
launched in the offline stores of Woolworths if they become popular online.

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Cost
Budget is a crucial part of any change-making. As Woolworths is going to implement
two major changes in its online business strategies, it needs to have an appropriate budget
structure to avoid future financial confusions.
Budget for the new portal
Process Expenditure
Portal designing $300
Launching $50
Promotion $200
Total $550
Budget for the new product range
Process Expenditure
Planning and designing $100
Product manufacturing $ 2000
Promotion $1000
Delivery services $300
Total $3400
Timeline
Timeline for Portal launching
Process
Duratio
n
Portal planning One day