Woolworths: A Case Study on Organizational Development Strategies

This case study provides an in-depth analysis of Woolworths' organizational development strategies, focusing on changes implemented and the internal and external factors influencing the company. It begins with an overview of Woolworths' history and development since its establishment in 1924, highlighting key milestones such as expansion, acquisitions, and the introduction of innovative services. The analysis covers changes made to achieve strategic priorities, including customer-centric approaches, pricing policies, and online operations. The internal analysis uses the SWOT framework to identify strengths, weaknesses, opportunities, and threats, while the external analysis employs the PESTLE framework to assess political, economic, social, technological, legal, and environmental factors. The report concludes with recommendations for Woolworths to enhance its competitive position in the Australian retail market. Desklib offers a wealth of similar case studies and solved assignments for students.

Running head: ANALYSIS OF ORGANIZATIONAL DEVELOPMENT
ANALYSIS OF ORGANIZATIONAL DEVELOPMENT
Name of the Student
Name of the University
Author Note

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ANALYSIS OF ORGANIZATIONAL DEVELOPMENT
Executive Summary
The report is based on the analysis of the various strategies that are employed by an
organization named Woolworths for the purpose of developing the processes and
implementing changes. Woolworths is an Australian retail organization and a leader in the
market. The strategies that have been formulated and implemented by Woolworths in the
market are discussed. The changes that have been made in the strategies have also been
analysed in the report. The internal and the external factors that affect the organization are
discussed. The report is concluded with recommendations that are provided to Woolworths to
improve its competitive position.

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Table of Contents
Introduction....................................................................................................................3
Development of the organization...................................................................................3
Changes made in the organization.................................................................................5
Internal analysis of the organization using SWOT framework......................................6
External analysis of the organization using PESTLE framework..................................7
Strategies used by the organization to implement changes............................................9
Role of the organizational structure in change.............................................................10
Conclusion....................................................................................................................10
Recommendations........................................................................................................11
References....................................................................................................................12

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Introduction
Woolworths is an Australian organization that operates in the retail area of business.
The company operates more than 900 stores in Australia and has a large team of 115,000
employees in the distribution centres, the stores and the support offices. The organization is
known in the industry for providing the customers with the highest level of services and wide
range of products as well. Woolworths works closely with the various Australian farmers and
growers so that they are able to ensure that best products are supplied to the consumers.
Woolworths offers fresh vegetables and fruits that are sourced directly from the farmers to
the customers in its stores. The organization has gained a position in the industry as one of
the most innovative retailers. The company understands its consumers who look for the new
and simpler ways to shop. Woolworths has also started its online operations which are helpful
for the consumers to place orders from the comfort of their homes (Woolworths.com.au.,
2018).
The report will be mainly based on the various organizational development activities
that have performed by Woolworths and the issues that have been faced by the company. The
changes that have been implemented in the organization will also be analysed in the report.
Development of the organization
Woolworths was established in the year 1924 on the 5th of December. The founder of
the company was Percy Christmas. The company has been showing immense growth in the
Australian retail industry right from the time of its establishment. The company started
growing its operations and forming a chain of its stores from the year 1927. The management
did not start the business thinking of building a chain of stores. However, they were able to
extend their operations in New Zealand in the year 1929 and opened around 16 stores all
across Australia. The next phase of development and growth of Woolworths was related to

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the advertisement related operations that were conducted by the company (Alvesson &
Sveningsson, 2015). The company started placing its advertisements in various new and
improved tools that were introduced in the year 1937. The organization placed its
advertisement on the radio which was a part of the new phase of development. Woolworths
had started growing and the warehouse space of the organization was also increasing in the
process. The company than opened its self-service stores in the year 1955 and further
completely changed the shopping experience of the various loyal customers. The first self-
service store of the company was located in Sydney. The organization further opened its
dedicated stores only for food in the year 1957 (Bertram, Blasé & Fixsen, 2015). The stores
mainly offered fresh fruits and vegetables to the various customers. The fast expansion of
Woolworths led to the opening of the 300th store of the organization. The organization had
experienced unexpected growth within just four years of its operations in the market from the
year 1955 to 1959.
In the year 1960 Woolworths became the first retailer of the country to have
nationwide operations. The organization had become a huge brand after the year 1960 and
was finally successful in achieving its major objective that was related to provide value and
quality to the various consumers. The company was further able to expand its operations and
become the largest retailer of drinks in Australia. The organization started launching its own
brands from the year 1973 which was named “Own brands”. The offerings of the products of
Woolworths were improved further and were produced with the name of “Woolworths
Select” (Bolden, 2016).
The development of Woolworths also consisted of many important acquisitions by the
organization, which included the acquisition of Dick Smith Electronics in the year 1981, the
acquisition of Safeway in the year 1985. The organization was able to extend its operations in
many other areas of Australia within a short span of time which was the major development

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that was shown by Woolworths in the various years of its operations in the industry (Cândido
& Santos, 2015).
Changes made in the organization
The major goal of Woolworths has been to achieve the five major priorities which are,
 Building the team and culture of the customers and the stores.
 Generating momentum in sales of food that is sustainable in nature.
 Evolving the drinks related business so that more convenience and value can
be provided to the customers.
 To empower the portfolio business and pursue the strategies so that
shareholder values can be delivered.
 To become a lean retailer with the help of systems excellence and end-to-end
process (Chumg et al., 2016).
The company has aimed at fulfilling these objectives by building a retail team listens
to the concerns of the customers, the suppliers and the various members of the team.
Woolworths has always aimed at providing the maximum levels of satisfaction to the
customers and thee organization has put them at the highest priority as compared to the other
aspects of organizational operations.
Woolworths has been fighting a serious price war with another major retail
organization of Australia named Coles. The company had to make major changes in its
pricing related policies to provide the best products to consumers at the least prices. In the
year 2015 Woolworths announced new strategies which were aimed towards winning the
trust of the consumers. The company formulated a three-year strategy to increase the number
of customers related to Woolworths Food Group (Davidson, 2017). The strategy included the
major steps like, increasing the share that the customers spend in buying food. This was done

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by achieving all the major objectives that were related to the improvement of aspects that are
related to the shopping experience of the customers. The organization is placing the
customers at the top of everything that they plan and do. The strategy is based on the lower
prices of products related to food that are offered to the various customers. Woolworths aims
at beating its major competitors with the help of their lower prices and providing similar
quality products (Frank, Penuel & Krause, 2015). The online operations of Woolworths have
also been a major change in their activities. The strategy of the company was focussed on
three major principles which are,
 Improving the core offerings so that consumers of the company are put first.
 The innovative activities that are undertaken to meet the needs of the
customers.
 Creation of the value of customers with the help of lean retail model.
Woolworths is focussed on creating a new value and pricing related strategy so that it
is able to neutralise the impact of Aldi and Coles on its sales. The various measures include
better ranging of products, targeting the customer offers and further using an improved and
revised system of loyalty. The own products of the company have further played a major role
in the competing with the other retail organizations in Australia. The strategy of Woolworths
consisted of the rebalancing of the capital expenditure between the existing stores and the
new stores of the organization (Goetsch & Davis, 2014).
Internal analysis of the organization using SWOT framework
Strengths – The company is a pioneer and one of the oldest retail trading
organization in the market. Woolworths is the market leader in the retail industry of
Australia. The leadership position of the organization has helped in exploiting the potential of

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the entire market in which it has its operations. The resources that are required for the
successful operations of the company are available and are used to the fullest capability.
Weaknesses – The growth related strategy that has been formulated by Woolworths
has been one of the major weakness that has been faced by the company. The external
conditions of the company further affected the ability of Woolworths to dominate the
Australian retail market (Haffar et al., 2017).
Opportunities – The retail industry of Australia has shown huge potential of growth
and various factors that are related to computerisation, changes in the lifestyle of the
consumers and advancements in the supply chain of the organizations have provided huge
opportunities to Woolworths. The organization is also aiming at adopting the theory of multi-
option retailing which helps in coping up with the changing needs of the various consumers.
Threats – The threats that are faced by Woolworths are mainly from the high levels
of competition that are provided by major retail organizations like Coles. The prices of the
products that are offered by Woolworths are also affected by the huge competition in the
industry. The price control related factors by the government have also posed major threats to
the organization (Hammer, 2015).
External analysis of the organization using PESTLE framework
Political factors – Woolworths is a recognisable name in the Australian retail
industry, which mainly fulfils the needs of the customers with the help of different retail
outlets. The political environment in the country further affects the performance of
Woolworths and the prices that are offered to the consumers. The political condition of the
countries has been able to influence the operations of the various retail organizations that
operate in Australia. The Australian retail market is comparatively stable as it is a developed

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country. This helps Woolworths in carrying out its operations in a successful manner
(Kuipers et al., 2014).
Economic factors – The different economic factors of the country and rates of
unemployment have adverse effects on the profitability of retail organizations. This further
affects the financial performance of the country which can lead lower amount of sales. The
conditions of Woolworths have faced serious issues after the economic recession period that
had occurred in the in the year 2008. The crisis in the financial environment has further
affected the overall sales of the company. The retail industry of Australia has however
maintained much more stability as compared to the other areas of the world, which supports
Woolworths in operating in the environment profitably (Li, S., & Chen, 2014).
Social factors – The customers of Woolworths are considered to be the major source
of the revenues that are earned by Woolworths. The social factors are thereby related to the
needs and the demands of the customers who belong to the various parts of the society. The
organization has also further introduced new methods related to the fulfilment of needs of the
consumers.
Technological factors – The advancement in technologies have led to the usage of
new and improved technologies by the organization for the purpose of improving the services
that are provided to the customers. The new technologies have also helped in the better
management of the inventory of the company. The self-service checkout related facility is
another major change that has taken place in the technologies used by Woolworths
(Niedderer et al., 2016).
Legal factors – The policies that are related to recruitment and taxation have also
been a major part of the operations of Woolworths in the Australian retail market. The license
related requirements of the company are important factors that affect the revenues.

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Environmental factors – The ways by which the external environment is affected by
the operations of Woolworths are a major part of the environmental factors. Woolworths has
invested the various resources in the process of minimizing their carbon footprint on the
environment (Nilsen, 2015).
Strategies used by the organization to implement changes
Woolworths has set many short term and long term goals to reach the objectives that
have been set by them. The short term goals are mainly related to the products that are
offered by Woolworths. The quality of the products and the prices are a part of the various
short term goals of the organization. The improvements that can be made in the existing
products of the company are also a part of the short term goals. The long-term goals of the
organization are related to the social development and the focus that the organization has on
the environmental needs. The customers are given highest priority by the company and the
strategies are formulated based on the needs and demands of the customers. Woolworths has
used various generic strategies for the purpose of achieving its goals (Petersen, Premchandran
& Clayton, 2017). The organization has started focussing on the multi-retail business style as
has been discussed earlier. The organization further differentiated itself and has undertaken
environmental approaches towards the achievement of goals. The major changes that have
been made in Woolworths are related to the pricing and the process of decision-making that
is followed in the company. The company has been trying to formulate strong and effective
strategies to compete with the major competitors in the retail industry (Prestwich & Kellar,
2014). The strategies have shown immense change in the years of its operations in the retail
industry. The pricing policies have been altered and the company is now providing high
quality products in lower prices to compete with the organizations like Coles. The decision-
making process is being improved so that the major decisions can be taken within short
periods of time (Waddell et al., 2016).

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The internal growth related strategies of the company are also being changed so that
Woolworths can retain its operations in the various markets in a profitable manner. The
multiple locations of the stores of Woolworths have been a major reason behind the huge
growth of the company within a short span of time. The organization has been immensely
successful in penetrating in the new market areas and increase their revenues and sales in the
process. The costs related to production of the company has been decreased by changing the
technologies and methods that were being used previously (Soliman, 2017).
Role of the organizational structure in change
The hierarchical organizational structure is followed in Woolworths where many
levels of management exist and the subordinates are answerable to the higher authorities for
their activities. The decision-making process in the hierarchical organizational structure is
quite slow as the decisions require the consent of various levels starting from the managers to
the lower level employees. The structure of an organization affects the changes that are
implemented in the various processes. The change management becomes quite difficult for
organizations in which many hierarchical levels are present. This is a major issue that is faced
by Woolworths in the industry when changes are implemented in the processes. The change
management has therefore a complex process for Woolworths (Tam & Gray, 2016).
Conclusion
The report can be concluded by stating that Woolworths has been a successful
organization in the Australian retail market and this has given the company the topmost
position in the industry. However, the organization has gone through various changes in its
years of operations to sustain its operations in the retail industry of Australia. Woolworths

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has made major strategic changes which have helped in the organization in gaining revenues
in the highly competitive retail environment of Australia.
Recommendations
 Woolworths can aim at applying the method of market development to
maintain its competitive position in the retail market of Australia. This is
related to building the strategies based on its strengths and the skills of the
employees.
 The internal growth strategy can also be recommended to Woolworths so that
it can compete with other organizations based on the development of its
products.
 The third strategy that can be implemented by Woolworths is related to
innovation. The organization needs to search for fresh and new ideas that can
be helpful in attracting more consumers. This will further help the company in
increasing its customer base and increase its revenues.