Competitive Strategy Analysis: Woolworths and Strategic Tools

This essay provides a comprehensive analysis of competitive strategies, focusing on the application of PESTEL, Input/Output, and Porter's Five Forces models within the context of the Woolworths supermarket retail company. The introduction defines competitive strategy and its importance in achieving a competitive advantage and increasing ROI. The essay then delves into the PESTEL model, evaluating the external environment and highlighting the impact of political, economic, social, technological, environmental, and legal factors on Woolworths. The Input and Output model is discussed as a strategy development tool, illustrating its use in evaluating inputs, outputs, and required processes. Finally, the Porter's Five Forces model is examined, demonstrating how Woolworths uses this tool to assess competitive rivalry, the threat of new entrants and substitutes, and the bargaining power of customers and suppliers. The conclusion summarizes the key findings and emphasizes the importance of these tools in achieving sustainable business success and remaining competitive in the marketplace.

COMPETITIVE STRATEGY
INDIVIDUAL ESSAY
3 COMPETITIVE STRATEGY DEVELOPMENT TOOLS AND HOW THEY
ARE USED IN BUSINESS: PESTEL MODEL; INPUT AND OUTPUT MODEL;
AND PORTER’S FIVE FORCES MODEL
DRAFT
Table of Contents
1.0
1.0 INTRODUCTION ....................................................................................................................2

2.0 EVALUATE PESTEL MODEL (EXTERNAL ENVIRONMENT ANALYSIS)...............3
3.0 INPUT AND OUTPUT MODEL.........................................................................................5
4.0 PORTER’S FIVE (5) FORCES MODEL.............................................................................5
5.0 CONCLUSION .........................................................................................................................8
6.0 REFERENCES .........................................................................................................................9
1.0 INTRODUCTION
Competitive Strategies means a plan of action which is been drawn by a particular
company to order to achieve competition advantages in a competitive market industry (Kaya
2015). The main aim is to create a position in the market place and hence to increase ROI
(Return on Investment). In present report the Woolworths Supermarket retail company is the
example for applying three different tools and techniques to compete with the market rivals:

PESTEL, Porters Five Forces model and the Input/Output model. These are some of the
marketing tools which can affect business growth, help to analyse competitors, and aid to
achieve targets by setting strategies to overcome competitors.
2.0 EVALUATE PESTEL MODEL (EXTERNAL ENVIRONMENT ANALYSIS)
PESTEL analysis is a tool which is used by the company to monitor the external
environment in an effective manner and through this tool business can compete against its rivals
by using different methods and techniques and also innovating the products or service
(Woolworths Limited SWOT & PESTLE analysis 2019). Hence through PESTEL analysis
Woolworth Ltd. faced many challenges in the competitive macro environment. Factors which
have impacted this company are discussed below:
Political factor: This factor is not controllable and it is affecting the business in massive
way (Mathooko and Ogutu 2015). So this company must operate in Food and Staples Retailing
by following government rules and regulations and made dynamic changes into the external
distribution environment. Hence the company diversified the risk in various countries through
which its retailing stores gained success. Before entering into the market place Woolworth
Company make sure that they follow all the legal ways to expand its business and all government
rules should be followed in appropriate manner.
Examples: Woolworth should follow legal requirements concerning corruption while
operating in Food and Staples retailing area, this very much necessary while providing such
products and services to the customer of Australia. Trade regulations and tariffs should be
favourable for trading partners, so in this sector company should work according to the rules and
regulation of government of countries whichever place they are trading.
Economic factor: Micro-environmental factors include, saving rates, and foreign
exchange rates which affect demand and investment in an economy. Such factors have certain
advantages and disadvantages which affect the growth of the business. (Mkude and Wimmer
2015).
Example: The major factors that sometimes hinders the self interest of an organisation
expanding in that market are lacklustre spending of consumers specially in retail marketplace,
and with easy regulations in retail sector enable new market entrants e.g. Woolworth that create
hazardous effects for them to remain always competitive in marketplace.

Social Factor: The impact of social factors includes the cultures and traditions which
played important role in Woolworth Ltd. This affected the customer as well as market message
for Food & Staples retailing sector. So the leaders of this company should analyse PESTEL for
effective growth.
Example: While entering into new marketplace organisation have to face the effects of a
poor relationship with the suppliers – and for that they have to change in their organisational
culture, which takes huge cost and time. In respect of Woolworth Ltd they build various kinds of
strategies and tactics to lessen down the effects and get optimum level of outputs.
Technological factor: This is an important part of the PESTEL because through
technology various distributions are done. Transportation need to be very effective by the
company so that customer gets the product or service at right place and at correct time.
Example: The latest features introduced by Woolworth Ltd. is online shopping
applications through which customer can avail the benefits.
Environmental and Legal factor: These two factors affect company growth as well as
reduce the sale of products or services (Ryńca 2016) due to new market entrants and new
business which affect other competitors. So this company’s leaders can analyse PESTEL in such
way that they can survive in the competitive market place
Example: an organisation while entering into the new marketplace have to invest their
resources in energy efficiency and carbon initiatives so that they build consumer loyalty in
context of Woolworth Ltd. There are some recommendations that they have to follow strict and
mandatory codes by NFF.
3.0 INPUT AND OUTPUT MODEL
It is mainly a strategy development tool which is considered as a functional graph that
further evaluates outputs, inputs and other required processing which is required in
transformation of output and input. With the help of this model organisation can effectively able
to evaluate their input in a combined level along with transformation. It is important to acquire
necessary required output. This will effectively aid organisation to ensure their smooth activities
before and after the transformation process. This model refers to interdependence between social
and economic sectors. This may have a positive effect on the economy. Hence this company is
also working effectively for growth and more over it has expanded its business online and now is

planning to open other stores in Australia so the company require input and out model which the
leaders can apply to labour and other products required by the company which aid to increase the
work. By using that model, organisation can evaluate the flow of money in an economy that
directly impacts on their business and their major activities by connecting with other industries
(What is the Input-Output Model? 2019)
Example: In context of Woolworths supermarket, organisation can undertake their
strategy development model as to further address and issues that are being faced by company in
the process of hiring. It has been further analyses that, large number of technical people get
effectively hired in organisation during last past one year. It turns out to a complex process as
organisation face many problmes in training and recruitment, as it is costly as well as time
consuming. Thus, it HR team of organisation decises to have group of individuals together along
with all-encompassing experience of hiring fresh candidates, those who can effectively able to
frame input-output model for the purpose of hiring. Mentioned below there is a model which is
developed by them:
llustration 1: Input Output Model For Hiring Process In WOOLWORTHS
(Source: Input Output Model For Hiring Process In WOOLWORTHS, 2019)
4.0 PORTER’S FIVE (5) FORCES MODEL
Porter Five force analysis is a strategical as well as a analytical tools which is largely
considered by large base of organizations all around the globe in order to effectively attain

comprehensibility. This strategy include development tool such as total of 5 forces. In this, 3
forces concern to threat of competition, horizontal rivalry, threat of substitutions and threat of
new entrants in a business organization. While if it is considered with other 2 forces, it pertain to
bargaining power of customers and bargaining power of suppliers. With the effective
undertaking of all these forces a business organization can effectively able to frame decisions in
context with expansion, growth, new product launch etc. In addition with this, it will help
company to evaluate attractive and unattractive forces in within a business sector. Thus, with the
regular undertaking of these forces company can effectively able to evaluate change that takes
place within these 5 forces as to these may lead towards affecting productivity of company.
Example: Taking the example of Woolworths, it can be said that the management of this
company carries out Porter 5 force analysis before taking key decisions such as enhancing the
product portfolio or using diversification. The competitive rivalry within retail sector is high
which helps the management of Woolworths to come up with effective strategies that have the
ability to gain the attention of population of Australia. Furthermore, threat of new entrants
within the sector is low which provides the management of this chain supermarket with the idea
that it can launch new and innovative products in market place at reasonable prices to enhance its
profitability and sales. The threat of substitutes in retail sector is immensely high which helps
the entity to realize that there is a need to constantly update the product features and segments to
cater to demands of people desirably. Further it has been evaluated that, bargaining power of
buyers within retail sector is high, It offer assistance to Woolworths to undertake use of well
efficient strategies as to make economic purchase of those commodities that are offered in
supermarket. While, bargaining power of suppliers is low for Woolworths as this company is
mainly a large scale organisation. Thus, they have option to make a shift towards other vendor in
order to acquisition for other relatively necessary materials. Therefore, with the assistance of this
evaluation company can effectively able to apply their core competencies strategical along with
sustainable business model in order to increase their overall rate of revenue and profit.
5.0 CONCLUSION
As per the above statements it can be concluded that all the work which is needed to
include by the mangers of the company for effective growth and even by these models company
can survive competitive market in effective manner hence the main impact of the company

which need to be made in appropriate way. While organisation aimed to expand in other market
they have to conduct proper research and development that helps to get important insights about
market and its related factors for taking important decisions. In order to by using various tools
and techniques organisation can be able to get desirable outcomes to remain always competitive
in marketplace.

6.0 REFERENCES
Books and Journals
Kaya, N., 2015. Corporate entrepreneurship, generic competitive strategies, and firm
performance in small and medium-sized enterprises. Procedia-Social and Behavioral
Sciences. 207. pp.662-668.
Mathooko, F. M. and Ogutu, M., 2015. Porter’s five competitive forces framework and other
factors that influence the choice of response strategies adopted by public universities in
Kenya. International Journal of Educational Management. 29(3). pp.334-354.
Mkude, C .G. and Wimmer, M. A., 2015. Studying interdependencies of e-government
challenges in Tanzania along a PESTEL analysis.
Mohajan, H., 2017. An analysis on BCG Growth sharing matrix.
Ryńca, R., 2016. Using the idea of the boston consulting group matrix in managing a
university. Journal of Positive Management. 7(1). pp.70-86.
Song, J., Sun, Y. and Jin, L., 2017. PESTEL analysis of the development of the waste-to-energy
incineration industry in China. Renewable and Sustainable Energy Reviews. 80.
pp.276-289.
Wolf, L., Stidham, A.W. and Ross, R., 2015. Predictors of stress and coping strategies of US
accelerated vs. generic baccalaureate nursing students: An embedded mixed methods
study. Nurse Education Today. 35(1). pp.201-205.
Zhao, Z. Y., Zuo, J., W u, P. H., Yan, H. and Zillante, G., 2016. Competitiveness assessment of
the biomass power generation industry in China: A five forces model study. Renewable
Energy. 89. pp.144-153.
Online
Porter's Generic Strategies. 2019. [Online]. Available Through:
<https://www.mindtools.com/pages/article/newSTR_82.htm>.
Expanding Your Company Globally? Here Are 3 Strategies You Should Consider 2018 [Online]
Available through<https://blog.btrax.com/what-should-your-companys-international-
expansion-strategy-be/>.
What is the Input-Output Model? 2019 [Online] Available through.
<https://kb.economicmodeling.com/what-is-the-input-output-model/>.
Woolworths Limited SWOT & PESTLE analysis 2019 [Online] Available through.
<https://www.swotandpestle.com/woolworths-limited/>.