BUMGT5920 - Global Expansion and Management: Woolworths Case

This essay discusses the concept of management in a global environment, using Woolworths as a case study to illustrate international expansion strategies, challenges, and opportunities. It highlights the importance of cross-cultural management, compliance with international business standards, corporate social responsibility, and customer relationship management in the global market. The essay examines Woolworths' expansion into China via Tmall Global, emphasizing the need for extensive market research and sustainable practices. It also explores opportunities such as faster market penetration and brand extension, while addressing challenges like changing consumer behavior and environmental concerns. The analysis concludes that while global operations present challenges, they also offer significant growth opportunities for multinational organizations like Woolworths.

Running head: MANAGEMENT IN A GLOBAL ENVIRONMENT
MANAGEMENT IN A GLOBAL ENVIRONMENT
Name of the Student
Name of the University
Author Note

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Introduction
With the introduction of globalization in the modern century, business in the
contemporary scenario has witnessed sea change. Businesses are no longer confined to set
boundaries, rather have expanded into areas that were not possible to imagine few decades
earlier. The global business environment as we name it today presents us with opportunities and
challenges. The role of the managers has thus become increasingly important in the global
environment. In the essay, I shall be discussing the above stated concept in a more elaborate way
while giving example of the multinational company, Woolworths and its expansion strategies. I
will discuss the company’s international competition and attempt to explain the solutions
adopted by the company to resolve its conflicts and face competition (Acs, Szerb & Lloyd,
2017). Further, I will also provide arguments made by different scholars and experts in the field
in order to prove my explanation.
Challenge faced in the global market
According to Bowen, Baker and Powell, (2015), international business scenario has
undergone a sea change since the 20th century and with it changed the role of managers. In the
21st century, managing business requires not just successful selling of products and services but
also successful management of the entire workforce. Some of the most prominent challenges
faced in the global market include cross cultural management, compliance with international
business standards and policies, having a strong corporate social responsibility (CSR) policy and
the customer relationship management (CRM) strategies amongst others.
Managers have to scrutinize the business environment frequently in order to be updated
with the latest and changing trends. Another challenge faced by the companies in the global

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market is the constantly changing behavior of consumers across the globe. With the availability
of information in hand through smart phones, consumers now have the option to choose
companies of their choice. This has presented the companies with the biggest challenge as they
are now aware of the fact that one misjudged decision could impact the entire business. A
company looking to make its mark in a foreign land has to do extensive research about its
demographics, behaviors and target population (Crane & Matten, 2016).
Companies that plan to expand globally have to face an added challenge of being
sustainably superior. The increasing issues of environment degradation have compelled
international regulatory bodies to instruct global companies to include environmental
sustainability as their priority. It has also escalated the troubles companies face while expanding
because running in the market successfully while maintaining sustainable practices is difficult
(Davvetas, Sichtmann & Diamantopoulos, 2015).
Woolworths made the decision to expand internationally in the year 2013 when the
management was sure that it has performed well in the Australian market. The decision was
made after the company registered a 2.5% increase in its quarterly sales for that year. It opened
its online store in China in 2016 thus making inroads into international expansion. The store was
launched on the Tmall Global platform, a B2C business owned by the Alibaba Group.
The expansion strategy of the company has been seen by many as a smart move by the
retail giant to maintain its dominance. With the presence of international companies like
Walmart, it has to keep expanding in order to stay ahead in the race. In order for Woolworths to
ensure a successful expansion in the Asian market, many aspects have to be taken into
consideration. It could take a lesson or two from the recent cases of Ford and Qantas and their

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operations in Australia. The motor company was accused of selling cars in Australia that had
defective dual-clutch automatic gearbox. Although the country’s consumer regulatory body
Australian Competition and Consumer Commission (ACCC) made claims of 70,000 Ford
vehicles of being fitted with the faulty devices, the motor company denied the allegations (Helm
& Gritsch, 2014).
Opportunities
It is but imperative to state that businesses have not only been confronted with challenges
but they have also been blessed with numerous opportunities as well. These opportunities have
allowed the businesses to expand their domains and stay competitive in the global market.
Caiazza, Shimizu and Yoshikawa (2017) opine that the global business scenario in the
contemporary age has provided the companies with a chance to understand new culture and gain
knowledge about the business traditions. Several opportunities like penetrating into markets
faster, opportunity for faster development, and opportunity for extensions for existing
franchisees are abound for companies in the global environment (Kolk, 2016).
The company chosen as example is Woolworths. Woolworths Limited is the company
based in Australia that owns a chain of supermarket stores known as Woolworths Supermarkets.
It was founded in the year 1924 and specializes in groceries, health and beauty products, DVDs,
household products, stationery items and pet and baby products amongst several others. At
present, the company operates over a thousand stores across the country. It holds the top position
in Australia in terms of market share for the year 2017 with 35.7% of share (Martens et al.,
2015). In 2017, the sales figure of the company went up to 55 billion dollars displaying a rise of

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3.7% from 2016. The company also boasts of more than 200 thousand employees across the
country that includes 952 Indigenous employees as well (Woolworths.com, 2018).
After surviving a debacle in the hardware business in 2016, Woolworths focused on its
major strength that is its food offerings that proved successful. It was able to defeat Coles after
seven years and be the leading food items provider. The company has been planning for the
expansion of its operations and setting up its shops overseas. The organization has made huge
investments in its global expansion related plans. Woolworths has also planned acquisitions
which can immediate effect on the shares of the company in the market. Woolworths has been
successful in taking the position of the largest retailer in the world along with the other
Australian retail giants. Woolworths has shown strong growth from the year 2015 (Savrul,
1Incekara & Sener, 2014). The revenues of the organization have increased by 17.1% and the
gross profit has further increased by 48.1%. The growth of the company is further related to the
turnaround that has been shown by Woolworths in its various divisions like food and clothing.
The global operations of the company have also shown high levels of growth. The South African
operations of the organization have shown a turnaround after the success of the clothing division
of the stores. The company has received the leading position in the retail market of the Southern
Hemisphere. The sales in the food division of the organization also increased and the strategies
implemented by the supermarket have succeeded. Woolworths has become the largest
supermarket chain of Australia within a short span of time (Wetherly, 2014). The organization
has further formulated a lean retail model which can provide huge opportunities for growth of
Woolworths in the industry. Woolworths has developed a three-year strategy based on the
growth of its revenues with the help of lean retail model. The lean model aims to deliver 500
million dollars cost reduction in the next three years of its operations. The customers of the

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organization have always been given the highest level of importance by the management of
Woolworths. The lean retail model of the organization has been able to drive growth of the
company by seeking efficiency and further investing in the customer related activities. The three
major outcomes that are the focus of the lean strategy are mainly, the costs related to
improvement of efficiency, the customers of the organization and the growth of the market share
of Woolworths (Wheelen et al., 2017). The company thereby aims to manage the costs that are
related to areas of the business and increasing investments in the customer-centric operations.
Woolworths has huge opportunities in the online retail operations and the marketing of products
on social media platforms. The company is well-known in the market for its famous jingle,
“Woolworths the fresh food people”. The social media strategies and connections established by
Woolworths has been effective for the company in its operations. The company has been
delivering quite effectively in its various social media platforms and has become a retail
powerhouse. Woolworths has huge presence in Australia with more than 800 stores and the firm
has further increased its social media presence (Wirtz, Tuzovic & Ehret, 2015). This new online
shopping website that has been launched by the organization has been able to increase the reach
and the revenues of Woolworths in the retail market. Woolworths therefore has huge
opportunities in the online retail market and it can be successful in providing tough competition
to the ecommerce giant Amazon.
Conclusion
The report can be concluded by stating that the organizations have to face many different
challenges in the global locations which are related to the external environment in which they
operate. However, globalization and international expansion is further able to provide huge
opportunities to the multinational organizations to increase their profits and their presence as

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well. The example of Woolworths has depicted that the international operations have provided
the company with huge growth related opportunities and have helped it in increasing the
presence in various countries. The online presence of organizations is another major factor that is
related to globalization.

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References
Acs, Z. J., Szerb, L., & Lloyd, A. (2017). The global entrepreneurship and development index.
In Global Entrepreneurship and Development Index 2017 (pp. 29-53). Springer, Cham.
Bowen, H. P., Baker, H. K., & Powell, G. E. (2015). Globalization and diversification strategy:
A managerial perspective. Scandinavian Journal of Management, 31(1), 25-39.
Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Davvetas, V., Sichtmann, C., & Diamantopoulos, A. (2015). The impact of perceived brand
globalness on consumers' willingness to pay. International Journal of Research in
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Helm, R., & Gritsch, S. (2014). Examining the influence of uncertainty on marketing mix
strategy elements in emerging business to business export-markets. International
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Kolk, A. (2016). The social responsibility of international business: From ethics and the
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Martens, P., Caselli, M., De Lombaerde, P., Figge, L., & Scholte, J. A. (2015). New directions in
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Savrul, M., Incekara, A., & Sener, S. (2014). The potential of e-commerce for SMEs in a
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Wetherly, P. (2014). The business environment: themes and issues in a globalizing world.
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Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management
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Wirtz, J., Tuzovic, S., & Ehret, M. (2015). Global business services: Increasing specialization
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Woolworths.com (2018). Woolworths.com.au. Retrieved 15 April 2018, from
https://www.woolworths.com.au/