Organisational Innovation: A Case Study of Woolworths in Australia

This report explores the significance of innovation and creativity for organizations, focusing on Woolworths, an Australian retail company. It examines the company's innovative service delivery, analyzes market opportunities and potential gaps in the Australian market, and discusses market segmentation. The report also details the company's competitive positioning and includes a financial plan to assess potential profits or losses. It highlights Woolworths' strategies for improving productivity, reducing costs, increasing competitiveness, and enhancing brand recognition through innovation. The analysis also addresses challenges such as competition, uncertain returns, loss of key staff, and financial constraints, providing a comprehensive overview of Woolworths' approach to innovation and its impact on the Australian retail market. Desklib provides access to similar past papers and solved assignments for students.

Running head: ORGANISATIONAL CREATIVITY AND INNOVATION
Organisational Creativity and Innovation
Name of Student
Name of University
Author Note

1
ORGANISATIONAL CREATIVITY AND INNOVATION
Executive Summary
The report focuses on the importance of innovation and creativity. In the modern world,
creativity and innovation are two assets that organisations need to employ to ensure that
loyalty of the customers along with proper revenue. The report focuses on Woolworths a
retail company in Australia. The innovative service that has been developed in the report is
the ability of the company to provide innovative services to the people of Australia. The
report analyses the opportunities and potential gaps of the application of innovation in the
Australian market and the market segmentation undertaken by the company. The positioning
of the company is created and a financial plan is made to analyse the profit or loss that the
company may suffer.

2
ORGANISATIONAL CREATIVITY AND INNOVATION
Table of contents
Analysis on possible market gap/opportunity............................................................................3
Develop value proposition of the innovative product or service...............................................6
Marketing and channel strategy approach..................................................................................8
Competitive strategy and positioning.......................................................................................13
Financial viability of the venture using break-even, cash flow and investment needs............16
Bibiliography............................................................................................................................20

3
ORGANISATIONAL CREATIVITY AND INNOVATION
Analysis on possible market gap/opportunity
Innovation is one of the most and consistent idea that exists in the modern world.
Creativity and innovation exists side by side in a market so that organisations can develop it
and ensure that a competitive advantage is attained. According to Amabile and Pratt (2016), it
is necessary to analyse, the opportunities that markets may gain with the application of
innovation. At the same time, it is also necessary to analyse the gap that exists as the analysis
of the gap can help marketers to develop a mitigation strategy based on the innovation factor.
Therefore, the gaps and opportunities for providing an innovative product or service in
Woolworths can be identified.
Opportunities
Improve in the productivity: The productivity of an organisation can improve
drastically with the implementation of creativity and innovative tactics. In a company like
Woolworths, the innovation can help the company to maintain its reputation in the Australia
market. This can provide the company with an opportunity to continue its production and
services in the business market and ensure that the people of Australia do not get to predict
the products manufactured by Woolworths (Sarooghi, Libaers & Burkemper, 2015).
Therefore, it is necessary for the company to continue with the innovative tactics so that it
can provide continuous service to the people in Australia.
Reduced cost: One of the characteristic of the market of Australia is that it provides
an opportunity for maintaining reduced costs of products. Appreciation is provided to the
organisations that promote products at a reduced cost. Therefore, it is necessary that a
company like Woolworths maintain the cost of the products. According to Helfat and Martin
(2015), the reduced cost of products can help Woolworths gain more customers thereby an

4
ORGANISATIONAL CREATIVITY AND INNOVATION
automatic increase of the revenue can be made possible. Hence, innovation can help
Woolworths not only in manufacturing the products but also while adopting different
strategies.
Increased competitiveness: Competition is stable in every business market and every
organisation need to compete with one another to gain a competitive advantage. The
competitive advantage that can be gained from innovation is that Woolworths can make the
products and services unique. Therefore, it can propel the chances of Woolworths to maintain
its dominance in the retail market sector of Australia. According to Anderson, Potočnik and
Zhou (2014), often it has been seen that the increased competition in the market results in the
improvement of the products and services of an organisation. In the case of Woolworths, the
competitiveness can help it to be more innovative in terms of products manufactured and
supplied to the customers.
Improve recognition of the brand: The improved recognition of the brand can be
done with the help of innovation and organisations can promote its products and services in a
proper manner. In the case of Woolworths, the recognition of the company as a brand
provides it with an advantage to remain competitive in the market. Therefore, with the
introduction of a product or service, the company can try to grow beyond the borders of
Australia and New Zealand (Serrat, 2017). Woolworths can promote its products in the
American market and ensure that the company gain good exposure in the global market.
Gaps
Competition: Innovative products may become hard to be protected from the
competitors. Dawson and Andriopoulos (2014) are of the opinion that the competitors can
easily replicate the innovative products. Although there are legal rules and regulations that
prevent companies from doing so, the fact that it can be replicated may provide a cause of

5
ORGANISATIONAL CREATIVITY AND INNOVATION
concern for the organisations. Therefore, it is necessary that Woolworths, maintain the
competitive advantage that exists in the market and reduce the competition.
Uncertain returns: Innovation may not guarantee success always as the customers
may prefer following the traditional products and services. Therefore, an innovative product
cannot be relied upon entirely for increasing the revenue of an organisation. This may create
a major problem for an organisation like Woolworths, as the people are the main stakeholders
of the company. The uncertain rate of approval from the customers is also a concern for
major risk factors for the organisation. Therefore, it is necessary that Woolworths maintain a
greater timescale so that the innovative products can reach the target customers.
Loss of key staffs: The loss of key staffs can be a huge gap in the application of
innovation. This is mainly because of the fact that the employees may not receive the
innovation of the organisations in a positive manner. As stated by Auernhammer and Hall
(2014) innovation results in changes in terms of organisational policies and work policies. In
a company like Woolworths, the challenging factors for the manager are to maintain the
satisfaction of the employees and ensure that the organisation manages to continue
motivating the people. The loss of employees can mean loss of productivity for the
organisation.
Availability of finance: Finance is usually regarded as the main source of problem for
most organisations. The reason behind most organisations shrug away from innovating
products is due to the lack of finances. In the case of Woolworths finance is not be a worry as
the company has a huge market share in Australian retail market. Despite this, the gap in
innovation exists mainly due to the doubtful nature of the responses of the customers.
Therefore, it is necessary that Woolworths promote its business market in a manner so that it
can address the loss of finance.

6
ORGANISATIONAL CREATIVITY AND INNOVATION
Loss of business: As stated by Cho, Bonn and Brymer (2017) a huge gap in
innovation is the fact that organisations may fear of losing its position in the market. This
may be mainly because of the fact that the innovative process may not work well with the
customers and the employees. Therefore, it is necessary that the managers of the
organisations remain updated about the responses of the customers. In the case of
Woolworths, this may not be considered as a threat as the organisation is well reputed and
have a healthy market share in Australia. Therefore, it is necessary that Woolworths develop
a value proposition that can help in the invention of its products or services.
Develop value proposition of the innovative product or service
The innovation that Woolworths need to develop is the delivery of its products. The
service provided by Woolworths needed to be innovated so that it can compete with other
competitors that provide equal home delivery services. It has been stated by Woolworths aim
to innovate the websites through which the company can reach the customers (Erez et al.,
2015). Therefore, it is necessary that the value proposition of the company addresses the
concern of the customers and ensure that a proper message is delivered to the customers so
that they can respond to the changes made by Woolworths.
The value proposition includes identifying the target market and creating a proper
after sales service so that customers can remain loyal to the company. Woolworths need to
ensure that a proper message is provided to the customers about the type of services and
products that are sold by the company in the market. The value proposition needs to ensure
that it provides an idea about solving the problem of the customers and the manner in which
it can provide benefit for the customers (Liu et al., 2017). In the case of the services provided
by Woolworths it is necessary that the company provide a clear definition of the type of
innovative service it aims to render to the customers.

7
ORGANISATIONAL CREATIVITY AND INNOVATION
The innovation that Woolworths aim to create is in the services of the company. It has
been seen that in the modern day, people lay emphasis on the delivery of goods and services
in the place of residence. Visiting the physical store for the purchase of products has slowly
faded due to the advent of technology (Hon & Lui, 2016). Woolworths provides customers
with an opportunity to visit their website and order any products that is required. Therefore,
the innovation for the services is required so that proper delivery of the services is done.
In this regard, it can be said that a clear statement that Woolworths can make for the
service innovation of the company includes:
“The top grocery service in Australia is now at your doorstep”.
The statement provides a clear indication about the services that the company intends
to provide. In the earlier days, Woolworths did not provide such home delivery service and
due to this reason, it is necessary that it make a statement that highlights the new service it
aims at undertaking in the organisation. Therefore, it is necessary that the company can reach
the customers by providing the new innovative strategy. However, Mascia, Magnusson and
Björk (2015) stated that it is necessary to provide an ideas about the manner in which it can
be provided so that the competitors does not replicate it and gain a competitive advantage.
Therefore, a modification of the value proposition statement can be made that
provides the customers with an idea about the manner in which the innovation can be
provided. For example, Woolworths can provide a statement that states that customers
residing within an area of 10 kilometres will be provided the service free of cost. At the same
time, the company can state the fact that the service provided could be recalled if not up to
the mark. This can be developed in a manner so that the customers can have a proper
understanding about the proposition of the market.

8
ORGANISATIONAL CREATIVITY AND INNOVATION
Hence, the value proposition of the service provided by Woolworths can be stated as:
“The top grocery service store in Australia provides effective and free service delivery
within 10 kilometres from the store”
The statement can be effective for Woolworths to gain a proper promotion in the
market. Customers residing in the areas within 10 kilometres can be excited about the
proposition and ensure that they take full advantage of the situation that is presented to them.
Woolworths can address the people and ensure that these people become the main
stakeholders of the company. However, as stated by Sigala and Kyriakidou (2015) the
drawback of this particular statement is the fact that people residing beyond the area of 10
kilometres remain deprived from the free services. Hence, the innovation tactic of
Woolworths in this case needs to ensure that the services provided can reach every people in
the country. Hence, the value proposition of Woolworths needs to include the characteristics
of the innovative services that the company may provide.
Marketing and channel strategy approach
Market segmentation
Geographic Demographic Behavioural Psychographic
The geographic
factor consists of the
customers and the
regions in which they
reside. In the case of
Woolworths, the
company need to aim
Fay et al. (2015) is of
the opinion that the
demographic factors
usually becomes
important in the
cases that deal with
gender and
This signifies the rate
of usage of the
products and the
responses made by
the customers about a
particular product or
service. It has been
The psychographic
analysis is based on
the abstract
characteristics of the
people. Companies
need to analyse the
life style and the

9
ORGANISATIONAL CREATIVITY AND INNOVATION
at the people across
Australia so that it
can reach new levels
in the market.
According to Caniëls
and Rietzschel
(2015), the
Australian people
like to consume fresh
products that can
help them to remain
fit. Hence, it is
necessary for the
company to ensure
that the target market
is based on a
particular location.
As stated earlier,
Woolworths aim to
provide free services
to the people residing
in an area within 10
kilometres of the
company. Therefore,
it is necessary that
occupation of the
people. In the case of
Woolworths, it is
necessary that the
company analyses
the age and
occupation of the
people that are being
provided with the
services. The
application of
technology is usually
a thing of attraction
for the younger
generation.
Therefore, young and
modern families can
be the target for
Woolworths while
trying to experiment
with their innovative
services. The
products of the
company are directed
for every gender and
seen that innovation
does not always
provide a guarantee
of success.
Therefore, the
innovative strategy
adopted by
Woolworths may not
provide the company
with the success it
desires. The
uncertainty factor of
the products and the
services of the
innovative strategy
may provide the
company with
problems related to
innovation (Jia,
Wang & Xiong,
2017). For example,
the rate of usage of
the home delivery
service needs to be
calculated so that it
manner in which the
people respond to the
changes made by a
company. The
personality and the
lifestyle of the people
usually provide a
proper analysis of the
type of products and
services that may be
preferred by the
people (Alt &
Iversen, T2017). In
the case of
Woolworths and the
innovation designed
by the company, the
services that the
company aim to
provide be related to
the personality of the
customers. It has
already been seen
from the geographic
and demographic

10
ORGANISATIONAL CREATIVITY AND INNOVATION
the company find
suitable target market
based on the area. At
the same time, this is
important as the
transportation cost of
shipping the products
are analysed. One of
the major highlights
the company is that it
has several stores all
across the region of
Australia. Therefore,
the service
innovation can reach
the people residing in
the rural as well as
the urban population
of the country.
Therefore, the
behaviour of the
customers is
important to be
analysed so that
Woolworths can
it is necessary that
Woolworths maintain
the socio-economic
group of the people.
The innovation can
be related to the
young people
belonging to a social
status that purchases
food often from the
stores. The use of
technology for
purchasing the food
items can help
Woolworths apply
the innovative
process in the
company. Therefore,
it can be said that the
demographic factor is
considered as
unimportant for the
company as the rate
of predictability
about the factors is
can be improved in
the future. The rate
of usage can be
related to the loyalty
of the customers and
readiness to purchase
the products.
Therefore, the
analysis can be
related to the manner
in which the
customers use the
innovative service.
Woolworths can
make the people
aware of the benefits
that can be obtained
after accepting the
innovative services
provided by the
company. Therefore,
it is necessary for
Woolworths to
identify the
behaviour of the
analysis that the
target market is the
people residing in a
radius of 10
kilometres and has a
proper knowledge of
the use of
technology. This can
provide Woolworths
with an opportunity
to judge the people
based on their
lifestyle. The class of
the people also
defines the manner in
which they want to
purchase the
products. In the
modern world, the
use of technology
defines the social
class of the people
and the innovative
services provided by
Woolworths may

11
ORGANISATIONAL CREATIVITY AND INNOVATION
ensure that the
service provided by
them are appreciated
in a positive manner.
extremely high.
Hence, Woolworths
can benefit from such
a market segment
and ensure that the
position of the
organisation
improves.
customers based on
the other three
segments so that
further improvement
of the innovative
service may be
provided.
help the company to
gain huge success.
Therefore, it can
application of the
marketing
segmentation can
help Woolworths to
identify the success
that the company
may have after
innovation.
Table 1: Market segmentation
(Source: Created by author)
Channel strategy
Khalili (2016) stated that the channel strategy is considered as a plan made by the
suppliers to analyse the manner in which the products or services reach the customers. A
number of channel options are used that help in channelling the final products to the
customers so that they can appreciate the work done by the companies. In the case of
Woolworths, the channel strategy of the company is the application of a direct strategy in
which the manufacturers of the product and services are directly sold to the customers.
Woolworths maintains self-dealing with the customers so that they can sale the products and
ensure that the products and services are sold using an e-commerce website.
The innovative strategy of Woolworths is the fact that the website of the company can
be related to the type of channelling that is required. The fact that the innovation depends