Comprehensive Strategic Analysis of Woolworths Group in Australia

This report provides a comprehensive strategic analysis of Woolworths Group, a leading retail company in Australia. It begins with an executive summary and introduction, followed by an examination of market size trends and financial performance. A detailed SWOT analysis is presented, identifying the company's strengths, weaknesses, opportunities, and threats, along with a discussion of its competitors and competitive advantages. The report then explores strategic options and concludes with strategic recommendations for Woolworths to enhance its market position, address challenges, and achieve its organizational objectives. The analysis incorporates various segmentation strategies and financial data to support its conclusions, offering a thorough overview of the company's current state and future prospects within the retail industry.

EXECUTIVE SUMMARY
Woolworths is offering different varieties of products to its customers in Australia. The
company is leading retail sector of the nation. However, creativity, innovation and increasing use
of online platform is now affecting the sales and profit of the firm. The organization needs to
improve its present situation by implementing the appropriate strategies and due to this, it is
necessary to understand the internal working environment. With reference to this, SWOT
analysis has been conducted within the file. It also informed about the competitors of the firm
and its competitive advantages. Along with this, market trend and size has also been discussed in
the report for understanding its market position and growth.
The financial and corporate performance explained within the study has informed about
the growth of the firm. The facts and figures represent about the success and performance of
Woolworths within the retail industry. The collected information has informed about the areas of
improvement within the company and in context to this, different options for the strategies have
been discussed. It also included those strategic recommendations which firm need to follow for
appropriate implementation of the strategies and accomplishing the objective of expanding
business and gaining competitive advantages in retail market.

Table of contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
Market Size Trends......................................................................................................................4
Financial and Corporate Performance..........................................................................................5
SWOT and Competitive Advantages...........................................................................................5
Strategic Options..........................................................................................................................7
Strategic Recommendations.........................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic management refers to the on-going process including planning, monitoring,
analysis and assessment of all the aspects which are important for a company to accomplish its
organizational objectives effectively (Hitt, Ireland & Hoskisson, 2016). For the current study,
Woolworths Group of Australia is taken into the consideration. The file includes market size
trends, financial and corporate performance and swot analysis. Along with this, the study
involves strategic options and strategic recommendations for the firm.
Market Size Trends
Woolworths Group of Australia is working in retail sector from 22nd September 1924.
The company is running supermarkets under the Woolworths brand in the nation. The firm is
offering different retail commodities and services to its consumers at affordable price as compare
to the other supermarkets. Woolworths is using its target market strategy for promoting and
selling different items in the market. With respect to the market trends, the company is targeting
individuals having high income and the living standard measure group from 8 to 10 for
maximizing the profit. In demographic segmentation, Woolworths is targeting individuals of all
age group, high income earners and both male and female customers (Camilleri, 2018). Under
the geographical segmentation, the supermarket is targeting people of Australia only for offering
its products. And in psychographic segmentation, the firm is targeting customers who prefer
quality products. All these strategies of segmentation are helping Woolworths to target certain
class of customers for accomplishing its organizational objectives. The objective of Woolworths
is to develop an impression in the mind of the consumers which will affect their perception and
purchasing behavior with respect to the desired commodity. In context to this, the company is
using product characteristics and customer benefits as the positioning strategy (Bhasin, 2018).
Financial and Corporate Performance
Woolworths Supermarket of Australia is continuously enhancing its market share and
position within the retail sector. In 2018, the supermarket chain achieved 12.5% of increment
within its sales which made the full year profit to $1.72 billion. It was the highest and strongest
growth in sales of the company. The comparable growth in the sales was 4.3% which was ahead
of its major competitor i.e. Coles which reported to have sales growth of 2.1% with comparable
growth in sales of 1.1% (Woolworths Group-Annual Report 2018. 2018). The supermarket
sector of Australia is facing high competition from the different discount players such as Aldi,

but, this competition has not affected the growth and development of Woolsworth. The major
reason behind the continuous increment in the sales and profit margin of the firm is its attention
on the requirements and demands of the customers. Apart from this, by considering the
environmental consciousness among the consumers, Woolworths has also taken some strict
actions. The company has banned the single-use plastic bags within its stores. This decision can
affect the sales growth initially but later can develop strong brand image and loyalty among the
clients. The supermarket chain is offering its services and products to approximate 29 million
customers on average per week. This represents that Woolworths is performing very well and
strong in the retail sector of the nation (Carey, Parker & Scrinis, 2017).
SWOT and Competitive Advantages
SWOT analysis of Woolworths is as follow:
Strengths: Woolworths is popular across the nation due to its huge market and distribution
system along with the thousands of supermarket. It is one of the most oldest and famous grocery
supermarkets in Australia which has its both offline and online modes of selling products to the
customers. Along with this, the firm has approximate 3000 employees working in around 800
stores. The company delivers high quality products to the clients and due to this, enhances their
satisfaction level (Morschett, Schramm-Klein & Zentes, 2015).
Weaknesses: In this time of globalization, the company is unable to create its international
presence. Along with this, Woolworths is offering its products in lower prices and due to this, it
is facing losses. Apart from this, the organization is targeting both value and premium segment
by selling both affordable and premium products. Even then, the firm is popular for becoming
partial towards the higher income earners and giving them more attention and quality products.
The organization is also not so much popular on online platform as compare to its competitors.
Increasing presence of online brands has limited the growth of the company (Ansoff & et.al.,
2018).
Opportunities: Woolworths can develop difference in its in-store experiences by including self-
checkout technology, personalized services, artificial intelligence and many more. These factors
will help company in differentiating its supermarket from the competitors. Along with this, the
firm can promote its new and present commodities and services with the help of digital

marketing like social networking sites, website, e-mail and many more. This strategy will
strengthen the bond of supermarket with its customers. For enhancing the profit, developing
global recognition and increasing customer base, the firm can expand its business at global level
and in the emerging markets (Morden, 2016).
Threats: One of the major threats for Woolworths is enhancing competition within the retail
sector of Australia. Along with this, there are various external factors such as recession,
economic fluctuation, political factors, alterations in the trade practices and many more which
can affect the operations and growth of the company. Apart from this, people nowadays
becoming health and environmental conscious and due to this, they prefer organic and chemical
friendly products. Changing customer preferences and purchasing habits can work as threat for
the profit of the firm (DeSarbo, Blanchard & Atalay, 2017).
Competitors and Competitive Advantages: Woolworths is facing very complex competition
from its various competitors Coles Group, Tesco, Carrefour, Kroger, Amazon and Walmart.
Wesfarmers and Metcash limited are also major competitors of the company. Wesfarmers is
popular in its diversified retail and marketing strategy and it’s developing a tough competition to
the supermarket. Apart from this, Metcash is famous in Australia for offering groceries,
household commodities, consumer goods, hardware and many more (Knox, 2015). The rigid
marketing structure of Metcash is affecting the economy of Woolworths. On the other hand, the
online presence of Amazon and e-Bay is enhancing competition for Woolworths. The
organization is handling this competition by offering high quality products at affordable prices to
the customers. In addition to this, the company is offering quality products into the working class
homes leading to enhance their shopping experience and expectations (Carey, Parker & Scrinis,
2017).
One of the competitive advantages which differentiate Woolworths from its various
competitors within the retail sector is their capability of ensuring the freshness and quality of
their commodities via effective and excellent supply chain management. Along with this, the
company is also following sustainability while delivering products to the clients for avoiding any
negative impact of its operations to the society and environment, which is developing positive
brand image in the mind of the consumers (Grimmer, 2018).

From the analysis, the strategies used by Woolworths are becoming weak according to
the demand of the current market. The company is facing high competition in retail sector of
Australia and also does not possess proper international exposure. Along with this, the
preferences of the customers are changing with time and due to this, it is necessary for the
organization to make changes within its product ranges and supermarket services. Lack of these
factors can affect the growth and popularity of the supermarket chain. The discussed problems
are major and need proper attention for maintaining the market present and top position in the
retail sector (Wang, 2015).
CONCLUSION
Thus, from the above study, it is concluded that Woolworths is popular for its
supermarket in Australia. With the changing time, the company needs to make some changes
within its strategies. In context to this, the firm can implement advance technology, attractive
interior, better and more space, etc within its stores. Along with this, the company will have to
conduct market research and collect the feedbacks of its employees and customers for
developing appropriate strategies for accomplishing the desired objectives.

REFERENCES
Ansoff, H. I., Kipley, D., Lewis, A. O., Helm-Stevens, R., & Ansoff, R. (2018). Implanting
strategic management. Springer.
Bhasin, H. (2018). Position Strategy. Web. Retrieved From:
https://www.marketing91.com/positioning-strategies/ on 30th September 2019
Camilleri, M. A. (2018). Market segmentation, targeting and positioning. In Travel Marketing,
tourism economics and the airline product (pp. 69-83). Springer, Cham.
Carey, R., Parker, C., & Scrinis, G. (2017). Capturing the meaning of “free range”: The contest
between producers, supermarkets and consumers for the higher welfare egg label in
Australia. Journal of rural studies, 54, 266-275.
DeSarbo, W. S., Blanchard, S. J., & Atalay, A. S. (2017). A new spatial classification
methodology for simultaneous segmentation, targeting, and positioning (STP analysis)
for marketing research. In Review of marketing research (pp. 95-123). Routledge.
Flax, J., Bick, G., & Abratt, R. (2016). The perceptions of supplier-buyer relations and its affect
on the corporate brand. Journal of Brand Management, 23(1), 22-37.
Grimmer, L. (2018). The diminished stakeholder: Examining the relationship between suppliers
and supermarkets in the Australian grocery industry. Journal of Consumer
Behaviour, 17(1), e13-e20.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management: Concepts and
cases: Competitiveness and globalization. Cengage Learning.
Knox, M. (2015). Supermarket monsters: The price of Coles and Woolworths' dominance (Vol.
6). Black Inc..
Methner, N., Hamann, R., & Nilsson, W. (2015). The evolution of a sustainability leader: The
development of strategic and boundary spanning organizational innovation capabilities in
Woolworths. In The Business of Social and Environmental Innovation (pp. 87-104).
Springer, Cham.

Morden, T. (2016). Principles of strategic management. Routledge.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international management (pp.
978-3658078836). Springer.
Pappas, N. (2016). Marketing strategies, perceived risks, and consumer trust in online buying
behaviour. Journal of Retailing and Consumer Services, 29, 92-103.
Simões, C., & Sebastiani, R. (2016). Connecting Corporate Identity and Corporate Sustainability
Strategies: Insights from the Retail Industry. In Winter Marketing Academic Conference
2016 (pp. 145-166). AMA-American Marketing Association.
Wang, Z. (2015). Supermarkets and gasoline: An empirical study of bundled
discounts. Resources for the Future Discussion Paper, 15-44.
Woolworths Group-Annual Report 2018. (2018). Web. Retrieved From:
https://www.woolworthsgroup.com.au/icms_docs/195396_annual-report-2018.pdf on 30th
September 2019