Comprehensive Market Analysis Report: Woolworths' Business Strategies

This report provides a comprehensive market analysis of Woolworths Supermarkets, an Australian supermarket chain. It begins with an introduction to the organization and its industry, highlighting its market share, diverse product portfolio, and multi-channel distribution system. The report then presents a SWOT analysis, identifying Woolworths' strengths (brand value, market share, product portfolio), weaknesses (lower international presence, supplier relations), opportunities (growth in retail sectors, big data utilization), and threats (flawed campaigns, competition from Aldi). A PESTEL analysis examines the political, economic, social, technological, legal, and environmental factors affecting the organization. Finally, the report recommends five generic strategies: overall low cost provider, broad differentiation, focused low cost, focused differentiation, and best cost provider. The report concludes with an examination of Woolworths' organizational structure and its impact on business operations. The report provides valuable insights into Woolworths' market position, challenges, and strategic options.

Running head: MARKET ANALYSIS OF WOOLWORTHS
MARKET ANALYSIS OF WOOLWORTHS
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1MARKET ANALYSIS OF WOOLWORTHS
1. Introduction to the chosen organization and industry
The concerned organization, Woolworths Supermarkets, is an Australian supermarkets
chain operating under the Woolworths Group (Woolworthsgroup.com.au 2019). The diversity of
propositions that are made by the organization has been adding a competitive edge to the same
since its inception in the year 1924 (Woolworthsgroup.com.au 2019). The organization is
headquartered in Bella Vista, New South Wales of Australia and accounts for around 80% of the
market share along with Coles (Woolworthsgroup.com.au 2019). The diverse range of
propositions that are developed by the organization assisted the same in enhancing the rate of
sales.
The organization currently holds around 1000 stores across Australia, 976 supermarkets
and 19 Metro Convenience stores with the objective of attracting the attention of a variety of
customers (Woolworthsgroup.com.au 2019). The wider distribution channel of the venture
improved the market position of the same while retaining significant amount of customers which
is sufficient for providing the company with competitive benefits against existing players in
Australia. Moreover, the organization also offers online buying options with the objective of
providing the customers with their daily needs at their convenience time and place. The multi-
channel distribution system of the venture ensured improvements in the sales volume and the
profit making ratio.
On the other hand, the uninterrupted functioning of the business units are greatly
dependent on the positive values that are reflected from the workforce. Currently the
organization employs around 115,000 employees who have been adhering to the different

2MARKET ANALYSIS OF WOOLWORTHS
changes that are proposed by the venture for simulating the gains and sustenance of the same in
the markets (Woolworthsgroup.com.au 2019). The revenue earned by the organization in the
year 2018 was A$56.726 billion, which clearly indicates that the organization is prosperous in its
attempts (Woolworthsgroup.com.au 2019). However, it has been noticed that in the year 2018,
the sales volume of the organization fell drastically which affected the profit ratios. Therefore,
the purpose of undertaking the research is to examine the different issues that are being
restricting the uninterrupted flow of operations of Woolworths apart from all the positive ends.
2. SWOT analysis of the organization
Strengths
 The increased brand value of the
organization
 Huge market share along with Coles
in the Australian markets
 Diverse product portfolio
 Presence of multi-channel distribution
system
 Improved commitment towards
environmental concerns
Weaknesses
 Lower international presence and
expansion in the markets affected the
rate of operations of the venture
 Minimized supplier relations has
affected the rate of operations of the
venture while operating in the
different markets
 Delivery quality related issues in the
organizational model
Opportunities
 Huge prospect of growth in the retail
sectors in the developing economies
 Utilization of Big Data with the view
of enhancing the rate of developments
Threats
 Flawed campaigns of the organization
that proclaimed cheaper price
offerings
 Minimization of the quality of

3MARKET ANALYSIS OF WOOLWORTHS
in the organization while identifying
the needs of the consumers (Pulker,
Scott and Pollard 2018)
offerings (Mialon et al. 2016)
 Aldi’s aggressive expansion in the
markets affected the rate of growth of
the organization in the Australian
markets
 Slow growth of online retail industry
have affected the rate of operations of
the venture while operating in the
different markets (Phillipov 2016)
The SWOT analysis of the organization supported in identifying the different aspects of
cahneg in the oeranizational operatiosn while operating in the autsralian markets. The better
brand position, diverse range of product offerings and multi-channel distribution has enabled the
venture in maintainiing te efficiency of the operations while operating in the different markets. In
this relation, the strengths have attributed to the growth and sustenance of the venture while
operating in the different markets (Paull and Hennig 2018). On the other hand, the framework
also developed a range of weaknesses that are affecting the growth of Woolworths.
The major issue that is being faced by the organization is due to lower international
presence, estricted expansion, minimized relations with the suppliers. The different changes in
the organizational operations are related to the expansion of the same which would have
contributed to the sustenance of the venture. However, the lack of efficient expansion related
strategies of the venture affected the growth and sustenance realetd objective of the venture. On

4MARKET ANALYSIS OF WOOLWORTHS
the other hand, the degrading quality of the delivery service affected the interests of the venture
while operating in the different markets.
The major threat of the organization is related to the flawed campaigns of the venture
which critically affected the interests of the customers. The lack of customer retention by the
organization and the aggressive growth of Aldi. The growing strength of the competitors again
affected the rate of operatiosn of Woolworths. The flawed campaigns lof the organization and
the rate of operatiosn of the venture enhanced the rate of operations. Minnema, Bijmolt and Non
(2017) opined that the assessment of the micro-economic environment of an oranization enables
in identifying the strategies that might b einitiated by the organizations with the objective of
gaining a competitive edge in the markets. Therefore, the SWOT assessment of Woolworths
enabled in critically assessing the position of the venture while developing its operations in the
Australian markets.
3. PESTEL analysis of the organization
Political  The enhanced rate of political pressure
on the organization to operate in a
duopolistic economy has restricted the
capacity of the organization in
maximizing the sales volume and
profitability of the same while
operating in the different regions
(Jiang et al. 2017).
 The stable political relations held by
the organization and minimization of

5MARKET ANALYSIS OF WOOLWORTHS
taxations have enabled the venture in
enhancing the rate of operations of the
venture while operating in the
different markets.
Economic  The economic growth of Australia
(GDP) is restricted to 0.4% in 2019
which was 0.9% in 2018 which
affected the rate of operations of the
venture (Pulker et al. 2018)
 The improvements in the customer
spending on different costly
commodities has enhanced the scope
for the venture in developing and
proposing products for a wider variety
of customers
 The global economic fluctuations
might affect the rate of operations of
the venture while operating in the
different markets
Social  The Australian population consists of
31% Millennials (Ariyawardana,
Ganegodage and Mortlock 2017).
Therefore, the changing taste and

6MARKET ANALYSIS OF WOOLWORTHS
preference patterns of the Millennials
affect the rate of operation of the
venture while operating in the
different markets (Fels and Lees
2018). The key changes in the
organizational operations are reliant
on strict observation of the changing
buying behaviour of the Millennials.
However, failing to observe the
characteristics of the Millennials
would cost the organization in losing
its competitive edge while operating in
the different regions of Australia
(Singh-Peterson et al. 2016).
 The degraded relation with the
suppliers would affect the rate of
operations of the organization,
Woolworths, which might again affect
the rate of operations of the same
while operating in the different
markets
Technological  The major technological developments
are specifically based on the IT

7MARKET ANALYSIS OF WOOLWORTHS
infrastructure of the economy which
has enabled Woolworths in perfecting
the Big Data Analytics (Umberger et
al. 2016). The Big Data Analytics
enabled the venture in delineating the
needs and preferences of the
customers which enabled the venture
in enhancing the rate of operations
while gaining competitive advantage.
 The wider availability of internet
facilities enabled the venture in
developing the promotional practices
in adherence to the needs of making
most of the target customers aware of
the unique propositions. In this
relation, it has been noted that more
than 73% of the Australian households
have access to the internet services
which would enable the venture in
enhancing the rate of operations while
operating in the different markets
(Paull and Hennig 2018).
Legal  The imposition of around 55 Acts and

8MARKET ANALYSIS OF WOOLWORTHS
Regulations by the NFF (National
Farmers’ Federation) has restricted the
enhanced scope of profitability of the
venture (Pc.gov.au., 2019). The NFF
take strict action against an
organization that exploits the rights of
the farmers. In this relation, the
organization is restricted to the ethical
bindings of the different regulations
that are imposed by the NFF
(Pc.gov.au., 2019).
 The continuous hassle with ACCC
(Australian Competition and
Consumer Commission) affected the
rate of operations of the venture and
restricted the same to develop
monopolistic market in Australia
(Phillipov 2016). The lack of
monopolistic market structure in
Australia might again affect the rate of
operations of the venture while
maximizing the rate of profitability
while operating in the different

9MARKET ANALYSIS OF WOOLWORTHS
markets.
Environmental  The enforcements made by the
environmental protection agencies on
the organizational operations have
affected the rate of operations of the
venture while increasing the rate of
operations of the same. The
organization is being noted as one of
the major environmental protection
enthusiast which rendered the venture
in developing a superior brand image.
The organization aimed at undertaking
a collaborative approach towards
fulfilling the 2020 commitments
through minimization of wastes and
carbon footprints
(Woolworthsgroup.com.au 2018). On
the other hand, the organization aimed
at developing a range of renewable
energy sources for backing up the
activities in the supermarkets
(Woolworthsgroup.com.au 2018). The
initiatives that are initiated by the

10MARKET ANALYSIS OF WOOLWORTHS
venture ensured the rate of operations
of the same while operating in the
different markets.
4. Recommended five generic strategies for the organization
The generic strategies that might be initiated by Woolworths are being demonstrated in
this section:
Figure: Five generic strategies
(Source: Preuss 2017)

11MARKET ANALYSIS OF WOOLWORTHS
Overall low cost provider: The organization, Woolworths must take steps to develop an overall
lower cost of the offerings for the broader market which will ensure that the venture retains the
loyalty and trust of the customer base towards their offerings (Woolworths.com.au 2019). The
provision for the lower cost products by the organization would enable the same in retaining the
huge customer base which will contribute to the overall competitive edge of the venture.
Broad differentiation of products: The broader differentiation among the product ranges for the
wider market segments would enable the organization in enhancing the portfolio that is being
presented by the same to the customers. The wider portfolio of the products would enable the
organization in attracting the attention of huge number of customers towards the offerings made
by the venture while operating in the different markets. Therefore, the application of broad
differentiation of the products would enable the venture in maintaining the efficiency of the
operations in alignment with the needs of the customers.
Focused low cost: The organization must target the Millennials, as they comprise of 31% of the
total population in Australia. In this relation, the organization must take steps to improve the
pricing strategy for marketing to the Millennials with the objective of providing the same with
superior experiences in a lower cost (Woolworths.com.au 2019). The lower cost of the offerings
in this relation, would enable the venture in maximizing the sales to the Millennials, ensuring
profitability.
Focused differentiation: The organization, Woolworths, must take steps to develop a wide range
of products in alignment with the needs of the Millennial customer base. The different changes in
the organizational operations are reliant on the efficient utilization of resources while operating
in the different markets. In this relation, the focused differentiation strategy of the organization