Woolworths: Market Analysis, SWOT, and Product Innovation

This report presents a market analysis of Woolworths, a major Australian retailer, focusing on the potential for launching organic food products. The analysis begins with an introduction and outlines the objective of preparing a Product Innovation Charter (PIC) for Woolworths, supported by a SWOT analysis. The SWOT analysis evaluates Woolworths' strengths, such as its large market share and customer satisfaction, alongside weaknesses like a confused consumer base and competition with Coles. Opportunities, including the growing demand for organic foods and technological advancements, are examined, as are threats from competitors like Coles and Amazon. The report then analyzes customer demand, highlighting the increasing consumption of organic food in Australia. The PIC is developed, emphasizing Woolworths' focus on the organic market, its target consumers, and its goals to establish a strong presence in the Australian retail chain market. The report concludes by referencing relevant sources to support the analysis.

Running head: MARKET ANALYSIS OF WOOLWORTHS
Market Analysis of Woolworths
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1MARKET ANALYSIS OF WOOLWORTHS
Introduction
The aim of this report is to prepare a PIC (Product innovation Charter) for a business
organization based in Australia. The chosen business organization for PIC is “Woolworths”
which would be done by conducting a SWOT analysis of the same (David et al., 2017). The
paper proposes to prepare a market analysis of the company to understand the future prospect of
its new product launch.
SWOT analysis of Woolworths
For understanding the business environment, the SWOT analysis is the method of understanding
the internal and external market situation of a company (Phadermrod et al., 2019).
Strengths:
Woolworths holds almost 80% of the market share in Australia (Woolworthsgroup.com.au,
2018). Hence, it has less chance of competition in the market. The company is also known for
being employee friendly. The company also enjoys high level of customer satisfaction and they
have a robust system of product promotions. The company maintains a feedback mechanism that
helps to eliminate any possible issues in the market regarding the products quality.
Weaknesses:
However, the company has a confused consumer base. It lacks the basic knowledge about the
target group. The company also runs into price war with the competitor Coles and faces a threat
of replacement. The Company has to constantly maintain its quality; otherwise, companies like
Coles might rise as a serious competitor.

2MARKET ANALYSIS OF WOOLWORTHS
Opportunity: market and technologies
The company has personalized services for the customers, loyalty schemes. The growing
demand for organic foods in Australia has drastically gone up since 2000, almost 4 times. There
is a booming market in Australia for organic foods (Weeklytimesnow.com.au, 2018. The
company has more opportunities than other big giants in Australia. Due to its increased focus on
experience of the customer, the company enjoys more opportunities in the market. As estimated,
the organic food consumer base in Australia is AU$ 2 billion in 2018 (Weeklytimesnow.com.au,
2018). The company has a flourishing market for organic food in Australia if it can properly
understand the demand of the people. In terms of technology, the company focuses on its
technology development and implementation required for organic crops production. The organic
food production requires less use of herbicides and pesticides, which requires better technology
and software (Reganold et al., 2016). The company recently launched the mobile and desktop
application and websites. It has also installed Wi-Fi based network in all its retail stores. This
helps the customer to have better accessibility and better customer satisfaction.
Threats:
The biggest threat that Woolworths has in Australia is Coles and online retailer Amazon
(Weeklytimesnow.com.au, 2018). The offline and online platforms have stronger hold in the
market. Moreover, the company lacks the innovative products in the market, which is an
advantage for other companies like Coles to get more customers.
Customer demand analysis:
The customer base for the organic food market is large in Australia. The demand for the organic
food and eggs are increasing at a faster pace. The overall production for the organic food in

3MARKET ANALYSIS OF WOOLWORTHS
increasing at 30% rate every year, which clearly indicate the growing demand for the organic
food (Reganold et al., 2016).
The PIC (Product innovation Charter):
It is found that people have health concerns and they are opting for organic foods more than the
nom-organic foods. This develops the chance for Woolworths to have a large organic market in
Australia (Australian organic, 2018). Woolworths has better chances of success because the
market for organic food is already established. From the “niche” product, it has become a
“mainstream” product. As estimated, people are becoming more health and environment
consciousness, which is a positive sign (Australian organic, 2018).
Focus:
It will utilize organic fertilizers and eco-friendly technology and will use green manure to ensure
soil fertility. The company’s competitive advantage is its large customer base in the Australian
market and demand for the organic foods. The company also has good marketing capability in
terms of its high profit margin and large number of retail chain spread across Australia; hence, it
constitutes greater chance of success for the organic foods.
Market:
The middle aged and older population are the target consumers. However, it should also appeal
to the larger population as the demand for organic food sis general in nature. The people with
health concerns and middle-income group characterize the benefit segment.
Goals and objectives:

4MARKET ANALYSIS OF WOOLWORTHS
The primary objective of organic foods are to develop the health of the people without affecting
the health and productivity of the plants and animals. However, the short –term goal of the
organic food is to create robust market for Woolworths supermarkets and gain a strong hold in
the Australian retail chain market.
Guidelines:
It is the perfect time for the company to enter the organic market because the company has
already been able to develop trust among the customers about its product quality. The cost of the
launch would be minimal because the company already has number of retail shops and does not
require any further installation. Hence, it is the best time for the company to utilize the market
opportunities.

5MARKET ANALYSIS OF WOOLWORTHS
References
Australian Organic Ltd (2018). Market Report - Australian Organic Ltd. [online] Australian
Organic Ltd. Available at: https://austorganic.com/publications/ao-market-report/
[Accessed 24 Dec. 2018].
David, M. E., David, F. R., & David, F. R. (2017). The quantitative strategic planning matrix: a
new marketing tool. Journal of Strategic Marketing, 25(4), 342-352.
Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis based
SWOT analysis. International Journal of Information Management, 44, 194-203.
Reganold, J. P., & Wachter, J. M. (2016). Organic agriculture in the twenty-first century. Nature
plants, 2(2), 15221.
Weeklytimesnow.com.au (2018). Subscribe to The Weekly Times. [online]
Weeklytimesnow.com.au. Available at:
https://www.weeklytimesnow.com.au/agribusiness/horticulture/demand-for-organic-
food-prompts-woolworths-to-launch-30-million-fund/news-story/
7f08985bf1f8491dfdf07155be4dadb3 [Accessed 24 Dec. 2018].
Woolworthsgroup.com.au (2018). Australian Food - Woolworths Group. [online]
Woolworthsgroup.com.au. Available at:
https://www.woolworthsgroup.com.au/page/about-us/our-brands/supermarkets/
[Accessed 24 Dec. 2018].