Woolworths Ltd. External Marketing Environment Analysis Report

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External Marketing Environment Analysis
Report

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Table of Contents
Introduction......................................................................................................................................3
Background of the Woolworths.......................................................................................................3
Target Customers.............................................................................................................................3
Purpose............................................................................................................................................4
External marketing environmental analysis.....................................................................................5
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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Introduction
Woolworths supermarket is one of the largest Australian based grocery/supermarket store chain.
It is owned by Woolworth Ltd and operates under 995 stores all over in Australia. It was founded
in 1924. It covers a significant percentage of Australian supermarkets. It has around 115,000
employees working in stores, distribution and support centres. It provides fresh fruits, vegetables
and meat to its customers directly from the farmers and growers. The company understands the
importance of delivering an innovative way to shop to its customers.
Background of the Woolworths
The company was initially founded with the name “Wallworths Bazar Ltd" but later didn't
register with this name so finally took the title, Woolworth. It claimed to sell the cheapest
products with new money back offers which gave them a huge success. It was the first retail
store who started using receipt printing cash register machines. They gradually started expanding
its range of groceries and now become one of the largest retail chains in the country
(Woolworths, 2019).
Target Customers
Company's existing target market is the high-class income group or who are at group 8 to 10 in
living standard measure (LSM), but now it starts to focus the lower (LSM) group and growing
black middle-class families for future (Woolworths Group, 2019).

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Purpose
The purpose of this report is to undertake an external marketing analysis on Woolworths Ltd and
which will help to complete the requirements of marketing environment analysis - task 1.
Opportunities
 Customer experiences – Woolworths focuses on its customer's experiences at a store or
online. They include some personalised services, self check out and AI assistance to its
customers which attracts customers to visit stores.
 Loyalty schemes – Woolworths offers some personalised loyalty schemes to its
customers which create a big difference in customer experience at the store.
Threats
 Competition – One of the biggest competitors of Woolworths is Coles Ltd which gives a
fierce competition to its profitability in the market and now few other big retailers like
Amazon could be considered as a significant threat to the company.
 Awareness in consumers – Consumers are getting aware day by day for their health and
food habits. Consumers want to buy organic and chemical free products which create a
demand for change in supermarkets trends although Woolworths is already focusing on
selling natural products to its customers (Keith, 2012).

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External marketing environmental analysis
Environment Definition Industrial forces Potential
opportunities
Political Political pressure
against the retail
business nature.
It will lead to change
their plans according
to upcoming political
pressure.
There is massive
pressure in Australia
for the retail industry.
Government changes
rules & regulations in
a few years which are
not appropriate for
business growth.
Economical Easy regulations to
new entrants
It will increase
competition.
In Australia, rules &
regulations from
government becomes
easy for new entrants
who will create more
competition.
Social Relationship with
suppliers are poor by
nature
It will increase the
chances of losing
suppliers.
Woolworth needs to
improve their
relationship with
suppliers to stay for
the long run as no. 1
in the market.
Technological Merchandising
systems are
inadequate to
implement. SAP bases
system will improve
proficiency.
Company’s customer
data and suppliers
data are precious for
the company.
Technology change
can lead to this
The sap-based
merchandising system
will bring definite
improvement in its
efficiency.

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situation.
Environmental The company invest
in energy efficiency
markets
New industry to
invest and earn the
profit. These
industries have some
risks with it.
The company invest
in carbon and energy
efficiency markets
which will improve
brand image among
people. It will be an
excellent promotional
strategy.
Legal Strict codes to follow
by NFF and many
running legal battles
with ACCC
(Australian
competition and
consumers).
Long-running legal
battles ruin a brand
image.
A company should try
to solve the running
legal battles with
ACCC because it is
not an ideal situation
for the company.
The following are the detailed Pestel analysis of Woolworths Ltd.
Political – In Australia, the company handles a huge political pressure which would affect all
retail industry. Government has many rules & regulations for the retail sector. The company
started been working years ago, but laws and regulations from the government changed many
times in those years. Adopting these changes is not easy for a company (Woolworths Group,
2016).
Economical – Globalization made things easy and complicated at the same time for retailers.
Government has been making rules which help to attract more entrants in the country to start
work with. This situation creates unnecessary competition between Woolworths and other
retailers. Globalisation contributes to growing the economy of the, but it is considered as a
problem.

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Social – In the retail industry, Woolworths used to be a king in this sector in its starting years
which made its relationships very poor with suppliers. Now things have been changed; in today's
scenario suppliers are one of the important parts of the retail industry. The company have to
maintain a good healthy relationship with its supplier to run its business smoothly.
Technological – Earlier the technologies which used to use in the retail industry were not
appropriate according to today's scenario. Technology has been updating in every sector which
develops the need for change in technologies in the retail sector. SAP-based techniques will be
helpful to work with proficiency in this industry.
Environmental – Company decided to invest in the new markets of carbon and energy
efficiency. These investments will be beneficial to create a better image of the brand in the
world. Customers are very aware and sensitive about social causes, and if the company were
associated with some social, environmental businesses, it would be helpful to encourage more
customers to be with the company.
Legal – Company was running this business from quite a long time now, and the company was
involved in many legal issues with NFF and ACCC. These legal battles are not very good for a
company brand for its popularity and image. The company should try to solve them faster that
will be helpful to improve its customer’s services (Keith, 2012).

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Conclusion
Woolworths Ltd. is one of the largest supermarket chains in Australia. The company was
founded in 1924, and now it has 995 stores. Target customers are new growing income group
including LSM. Pestel analysis has been conducted in this report to find political, economic,
social, technological, environmental and legal factors for the organisation.

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References
 Keith, S 2012. 'Coles, Woolworths, and the local', Locale: The Australasian-Pacific
Journal of Regional Food Studies, n2. Research Gate, pp. 48-71.
 Woolworths Group, 2016. Doing the right thing. Woolworths Group. Pp. 23-24.
 Woolworths Group, 2019. Our customers and community. [Online] Woolworths Group,
Available at https://www.woolworthsgroup.com.au/index.php?
action=search&query=target+market [Accessed on April 22, 2019].
 Woolworths Group, 2019. The Woolworths story. [Online] Woolworths Group, Available
at https://www.woolworthsgroup.com.au/page/aboutus/The_Woolworths_Story/
How_We_Were_Founded [Accessed on April 22, 2019].