Marketing Report: Analysis of Woolworths Microenvironment Factors

This report provides a detailed analysis of the microenvironment factors impacting Woolworths supermarkets, an Australian retail giant. It identifies key internal elements such as competitive rivalry, the bargaining power of buyers and suppliers, and the threat of new entrants and substitutes. The report explores the challenges faced by Woolworths, including decreased productivity and operational closures, particularly in the context of the COVID-19 pandemic. It suggests solutions to mitigate these challenges, such as employee training, motivation, and adaptation to changing market conditions. The report emphasizes the importance of understanding and managing these microenvironmental factors to maintain profitability and make informed business decisions. The analysis is supported by relevant academic references, offering insights into the company's strategic positioning within the competitive landscape.

Marketing

Table of Contents
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
Micro environment.................................................................................................................3
Challenges and solutions to minimise the impact of micro environment factor....................4
CONCLUSION..........................................................................................................................5

INTRODUCTION
Micro environment factor can be defined as those are factors which are related to
internal environment of the organisation (Rowley, 2016). These factors impact the
organisation directly. In context of the current report, study on Woolworths supermarkets.
This company is an Australian chain of supermarket and grocery stores which is owned by
Woolworth group. It was founded in 1924 and cover more than 80% of Australian retail
market. In relation to the current report there is scanning of internal environment within
Woolworth’s supermarkets. Different challenges and impacts will be identified with some
suggestion to improve the functioning.
MAIN BODY
Micro environment
Micro environment can be defined as an environment which consists of internal
factors which impact the organisation in a direct way. In context of Woolworths, it is
operating in supermarket chain within Australia where company cover a large section of
market. In relation to this there is various kind of micro environment factor which impact the
organisation internally and has to be managed by the manager to improve functioning. Some
of these factors are discussed below:
Intensity of competitive rivalry: This is a primary element within the micro
environment of organisation which impact the performance and business function of
organisation in direct manner. Under this function, it includes all the elements which are
related to the number of participants are the companies in a similar business to the
organisation and can affect competitiveness within the industry (Chaffey and Smith, 2017).
Industrial rivalry affect the organisations presents in cost of products restrictions by
government trade Union and many more. In relation to the current business environment of
Woolworth, there is large number of competitive rivals within the market. Due to this
organisation has to use effective policies and strategies to eliminate the competitors by being
a cost effective a product differentiation organisation. In relation to this, Woolworths cover
80% of market in UK which help organisation in eliminating the competition from its
rivalries because of expanded market of firm.
Threats of new entrants: under this micro environment factor, the threat of new
entrants within the industry will be covered. In present time, after the covid crisis, this thread
to the Woolworth get minimise. This is because, supermarket industry require high level of
investment and in current time due to unstable economy it is impossible to implement
investment within the firm and new business for a player within Australia. Therefore, this
factor impact positively on the organisation because there is no threat of new entrants within
the industry where organisation can maintain profitability (Baker and Saren, 2016).
Bargaining power of buyers: This is also a major micro environment factors which
impact on the organisation directly, under this factor organisation has to check the bargaining

power of buyers in the market so that it can take effective decisions according to it. In context
of Woolworth, it is operating in supermarket chain where it covers a large market within the
Australia. This makes it easier for the organisation to reduce the bargaining power of
customers because of large number of customer to the organisation. In impact positively on
the profitability of the firm because form can charge better prices because of large number of
customers and low bargaining power. This will also help me to the famine managing its
functions because of single retailer within the market.
Bargaining power of suppliers: Under the factor of micro environment organisation
has to identify the current bargaining power of suppliers so that it can manage the cost of
inventories and can perform more cost effectively within the market. Under this system,
bargaining power of suppliers will impact negatively to the organisation if it is high. In
context of Woolworth, the bargaining power of suppliers in relation to organisation is low.
This is because there are large number of supplier to the moon worth where company can
easily but again for the credit period as well as cost price of the products. Organisation in
managing its function can achieve and profitability because of low cost of purchase and better
credit period (Wirtz and Lovelock, 2016).
Threat of substitute: Under this micro environment factor, it includes all the
competition from the other industry which produces similar products and services with the
organisation. In relation to Woolworth, threats of substitute are comparatively high within the
industry where organisation is trading. Due to impact of globalisation, there are various
functions which have to be performed by the firm and a related to current market situation
which attracts large number of organisation within the economy of Australia. This is
impacting on the organisation in increasing the threats of substitute in the market for
Woolworth.
It can be evaluated from the above that there are various factors which are related to
the micro environment. It is important for organisation to identify these factors.
Challenges and solutions to minimise the impact of micro environment factor
Decrease in productivity: Decrease in productivity of workforce is a major challenge
which has to face due to impact of micro environment factors in organisation. In context of
this, organisation can use functions which are helpful in improving the productivity. These
are Training and development of employees, increasing motivation and improving flexibility
and working structure. This will help in boosting morale of employees and will impact on
productivity in positively (Berkowitz, 2016).
Closure of operations: Biggest challenge in current time where there are number of
stores and supermarket chains of organisation which has to be closed because of covid-19.
Due to covid-19 there is continuous decrease sale of products which impact negatively on the
profitability. Because of this, Woolworth has to set some of its stores which are non-
productive. For improving the function, organisation can use programs which are related to
spreading awareness about covid-19 and minimising its impact on the organisation by selling
the product and services required in this pandemic period (De Mooij, 2019).

CONCLUSION
It can be concluded from the above mentioned report, there are various kind of micro
environment factors which are important for the firm to be analysed. This will help in
managing functions taking decisions according to the current situation of covid-19 and its
impact on the firm. Identification of micro environment factors will also lead to improving
profitability level.

REFERENCES
Books and Journals
Baker, M.J. and Saren, M. eds., 2016. Marketing theory: a student text. Sage.
Berkowitz, E.N., 2016. Essentials of health care marketing. Jones & Bartlett Learning.
Chaffey, D. and Smith, P.R., 2017. Digital marketing excellence: planning, optimizing and
integrating online marketing. Taylor & Francis.
De Mooij, M., 2019. Consumer behavior and culture: Consequences for global marketing
and advertising. SAGE Publications Limited.
Rowley, J., 2016. Information marketing. Routledge.
Wirtz, J. and Lovelock, C., 2016. Services marketing: People, technology. World Scientific
Publishing Company.