MKT600 Marketing: Woolworths Supermarket Situation Analysis Report

This report provides a comprehensive situation analysis of Woolworths Supermarket, examining its micro and macro environments. It begins with an introduction outlining the company's background and market position, followed by a detailed SWOT analysis to identify the company's strengths, weaknesses, opportunities, and threats. The microenvironment analysis explores the customer base, suppliers, and marketing intermediaries. Furthermore, the report utilizes a PESTLE analysis to assess the political, economic, social, technological, legal, and environmental factors impacting Woolworths. The report identifies the company's strong distribution network, skilled workforce, and brand portfolio as key strengths, while acknowledging challenges like price wars and limited international presence. Opportunities such as strategic acquisitions and the use of social media tools are also highlighted. The conclusion summarizes the findings, emphasizing the importance of both SWOT and PESTLE analyses in understanding Woolworths' internal and external environments and making informed strategic decisions.

RUNNING HEAD: MARKETING 1
Marketing

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Table of Contents
Introduction................................................................................................................................3
Microenvironment analysis........................................................................................................4
SWOT analysis.......................................................................................................................4
Customer base........................................................................................................................8
Suppliers.................................................................................................................................8
Marketing intermediaries.......................................................................................................8
SWOT MATRIX....................................................................................................................9
Macro environment analysis....................................................................................................10
Conclusion................................................................................................................................13
References................................................................................................................................14

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Introduction
In this study, micro and macro analysis will be done for the Woolworths Supermarket,
Australia. Woolworths Supermarket is the Australian supermarket chain founded in1924 and
headquarter of the company situated in Bella Vista, Australia. Woolworths holds around 80%
market share in the supermarket industry. Currently, there are over 1000 stores across the
country in which 976 are supermarkets and 19 are Metro convenience stores (Adamkasi,
2016). The company also deliver products via online booking. In this study, a SWOT analysis
and PESTLE analysis will be done in respect of the selected company. These analyses will
help the company in identifying their internal and external behaviour (Kavadias, Ladas &
Loch, 2016). SWOT analysis will help in understanding the organizational environment and
staying ahead in the market. Major competitors of the company are TESCO, Walmart and
Target Australia they also provide supermarket markets services. Each brand has their own
loyalty programs and create different-different offers for fascinating the interest of the
customers.

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Microenvironment analysis
SWOT analysis
SWOT analysis is a strategic planning tool that can help the management of the
company in conducting a situational analysis process. SWOT analysis will provide a
framework to the company in identifying their strength, weakness, opportunity and threat.
They can use modern principles of marketing mix for increasing their strengths. Apart from
this, Australian economy is emerging economy Woolworths stores can be benefited if they
focus more on online promotion and online deliveries (Brito & Miguel, 2017).
Strength analysis:
Woolworths is the leading company in the supermarket industry. Thus, they have
numerous strength and power in the market place (Abdel, Mohamed & Smarandache, 2018).
Some of the strength of the company described below:
 Strong distribution network:
Woolworths supermarkets has the network of strong distributor. Management of the
company has achieved a milestone in making strong distribution network by
conducting a meeting with various dealers and by signing deals with distributors
(Agarwal, Grassel & Pahl, 2012).
 Skilled workforce:
Woolworths supermarket has a skilled workforce who have specialized through
proper knowledge and training process. This is the key strength of the company
because skilled employees help in minimizing production cost. Front line employees
of the company are trained in hospitality management courses. Front line employees
of Woolworths are front desk employees, cashier, store managers, entry-level
positions, etc.

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 Reliable suppliers:
The company chooses those suppliers who are authorized from the statutory body of
Australia. Reliable suppliers deliver the goods on time and they follow all the
condition of the company (Awais & Samin, 2012).
 Brand portfolio:
Brand portfolio is the collection of the brand that parent company holds under its
name. By holding various other brands, supermarket chain of the Woolworths enjoyed
major profits and other benefits (Bull, et. al., 2016).
 Advance customer feedback tools:
Woolworths has advanced analytical tools available for tracking the experience of
their customers. Management of the company keeps the record of their customers and
make sure that shelves are always filled with customer needs. Front line employees
always request for feedback from their customers because suggestion can help the
store manager in improving their functions (Huo, Flynn & Zhao, 2017).
 Prime locations of the stores:
Woolworths supermarket has over 1000 stores across Australia at the prime locations.
This factor provides major strength to the company because these locations are easily
accessible to the customers. Having stores at prime locations resultant in increased
revenues and more market exposure.
Weakness analysis
Price war:

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Price war is the situation where the companies have to cut down their prices in order to
fascinate customers. When competitors offer discounts on their product than other related
company also have to bring an innovative idea to attract customers. Woolworths always faces
challenges of the price war from their nearest competitions. In order to undertake competition
in such situations, the company has to incur major losses. For overcoming weakness, the
company should evaluate strategies that other competitors are adopting. They should also
bring more exclusive offers for their customers (Eva, Hindle, Paul, Rollaston & Tudor, 2014).
Faces difficult in product demand forecasting:
Demand and supply are dynamic concepts. Management of the company predicts upcoming
trends for attracting more and more customers. The major concern here is that sometimes the
prediction of the management goes wrong which resultant in negative outcomes (Kavadias,
Ladas & Loch, 2016).
Low international presence:
Currently, the company has acquired a very low percentage of shares in the international
market. Management is making efforts in spreading its retail operations outside the country
too but the acquisition process is limited to various regulatory requirements (Govender,
2017).
Opportunity analysis
Strategic acquisitions and franchise model in an emerging economy:
Woolworths has great strategic acquisitions model which succour the company in conducting
efficient and effective operations. Apart from this, Woolworths also offers franchise to other
companies. This helps the company in gaining higher success chances and the brand value

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also enhances. Globalization can the major opportunity for the company because it will help
them in increasing their market shares and customer base (Gurel & Tut, 2017).
Social media tools:
For promoting and engaging customers, the management has various social media tool.
Social media is the most convenient source for promoting and enhancing brand value.
Woolworths has multiple ways of managing reputation over social media.
Market shares:
Woolworths has more than 80% market share in the supermarket retail industry in the
country. It implies that the company is great in managing their customer relationship and trust
among their new and existing customers (Ho, 2014).
The increasing population of the country:
Another available opportunity is that the population of the country is increasing day by day it
means in future the company has more customers in their targeted customer base. This will
resultant in a more profitable situation and enhanced brand reputation. Growing population
means growing demands. In the growing market, the company will incumbent business for
new customers as compare to the current situation (Palepu & Healey, 2013).
Threat analysis
For overcoming from various threats company should implement marketing
principles, increased the strength of their human resource and should able to identify early
warning threats.
Increased alcohol-related health problem creates pressure from the government:

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In Australia, alcohol-related health issues are increasing day by day. So, legal authorities are
pressuring the company to reduce the alcohol items. This is the major threat for the company
because this will reduce the profitability and customer base of Woolworths (Wieland,
Afanasyeva, Kueta & Yoo, 2016).
Dominating power of suppliers:
Although suppliers of the company are reliable sometimes, they try to dominate. It means
they refuse to sell their stocks at a low price and this action increased the purchasing cost of
the company (Ghironi, 2018).
Customer base:
Woolworths is dominating all segment of their potential customer base. They used segment
preparation in which management has prepare strategies to target low, middle and higher
income level of customers. Currently, the company is dominating the market with over 80%
market shares (Phadermrod, Crowder & Wills, 2019).
Suppliers:
The company has potential suppliers which supply stocks as per the market demand. “Teys
Australia” is the major supplier which supplies meat and other stocks. “Hydro Produce” and
“Mackays Bananas” are the vegetables and fruits suppliers of the company.
Marketing intermediaries:
This is the supply chain links which connects market intermediaries to the end customers.
The intermediaries can be defined as agents, wholesalers, distributors and retailers. Marketing
channel of the company provides strength for achieving their promotion and marketing
related objectives (Scolozzi, Schirpke, Morri & Santolini, 2014).

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SWOT MATRIX
Strength Analysis:
Strong distribution network
Skilled workforce
Prime locations
Reputation of brand
Weakness Analysis:
Low international presence
Faces difficult in product demand
forecasting
Price war
Opportunity:
Franchise model
Social media tools
Market shares
Increasing population
Threats:
Dominating suppliers
Increased restriction on alchol
consumption
Customer base
SWOT

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Macro environment analysis
For analysis, the macro environment of the Woolworths, PESTLE analysis can be
used. PESTLE method will cover the political, economic, social, technological and
environmental analysis. All these factors have a profound impact on the performance of the
company. This tool will be used to evaluate the external environment of the company.
Political Analysis:
The political condition of the region shapes the business environment conditions for
the company. However, when political conditions are suitable then it also provides growing
business opportunities. Political conditions are suitable when the government provides
opportunities to foreign investors and trading partners. When these investors show their
emerging interest in the business functions then the profitability of the company enhances. In
the year 2016, Woolworth recorded the profit of $300million USD because of political factor.
This percentage is 14.9% more then year 2015 (Agarwal, Grassel & Pahl, 2012).
Economic Analysis:
Economic conditions like recession and increasing unemployment rate affect the
operations of the company. These factors can resultant in decreasing sales and increasing
production cost. In 2009, due to the global financial crisis, Woolworths company had faced
major loss when the company had to close its operations because of this over 10,000 people
losses their job (Adamkasi, 2016).
Social Factors:
Customer or clients are the prime sources for the business revenue thus developing
strategies for satisfying customer need is essential. In order to answer social context; the
company has set slow prices for various categories for their store visitors. Management of

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Woolworths also keeps an update with the latest social trend in the market. Currently, the
company has loyalty programs. In 2016, reputation of the company got affects because their
customer complains about insects running in the stores. Later on, management of the
company came with the apology note (Brito & Miguel, 2017).
Technological Factor:
The use of RFID and self-checkout counter systems are currently installed in many
stores of the Woolworths. These kinds of technological advancement support the company in
minimizing the efforts of their human resource. From the perspective of customers,
technological changes like self-checkout systems help in saving their time. From the year
2015, the company starts using the self-checkout counters for minimising their human
resource efforts and enhance customer experience (Bull, et. al., 2016).
Legal factors:
Taxation policies and other regulatory policies are part of the legal framework for the
Woolworths company. The company has to follows guideline issued by the food licensing
and other important regulations in order to survive in the market. Products and quality of food
items available in stores need to be in accordance with the country’s regulation act. Stores
have to follow legal laws like Imported Food Control Act, 1992 and Food Standards
Australia and New Zealand Act 1991.
Environmental factors:
These factors enable the company to participate in environmental friendly practices. It
is essential for the company to maintain the well-being of the environment. In other words,
the company has to conduct those activities which do not harm the environment. Using