Woolworths Strategic Analysis: SWOT, VRIO, Value Chain Report

This report provides a comprehensive strategic analysis of Woolworths, a major player in the Australian supermarket industry. It begins with an introduction and proceeds to conduct a thorough SWOT analysis, identifying the company's strengths (strong brand, large store network), weaknesses (limited global presence), opportunities (brand promotion, expansion), and threats (competition, rising costs). The report then applies the VRIO framework to assess Woolworths' resources and capabilities, determining their value, rarity, imitability, and organizational aspects to identify sustainable competitive advantages. Finally, a value chain analysis is performed, focusing on primary and support activities such as inbound logistics, operations, outbound logistics, marketing, and services. The report concludes by summarizing the key findings and emphasizing the significance of financial resources and patents in maintaining a competitive edge.

STRATEGIC MANAGEMENT

Contents
Introduction................................................................................................................................3
SWOT analysis of Woolworth...................................................................................................3
VRIO framework.......................................................................................................................4
Value chain analysis...................................................................................................................6
Conclusion..................................................................................................................................6
References..................................................................................................................................8

Introduction
This report analyses the Australian supermarkets through internal analysis and application of
value chain analysis, SWOT analysis, and VRIO framework. Woolworth is headquartered in
Australia and it holds 80 percent of market share in the Australian supermarket industry.
SWOT analysis of Woolworth
Strengths
Woolworths is one of the most oldest organisations in the modern retail trade industry of
Australia
The company nearly has more than 900 stores
The organisation has employee base of 100000 people
Woolworths has a strong brand name with efficient operations (Phadermrod, Crowder, &
Wills, 2019).
Woolworths owns private label brands that are quite popular among the customers
Weaknesses
The company has limited global presence as compared to other competitors
Increasing presence on online platform has certainly restricted its growth
The company always faces price war and strong competition with Coles.
The competition in the supermarket chain can make major pricing blunders, which will lead
to major losses
Opportunities
The company can promote brand through sponsorship, advertisement, and promotions.

Company seek enhancement with the help of strategic opportunities and the franchisee model
in the emerging economies
Opening of new stores in new areas so that it can increase its global presence
Weaknesses
The company has limited global presence as compared to other competitors
Increasing presence on online platform has certainly restricted its growth
The company always faces price war and strong competition with Coles.
The competition in the supermarket chain can make major pricing blunders, which will lead
to major losses
Threats
Increasing cost of raw materials can affect the profit margin
Economic recession can lead to hinder the growth strategy while opening several stores
Competition from the international players can affect the Woolworth business
VRIO framework
This framework is a tool to identify and determine business in sustaining its business,
competitive advantage, which has to be valued, not easily imitable, rare and business will

have to organise to seize maximum worth of its resources.
(Source: Knott, 2015)
Valuable
Australia is the most valued retailer, as it remained most trusted brand in the nation. In order
to become more effective, Woolworths can capitalise its resources and abilities in order to
avoid catching up. Customers are willing to support local producers (Hernández, & Garcia,
2018).
Woolworth’s employees are the valuable source for the organisation. There is significant
portion of the workforce, which is highly trained leading to productive output for the
company. This is to ensure greater revenues for the organisation (Knott, 2015).
Rare
The financial resources of the company are found to be rare as per VRIO analysis. Stronger
resources on financial basis will become a competitive advantage and parity. Better
compensation and work environment can ensure the employees without leaving for any other
firm (Hernández, & Garcia, 2018).

The patent of the company is rare and this is due to when competitor will need lot of
investment with better network of distribution.
Imitable
Financial resources of the organisation is costly to imitate if once identified by Woolworth.
These resources will be acquired by the organisation through long-term profitability. New
entrants and competitors will need same profits for a long time to acquire the required
resources (Knott, 2015).
The Woolworth`s employees are not costly to imitate as being identified by Woolworth`s
VRIO analysis. The competitors as to invest a significant can acquire research and
development. Local food products of the Woolworths avail temporary competitive advantage,
which can be acquired by competitors.
The patent of the company is difficult to imitate because it is not legally permitted to imitate
any of the patented products. The distribution network is costly to imitate by the competitors
as it has been developed over the years (Knott, 2015).
Organisation
The financial resources are being organised to capture value in the identification. Resources
are being used strategically to invest at the right place by making the use of opportunities and
limiting threats. Patent of the company is not organised well and the company has not been
using patent to great extent.

Value chain analysis
(Source: Richter, & Walther, 2016)
In order to promote expansion and development of the local corporates, the chosen plan is a
“local sourcing plan”. 90 percent of the meet, vegetables, which are sold in Australia, has
helped their farmers to get a chance to grow (Gürel, & Tat, 2017).
Primary activities-
In-bound logistics – they are quite important by Woolworth as retailers under Woolworth’s
name in several stores. Goods coming from local producers are finally sent to the distribution
centres in several areas to check up the quality among the stores across New Zealand and
Australia.
Operations- It will include both manufacturing as well as service procedures. Examination of
functioning activities is significant for refining output, maximising the competence and make
sure the inexpensive achievement of Woolworths.

Outbound activities- Woolworths can examine and get well and an appropriate set of the
outbound logistics to discover competitive advantage bases and attain its commercial growth
purposes.
Support activities- The supportive processes are being facilitated to experienced employees,
supporting supply chain advancement of technological arrangement, which is necessary to
present to the final customers (Gürel, & Tat, 2017).
Marketing activities- Woolworths undertakes activities such as sales force, promotional
activities, building relations with appropriate members. It objective is to depend on business
goals, competitive dynamics, brand image, and current standing.
Services- The Company has offered Services- Pre sale and post-sale services as they play an
important role in promotional and marketing activities.
Secondary activities-
Firm infrastructure-
It includes legal matters, accounts handling, strategic management, and effective
infrastructure allowing optimising value chain.
Human resource management- Woolworths include HRM aspects that includes selecting,
training, personnel management, and performance management.
Technology development
All the value chain activities depend on production, integrated distribution, cost
minimisation, training costs, and depending on the talent of the employee.
Technological development

It includes automations, product design, data analytics, and product supported customer
services, which leads to research and development.
Procurement
Woolworths involve procedures that involves raw material, and other procurement activities
with operational, outbound, and inbound logistics.
Conclusion
From the above discussion, it can be seen that VRIO analysis of Woolworth indicates that
financial resources avail sustainable competitive advantage. The patent is the source of
unutilized competitive edge as competitive parity is for the local food items.

References
Gürel, E., & Tat, M. (2017). SWOT analysis: A theoretical review. Journal of International
Social Research, 10(51).
Hernández, J. G. V., & Garcia, F. C. (2018). The link between a firm´ s internal
characteristics and performance: GPTW & VRIO dimension analysis. Revista de
Administração IMED, 8(2), 222-235.
Knott, P. J. (2015). Does VRIO help managers evaluate a firm’s resources?. Management
Decision, 53(8), 1806-1822.
Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis
based SWOT analysis. International Journal of Information Management, 44, 194-203.
Richter, K., & Walther, J. (Eds.). (2016). Supply Chain Integration Challenges in
Commercial Aerospace: A Comprehensive Perspective on the Aviation Value Chain.
Springer.