MBA600 Assessment 1: Woolworths Environmental Analysis Report

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Added on  2022/10/17

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This report presents a comprehensive analysis of Woolworths, an Australian supermarket chain, examining its external and internal environments to identify its competitive advantages. The analysis employs PEST (Political, Economic, Social, and Technological) and Porter's Five Forces frameworks to assess the factors influencing the company's operations and competitive landscape. The report details Woolworths' overview, strengths, and weaknesses, and also the sources of its competitive advantages, such as high market share and a strong brand image. Furthermore, the report discusses the potential for future sustainability, highlighting opportunities and threats in the market. The conclusion emphasizes the importance of adapting to the economic and technological environment while addressing the identified weaknesses to ensure long-term success. The report includes references to support the analysis.
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ST UDE NT NA M E:
SUB J EC T:
TI T L E:
DAT E:
MANAGEMENT
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Introduction
Environmental analysis has a significant role in the
business as it indicates the current and potential
opportunities and threats prevailing in the market. Its
serves great importance to the business in decision
making and improving the business process. It provides
the business with the outline of their environment.
External and internal environment environmental
factors have a major effect on the business.
Woolworth is a top organization and to remain
competitive it is essential for the company to examine
its business environment.
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Woolworths Overview
It is an Australian company established in
the year 1924.
It is a supermarket grocery store.
It has around 995 stores in the Australian
market.
It has a workforce strength of 115000
It has annual revenue of $1.2b (Group,
2019)
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PEST Analysis
PEST Analysis (Political, Economic, Social and
Technological) is a management method used to analyze the
external environment of a company. It assesses the major
external factors that influence business operations.
Political Factors
Bribery is highly offensive.
It has a low crime rate.
The government protects the human and business rights.
It safeguards intellectual property (Cunneen, 2011).
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Continued
Economic Factors
The unemployment rate is 5.6%.
The annual per capita income is $50,334.
The GDP is 1.2 trillion with a 2.3% growth rate.
The inflation rate is 2.0%
(Heritage, 2019).
The average interest rate is 4.39%
(Economics, 2019)
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Continued
Social Factors
Australia is a multicultural country (Commission,
2015).
Australians are considered as tolerant in their
behavior.
It is a follower of individualistic culture (Salt, 2011).
Australians have high junk consumption (Vartanian,
2012).
They are developing a problem of slight obesity
(Smith, 2012).
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Continued
Technological Factor
It has a high rate of internet access.
It is equipped with the latest technology.
It ranks 17th in respect of innovative countries.
Government is promoting innovation and
technological development (Liddy, 2015).
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Porters Five Force Analysis
Porters Five force model is used to analyze the internal environment of a
company. It determines the prevailing in the particular industry in respect of
five competitive factors operating in the market.
Competition in the industry (Average)
Availability of competitors
Competitors are not similar in size
Potential loyal customers
Potential of new entrants (Low)
Existing companies attain brand reputation
Customer are loyal
High capital requirement
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Continued
Power of Suppliers (High)
Few suppliers
A large number of buyers
Power of Customers (Low)
A large number of customers
Not many substitutes are available
(Porter, 2017)
The threat of substitute product (Average)
Availability of substitute products
Access to attractive prices alternate products (Knox, 2015)
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Competitive Advantage
Higher revenue
Established goodwill
High number of stores
Pricing strategy
High product demand
Multinational company
(Owler, 2019)
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Strength and Weaknesses
Strength
High market share of 34.0%
(Morgan, 2019)
Subtle advertising
Brand image
Innovation
Growing presence
Fast (Daily, 2018)
WEAKNESSES
Lack of customer focus
Lack of retail basics
Quality Issue
Lack of differentiation (Morabito, 2015)
Improper response to complaints (News24, 2016)
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Sources
The key sources that helped the Woolworths in
achieving competitive advantages are :
Higher management
Marketing department
Human resource
Financial credibility
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