Woolworths Strategic Analysis: Environmental Factors & Recommendations

This report provides an environmental analysis of Woolworths, an Australian retail organization, focusing on how the external environment affects its business structure. It examines both micro and macro environmental factors, including changes in government policies and regulations, macroeconomic indicators, and social factors. The analysis identifies strengths and weaknesses within Woolworths, opportunities for growth, and potential threats from environmental risks. The report concludes with recommendations for improving revenues, enhancing customer service, and protecting the company from external environmental changes, emphasizing the importance of adapting to evolving consumer needs and expanding global presence to maintain a competitive edge in the retail industry. Desklib offers similar reports and study resources for students.

Running head: ENVIRONMENTAL ANALYSIS OF WOOLWORTHS
ENVIRONMENTAL ANALYSIS OF WOOLWORTHS
Name of the Student
Name of the University
Author Note

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ENVIRONMENTAL ANALYSIS OF WOOLWORTHS
Executive Summary
The report is based on the analysis of the external environment of Woolworths which is a
retail organization and has its base in Australia. The ways by which the structure of the
business organization is affected by the external environment has been analysed in the report.
The micro and macro environmental factors are important parts of the analysis that has been
performed. The report has also provided recommendations to the company for the purpose of
improving its revenues and providing better levels of service to the customers in an effective
manner. This will also help the company to protect itself from changes that can occur in the
external environment.

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Table of Contents
Introduction....................................................................................................................3
Performance of the business...........................................................................................3
Factors that affect the business structure...................................................................3
Changes in policy.......................................................................................................3
Changes in the government regulations.....................................................................3
Changes in the global and national macroeconomic indicators.................................4
Analysis of the microeconomic factors..........................................................................4
Changes in the microeconomic indicators.................................................................4
Social factors..............................................................................................................5
Compliance with the social changes..........................................................................5
Environmental risks faced by Woolworths....................................................................5
Conclusion......................................................................................................................6
References......................................................................................................................7

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ENVIRONMENTAL ANALYSIS OF WOOLWORTHS
Introduction
Woolworths Group Limited is an Australian organization which has a wide-ranging
interest in the retail industry. The company has its operations in the retail industry of
Australia and New Zealand. Woolworths has acquired the position second largest retail
organization after the Perth based conglomerate named Wesfarmers. Woolworths also has a
takeaway retail counter in the stores in Australia. The report is mainly based on the
performance of the organization in the retail industry and the ways by which the external
environment is able to affect the operations of Woolworths (Woolworths.com.au., 2018).
Performance of the business
The performance of Woolworths has taken a huge turnaround in the year 2017 and the
company has been able to beat the retail giant Coles in terms of the revenues that have been
gained in the industry. The organization has made the commitment to continue its investment
based activities and also fulfil the needs of the consumers (Wheelen et al., 2017).
Factors that affect the business structure
Changes in policy
The policies that have been implemented by the Federal Government in the retail
industry of Australia is an significant factor that affects the operations of organizations like,
Woolworths. The policies have been effective for the protection of the small firms from the
fast elimination from the retail industry of Australia. The prices of the products that are
offered by the company were also restricted by the government policies in an effective
manner (Daspit et al., 2017).
Changes in the government regulations
The research that has been conducted of Woolworths has further revealed that the
regulations that have been implemented by the Consumer Commission of the country has

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ENVIRONMENTAL ANALYSIS OF WOOLWORTHS
affected the revenues of the company in an adverse manner. The regulations have demanded
that the organization needs to operate with the help of fair practices in the environment.
Woolworths has also been affected in a huge manner by the regulations of the Australian
government (Hill, Jones & Schilling, 2014).
Changes in the global and national macroeconomic indicators
The external environmental factors are an important part of the macroeconomic
analysis of Woolworths. The macro environment of the organization thereby includes
different factors which are political, economic, social, technological, legal and
environmental. The external environment is thereby able to affect the ways by which the
organizations are able to perform in the industry. The suppliers of the Woolworths are also
able to affect the prices of the products that are offered to the consumers. The huge number of
suppliers in the retail industry has increased their bargaining power. The customers are also
an important part of the retail industry as their demands are able to affect the range of prices
of the products (Hitt & Duane Ireland, 2017).
Analysis of the microeconomic factors
Changes in the microeconomic indicators
The microeconomic analysis is mainly based on the internal environment of the
organization. The different internal environmental factors that are able to affect the
operations of Woolworths are, the strengths of Woolworths. Woolworths is a pioneer in the
retail industry of Australia and has been able to create a profitable position. The company is
famous in the retail industry for different fresh products that it provides to the customers. The
brand name of Woolworths is also a huge strength that has been able to affect the operations
of the organization. The major weakness of Woolworths in this case is the lack of global
presence as compared to its competitors in the industry (Meyer, Neck & Meeks, 2017). The

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ENVIRONMENTAL ANALYSIS OF WOOLWORTHS
organization has the opportunity to promote its operations with the help of proper advertising
and marketing based techniques. The rise that has been experienced by the industry in prices
of raw materials has affected the prices that are charged by the company.
Social factors
The social factors are also capable of affecting the revenues that are gained by the
organization. The customers form the most important part of the revenues that are gained by
Woolworths. The new means that have been implemented by Woolworths in the retail
industry are essential for attracting the customers. The needs and demands of the customers
however tends to change with the changes that occur in the external environment.
Woolworths thereby needs to address the changed needs of consumers in the international
market (Michael, Storey & Thomas, 2017).
Compliance with the social changes
The social changes are mainly referred to the preferences of the customers with
respect to the types of products that they prefer. Woolworths has always placed the customers
at the centre of its operations in the retail industry. The changes in the social environment
affect the needs of the consumers which further affect the products that are offered by
Woolworths. This has also changed the operating style of Woolworths from a product
oriented to a service oriented type organization (Morschett, Schramm-Klein & Zentes, 2015).
Environmental risks faced by Woolworths
Woolworths has been facing major issues in its operations due to the changes that
have been made in government regulations. The company thereby needs to develop
appropriate strategies which can help in protecting the revenues from the changes that take
place in regulations. The increase in loyal customer base can prove to be an effective strategy
for Woolworths to increase its revenues and form a shield against the changes that occur in

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ENVIRONMENTAL ANALYSIS OF WOOLWORTHS
the external environment. The expansion of operations of Woolworths to the other countries
can be helpful for the company to increase its global presence and further provide harsh
competition to the other establishments in the retail industry.
Conclusion
The report can be concluded by stating that Woolworths has been able to create a
profitable position in the retail industry. However, the business can improve its position in the
market with the help of appropriate strategies and improvement of the services that are
provided to the customers. The external environment analysis has been able to provide an
insight of the operations of Woolworths in the retail industry of Australia.

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ENVIRONMENTAL ANALYSIS OF WOOLWORTHS
References
Daspit, J. J., Chrisman, J. J., Sharma, P., Pearson, A. W., & Long, R. G. (2017). A Strategic
Management Perspective of the Family Firm: Past Trends, New Insights, and Future
Directions. Journal of Managerial Issues, 29(1).
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
Hitt, M., & Duane Ireland, R. (2017). The intersection of entrepreneurship and strategic
management research. The Blackwell handbook of entrepreneurship, 45-63.
Meyer, G. D., Neck, H. M., & Meeks, M. D. (2017). The entrepreneurship‐strategic
management interface. Strategic entrepreneurship: Creating a new mindset, 17-44.
Michael, S., Storey, D., & Thomas, H. (2017). Discovery and coordination in strategic
management and entrepreneurship. Strategic entrepreneurship: Creating a new
mindset, 45-65.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international
management (pp. 978-3658078836). Springer.
Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic
management and business policy. pearson.
Woolworths.com.au. (2018). Woolworths.com.au. [online] Available at:
https://www.woolworths.com.au/ [Accessed 25 Jul. 2018].