Woolworths' Strategic Management: Value Addition and Growth Analysis

This report provides a detailed analysis of Woolworths' strategic management activities and their contribution to sustainable growth in the Australian retail market. It begins with an executive summary highlighting Woolworths' market leadership and expansion since 1924. The introduction outlines the competitive landscape of the Australian retail industry, focusing on Woolworths' key brands and financial performance. The external environment analysis covers political, technological, international, economic, and demographic factors influencing Woolworths' operations. The internal environment analysis identifies Woolworths' resources and value chain activities, including operations, inbound and outbound logistics, customer service, and sales and marketing. A SWOT analysis summarizes Woolworths' strengths, weaknesses, opportunities, and threats. The report also discusses strategies embraced by Woolworths, such as branding and marketing, and world-class supply chain management. Finally, it provides recommendations for Woolworths to invest in R&D, offer organic products, and adapt to changing market conditions.

Running head: MANAGEMENT 1
Management
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Student Affiliation

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Executive Summary
Woolworths started it first store in Sydney in 1924 as a make a deal basement outlet.
Nonetheless, through acquisition and expansion Woolworths has come to be among the
leading supermarket chain across the entire Australia with more than 30% of the market
share. Woolworths is currently among the largest Australian leading retailers in terms of
geographic area coverage, sales revenue and number of stores and supermarkets. The
business has approximately 3,200 stores across Australia and New Zealand with over 800
supermarkets in Australia and over 150 supermarkets in New Zealand. The goal of this paper
is to discuss the significant competencies done by Woolworths in adding value to its strategic
management activities in maintaining its sustainable growth.

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Introduction
The retail industry in Australia consists of nearly 150,000 retail businesses which has
very few key players in the supermarket sector with the major players being Woolworths, and
Coles Group Limited among others. In this light this paper focus on Woolworths.
Woolworths started it first store in Sydney in 1924 as a make a deal basement outlet.
Nonetheless, through acquisition and expansion Woolworths has come to be among the
leading supermarket chain across the entire Australia with more than 30% of the market
share. Woolworths is currently among the largest Australian leading retailers in terms of
geographic area coverage, sales revenue and number of stores and supermarkets. The main
brands which operates under Woolworths Company include: BWS, Woolworths/Safeway
Supermarkets, Big W, Dick Smith Electronics and Dan Murphy’s. According to Woolworths
EBIT recent financial reports it shows that Woolworths has exemplified a constant robust
financial performance. For instance, Woolworths sales shows strong development within the
last five years. In this sense, this paper seeks to discuss Woolworths’ external analysis and
internal analysis and provide recommendation regarding its strategic alternatives that it
should pursue to improve on its effectiveness.
External environment analysis
The external environment analysis is crucial since a business cannot develop its
strategies in a vacuum. These strategies have to be responsive to the external business setting;
otherwise the company could be the leading producers of obsolete products which do not
have value in the market. So as to shun such flaws a company’s ought to be knowledgeable
regarding their business setting (Pulker, Trapp, Foulkes-Taylor, Scott, & Pollard, 2018).
Therefore, this part provides a brief analysis of the external surrounding under which

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Woolworths operate. The external environment comprises all relevant aspects and influences
external the firm’s boundaries like:
Macro Environment Analysis
Political Environment: The Australian government has a straight effect on the
supermarket sector about the legislating operation hours which are monitored and regulated
by the Trade Practices Act (TPA), Australian Competition and Consumer Commission
(ACCC), the Foreign Review Board (FIRB) and the Common Wealth Government.
Technology: Woolworths operates under novel technology which was among the
primary retailers to contribute to Global Electronic Marketing and Merchandising Network
(GEMMnet) in 1994 (Du Plessis, & Grobler, 2014). Also, Woolworths has been investing in
its supply chain and dissemination system that has had a positive influence to its budget
saving. With the advance of the internet Woolworths has adopted the online shopping
approach by developing its website. Consequently, the online shopping had given
Woolworths an added advantage in its sales (Du Plessis, & Grobler, 2014).
International segment: Woolworths has extended its business practices in India and
New Zealand in order to sustain its development in the retail sector by capitalising on its
market strengths.
Economic segment: As a result of the slow development and uncertainty in the
economy of Australia in the recent past is posing a threat for the retail players which could
result in the stagnation of their growth in future in case the situation prolongs (Dixon,
Hattersley, & Isaacs, 2014). The rise in the prices of fuel and inclining rate of unemployment
are also matters of great concern for the participants in the sector.
Demographic segment: According to statistics the population of Australia was
approximately 25 million in 2015 which comprise different ethnic and religious groups

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because of its immigration policy. Currently in Australia people of age above 65 years is
nearly 15% of the whole populace and it is projected to reach 27% advance by 2050. The 85
plus group is undergoing the fastest progression rate, with this figures of individuals in this
age bracket projected to multiply to almost 5% by 2050.
Internal Environment Analysis
Internal environmental analysis is a significant for identifying a company’s strengths
and weaknesses. By studying the strengths and the relation between events which constitute
the business’s value chain as a way to unmasking possible sources of economic advantage for
the enterprise. Therefore, this part analyses different elements and parts of Woolworths
internal setting.
Resources
By the end of 2013, Woolworths has operating over 3,000 stores in Australia and New
Zealand with nearly 200,000 employees. This is an indication that Woolworths has a strong
tangible and intangible resource base. Similarly, Woolworths has an effective management
and human resources with an extensive range of goods and product innovate skills, durable
brand name and quality standing, well-designed logistics management and strong partnership
alliance.
Value chain analysis
Woolworth has different value-creating practices which include:
Operation: Woolworths has its farmer thus it has the capacity to supply fresh products from
the root levels at an affordable price.

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Inbound logistics: Woolworths makes use of its own distribution centres which in the long
run take advantage to procure massive quantity and decline the cost charges by taking
advantage from its suppliers at a discount.
Outbound logistics: Woolworths practices quality management system in its provisions to
ensuring the quality products and freshness.
Customer service: Woolworths has a refund policy which has help to reduce the time of
waiting by utilising trolley mounted scanner.
Sales and marketing: Woolworths venture colossal amount of income in marketing, which
has made its brand awareness successful.
SWOT Analysis
Strengths
 Woolworths has a strong financial stand
 It has a broad range of products
 It has well-established brand image and high reputation (Dwivedi, Merrilees, Miller,
& Herington, 2012).
 Woolworths has a better supply chain management system.
 Woolworth is a leader in the market share with over 30%
Weaknesses
 The operation cost for Woolworths is high because it is extremely large (Babu, 2012).
 It has higher overall cost with increased debt.
Opportunities
 Woolworths has a greater potential of broadening its customer base.

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 It has a greater growth chance in the health food industry.
 The chance to utilise the Internet through online marketing could help to reduce on
expenses and pursue novel opportunities.
Threats
 The is slow development and uncertainty in the economy of Australia over the recent
past.
 The is an incline in the rate of unemployment and recession.
 The business is facing much pressure from the government to decline its business as a
result of the rise in alcohol-related ailments.
Strategies Embraced by Woolworths Limited
Branding and marketing: Woolworths company has positioned its supplies using the
saying “The fresh food individuals” which creates a unique image regarding the quality as
well as the product health wise choice at affordable prices (Dos Santos, Svensson, & Padin,
2013).
Word-class supply chain: The innovativeness and competitive advantage of
Woolworths has been made possible through its supply chain. Therefore, Woolworths has
concentrated on efficiency and cutting on cost in regulating the superfluous expenditures.
Recommendation
Based on the internal and external analysis of Woolworths the paper gives the
following recommendations:
Woolworths should invest more in its Research and Design (R&D) to research on ailments
related to alcohol so as to safeguard itself from the introduction of fresh administrative
regulation that may restrict or further control its sale of alcohol.

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Also, Woolworths should exclusively start offering organic and genetically modified free
food products in a strive to ensuring it support a green economy.

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References
Babu, H. S. (2012). SWOT analysis for opening of FDI in Indian Retailing. European
Journal of Business and Management, 4(3), 55-65.
Dixon, J., Hattersley, L., & Isaacs, B. (2014). Transgressing retail: supermarkets, liminoid
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Dos Santos, M. A., Svensson, G., & Padin, C. (2013). Indicators of sustainable business
practices: Woolworths in South Africa. Supply Chain Management: An International
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Du Plessis, N., & Grobler, A. F. (2014). Achieving sustainability through strategically driven
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