Strategic Management Report: Woolworths Strategic Practices

This report delves into the strategic management practices of Woolworths, a major Australian supermarket chain. It begins by defining strategic management and its key concepts, including goal setting, analysis for strategy development, strategy formation, execution, and monitoring. The report then applies these concepts to Woolworths, examining their strategic principles centered around offering, growth, and efficiency. It further analyzes Woolworths' specific strategies such as pricing, store expansion, new product ranges, price reductions, and technological adaptation to maintain competitiveness in the dynamic retail sector. The report emphasizes Woolworths' focus on customer needs and its continuous efforts to adapt to market changes and technological advancements to achieve its strategic objectives and maintain a competitive edge.

Introduction: Key Concept of Strategic Management
Strategic management is basically an incessant process which incorporates from in-depth
analysis, planning ahead, effective monitoring, and carrying out a detailed assessment of all
the points which are essential for an organization to fulfil and attain their desired goals and
set objectives. It is one of the vital processes of management planning which includes
discovering and development of the strategies. This process is undertaken by managers for
achieving the goal of improved and delivering better performance while retaining the best
solution and remains competitive in the market. An organization is alleged to get the
competitive advantage if the level of profitability is higher than the standard profitability for
all the companies in the same industry.
“Strategic Management can also be defined as a process for identifying fortune of the
resolutions and execution operations by the respective manager or the team who considers
and embark on decides the result of the firm’s performance” (MSG)
For carrying out the organizational analysis, The manager should have ability to undertake
the in-depth analysis of the industry and market inclusive of the study of the competitive
organizational environment so as to take correct resolutions. It is the responsibility of the
Strategic Team to demeanor the SWOT analysis highlighting the strengths, Weaknesses,
Opportunities, and Threats. Thus, they should formulate the best possible deployment of the
strengths, reduction in the organizational weaknesses and should adequate use from the
arising opportunities of the business environment perspective and should try to cope up with
the threats. This process applies to planning for both expected as well as unexpected
contingency, it is being applied to every organization,” no matter how big or small the
organization is”. The key reason is that it can help towards formulating and executing the
proper strategies which can help in attaining the desired level of success in the industry. The
strategic management process includes the detailed research on critically analyzing on the
cross-functional decisions before executing. The process majorly includes following:
 Conducting an in-depth research-analysis of the company’s internal and external
strengths and weaknesses.
 Devising the action plans.
 Execution of the action plans.

 Evaluating up to what extent the action plans have been successfully implemented
and amending the strategic decisions in the case of the expected results has not been
achieved. (Rawson & Rouse, 2015)
In this report, the company which is required to be considered while undertaking the process
of analyzing the strategic management decisions and its implication on the organization is
‘Woolworth, a supermarket located in Australia’. As per J.M. Higgins, the Strategic
management is the process of running the hunt of organizational mission, whereas to manage
the relationship of the organization to its environment”. Thus, the report will include and
highlight the strategic management practices, its execution and implication in Woolworth.
(Barnat, 2013)
Woolworth is the company which is being operated in retail stores for selling the ready to eat
food, liquor, basic home-usage products and home-improvement products in Australia with
Headquarters in Bella Vista. They have almost 2,00,000 employees and I was one of them
last year. The major competitors of the company’s are ALDI, Costco Wholesale, IGA and
Coles. The company Woolworth has been able to stay competitive and successful due to the
reason of implementation of effective strategic management theories. The strong
performance and continuous growth has been able to embark on the market due to these
theories only. The momentous socio-cultural trends have also been demonstrated in the report
further. The company’s has three key value-creating purposes are effective distribution
strategy decided by top-management, inbound logistics and their goodwill.
The Theoretical Concepts of Strategic Management
As we know the Strategic management is the process in which an organization expansion and
execution of the plans which promotes the company’s goals and objectives of any
organization. As the process of strategic management is a constant progression which one
changes as the organizational key objectives are being evolved. The businesses engage in
strategic management to make sure that they acclimatize to trends and manage the external
changes such as globalization. The several concepts which will exemplify the strategic
management and the development of organizational goals are written as follows: (Josh)

 Goal Setting
At the center of the strategic management process is the formation of goals, establishment of
a right mission statement, values and organizational objectives in its recreation of planned
opportunities. It can be done through goal setting by which managers compose the strategic
decisions like how to meet the sales targets and attain the privileged revenue generation.
Through the theory of goal setting, the organizations assist how to contend in a progressively
more competitive and global business era.
 Analysis for Strategy Development
The analysis of any organization strengths and weaknesses is the essential and the main
theory under the strategic management process. Except the internal analysis, a company
should undertake the external analysis of factors such as new or rising technology and the
new competitors emerging in the market. With the help of internal and external analysis, the
company can form the aim, set goals and the key objectives which can help in transforming
the weaknesses into the strengths category of the organization. The detailed investigation will
help in assisting the developing and formalizing the strategic ways of acclimatize with the
changing technology and the rising markets.
 Development of Strategy
The formation of any strategy is the idea which would be required for deriving the emergent
specific procedures which can help an organization to fulfil its goals. The strategy formation
may lead to properly use the information through analysis, prioritization, taking corrective
actions and making the requisite/important decisions which would highlight, “how to
concentrate on the important issues which the organization is facing”. Moreover, by the
process of strategy development or strategy formulation, an organization may look forward to
discover the ways for increasing the profitability and maintaining a competitive advantage.
 Strategy Execution
The implementation of strategy is an implementation of the decided strategy into real grounds
for achieving the set goals. The inspiration behind this concept is to collect the entire relevant
information essential to fetch the strategic plan to practical life. The organizations normally
employ the strategies in the course of estimating budgets, developing the requisite curriculum
and executing the policies for meeting the goals related to factors such as financial,

management, human resources and equipped goals. To attain the successful accomplishment
of the devised strategic plan which ensured the cooperation among the management and other
personnel, this is entirely important.
 Monitoring of Strategy
The last but not the least concept is the actual monitoring of the strategy after the process of
execution. The strategy monitoring is required for assessment of the strategy to demonstrate
that if it capitulate the projected results which are adopted under the organizational goals.
Through this process, a business will identify what are the areas of the plan for appraising the
ways for these areas. The subsequent process will be followed by carrying out the assessment
of the expected results with the real ones. With the help of monitoring element, an
organization can be proficient to realize where and how to modify the plans as per the
changing environment & emerging market or technology. (Wicks, 2004)
Woolworth strategy’s practices basically follow the below three key principles which
are written as under:
1. Offer: This aims to improve the key offer to make sure that customer’s should prefer
Woolworths first;
2. Growth: Deriving continuously to meet and fulfill the customers’ needs; and
3. Efficiency: Developing the best customer value by organizing for success and
implementing the ‘Lean Retail’ model.
Secondly, as per the changing and upgrading market situation, Woolworth’s target to
maintain the concepts which are written as follows:
 Pricing and range strategy
This is a Woolworth new strategy which focuses on the pricing element which can help to
compete or reduce the impact of the Coles and Aldi’s sales on Woolworths’. The ways which
has been used consists of lower pricing, unique and exclusive range, target the key customers
by choosing the best Loyalty Program as per them among all the alternative offers available.
This is their continuous strategy which is followed by Woolworths and by offering an “Own
Brands” can help in opposing with the limited range discounters. The company’s strategist
said that Woolworths would be able to create a brand reputation as “the best quality and
better priced product” which can be done only through Own Brands to secure the price gaps
where there is no brand option available.

 Opening New stores and refurbishments
Woolworths have accepted that their strategy is being comprised of re-managing the capital
expenditure among new & old stores. They declare that they would revamp their more than
80 stores per annum in the predictable future, which is compared with 23 stores in financial
year, 2014 and 61 in the financial year, 2015. These changes will be made as per the local
customer preferences or choices and it will be prioritized in the areas where Woolworths
actually foresee the best and higher potential for the customer growth. Woolworths
announced that they are going to re-develop around 20-30 new stores per annum in line with
the population growth and to address gaps in their market coverage.
 Delivering the “new range of products and ensuring the better experiences” for
customers
The Woolworths Food Group has recently formed a new division called Woolworths Food
Co. It will have the core responsibility for creating and developing the new product range,
enhancing the fresh meat supply and better processing facilities. This can help Woolworth in
designing the strategic sourcing relationships with the primary partners of Woolworths’.
As a part of their commitment to grow more or high in the category of Food for Now/Food
for Later, the company has declared that they are going to be partnering with Western Sydney
based, the premium and high-quality food manufacturer “Beak & Johnston” for offering the
Australia’s first fanatical facility for facilitating the ultra-fresh ready-to-cook and ready-to-
heat meals. (Langley, 2015)
 Attaining Attention in the market by reducing their prices
The Woolworths Food Group has today delineate their three-year strategy for winning the
trust of their customers, and enhance the market share of customers’ food spend via lower
prices and can lead to “improve all the aspects of their shopping experience”.
“This strategy will lead to a reduction or drop in prices, more convincing offers with greater
innovation,”
“What is clear is that while the lower prices are essential strategy, but the true battleground is
the overall satisfaction or the positive customer experience,” “So we will not be beaten on
price, and we will provide better convenience, superior freshness and a more appealing range,
and a focus on innovation,” he said. (Woolworth Limited)

 Adopting Changes or Up-gradation to stay competitive
This feature is related to the key concept, which is Goal Setting. As we all know that the
Retail sector or industry never plunk at rest, thus retail industry is known as the most
dynamic industry in the market- trade. In the last year, the company was running the
transformation stage so as to adapt the changes as per the industry standards. The changes
made as per industry’s situation the considerable change because customer’s seek better
value and are very well aware of the alternatives. These days, the customer’s are
determinedly acting as the driving seat of our business and the changing trend of shopping
behavior in influencing the company to stay active so as to stay competitive. Woolworths is
actively participating to strategies as per the changing industry era through setting new goals
and targets for building the new chapter for expansion and encasing the opportunity. They
have strategies in the way that they consider the customer’s choice and wish as the core heart
of their business, adapting as per the way they want and creating innovative ways for them to
shop with us.
 Adopting the new technology to stay competitive
These days, the customers now have the capability to do shopping as per their wish, anytime
and anywhere. The technology is being upgraded and the online-shopping is rapidly
increasing. This gives a platform for customer’s to compare the prices and products as well.
Thus, the Woolworth’s company has decided to be equipped with the technology and provide
the products at affordable prices in the market. Each and every Woolworth’s business is
offering different alternatives such as websites, mobile apps, virtual stores and innovative
delivery options for complementing the stores. (Strategic Management Articles)
 Customer’s Centralised Approach.
Woolworths is serving around 30 million consumers weekly. So they have offer a new
Everyday Rewards Program to their 5 million regular or daily customers. This scheme is
considered as the best Loyalty scheme in Australia. This scheme doesn’t only offers points
(redeemable) against purchase for the next purchase, but also the customers get an
opportunity to get Qantas Frequent Flyer points whenever they will make a purchase with
Woolworth.

 Continuous Improvement
Woolworth focus on continuous improvement in customer relations and then they carry out
the research analysis for almost all their regular customers frequently so as to understand and
equipped with their shopping behavior and changing demand day by day. They in fact carry
out the research for exploring which option is mostly used and being preferred by their
customers.
Internal Analysis
Strength Weaknesses
 Holds a strong financial performance
 Have a strong brand name and
goodwill
 Holds better relationship with
suppliers among other competitors
 Regular Supply of Seasonable
products at affordable prices
 Carries a restricted or limited
geographical market share
 No distinct marketing strategy from
all the rivals
 They offer many products under one
roof
 No national Pricing Policies
Opportunities Threats
 Expanding the scope in term of online
sales
 Opportunity to grow in the healthcare
sector
 Competition from the other renowned
brands such as Aldi and Coles
Recommendations
Strategic Alliance: Woolworth should focus more on designing the unique combinations for
promoting reward programs.
People Focused Development: they have analyzed the importance of their human resources
and capabilities in achieving the goal, which states that retail is highly people concentrated
business. Though there are difficulties in controlling and managing people from different
background has been remained as a strong challenge.

Facility Development & other Value added factors The branches of Woolworth located in
Suburb should also include their own food court. This can help in increasing the revenue.
Product Proliferation: This strategy can be measured as the strategy under Product
Differentiation which Woolworth should consider for development or growth in the
upcoming years. The same kind of strategy has already been followed by venturing with a
liquor based company Dan Murphy’s Liquor store.
Free food Taste: The Company should focus on offering a free product catalogue by offering
some discounts. This can be combined with the bulk sale orders
Offering a Cost Leadership Culture: Woolworth should focus and try to adopt this strategy
so as to reduce their operating costs via “Just in Time Strategy”.
The last but not the least recommendation which has been arisen after detailed analysis of the
strategic management and its implication is long term recommendation is that Woolworth
should focus more on convenience sort of shopping. Secondly, they are being suggested to
invest in more profitable businesses and industries such as home or hardware businesses and
organic products. (Hayes, 2009)
Conclusion
The company is regularly working hard to manage and strive the strategic management
practices in their work. Woolworth has been able to succeed due to the reason that
Woolworth has been able to maintain the starve for working creatively so as to stay
competitive. Despite the lower profit potential or increased competition, Woolworth has been
able to attain the 10.75% growth in scale for the last three years. To stay equipped with the
new emerging ways in the market, they religiously follow the principles of Strategic
Management which are: (Management, Strategic Management Theories and the Linkage with
Organizational Competitive Advantage from the Resource-Based View, 2009)
 The Classic Approach
 The Human Resource Approach
 The IT Approach
 The Contingency Approach
 The Quantitative Approach

The profitability maximizing and the competition-based theory, which was based on the
concept that the business organization should pay focus on their key objective which is
maximizing the long term profit and managing the emergent sustainable competitive
advantage over the industry rivals in the external market place. (University of Pittsburgh)
Thus, through this report, we are able to undertake the systems perspective, contingency
approach and the other key strategic management theories which can be helpful in achieving
the set goals are as the resource-based theory or view (RBV) which particularly look after the
firm’s competitive advantage by laying down the fundamental theoretical foundation in real
grounds implications by understanding the fundamental basis of the variables. This is due to
the reason that the paper will focuses majorly on the internal attributes such as resources,
capabilities and systems of the organization towards achievement of the competitive
advantage. (Woolworth Limited Corporate Communication Team, 2014)
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