Woolworths Supermarket: Strategic Analysis & Recommendations

This report provides a strategic analysis of Woolworths, a leading supermarket chain in Australia, examining its market position, competitive environment, and internal capabilities. It begins with a macro-environmental analysis, considering factors impacting the grocery industry, followed by an industry analysis using Porter's Five Forces model to identify threats and opportunities. The report then delves into a company analysis, utilizing the VRIO framework to assess Woolworths' resources and capabilities. Competitor analysis focuses on major players like Coles and ALDI, highlighting strategic challenges. The report concludes with recommendations for Woolworths to enhance its competitiveness and future growth, emphasizing innovation, supply chain management, and employee engagement. Desklib provides access to this and many other solved assignments for students.

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Executive summary
This report will discuss about the strategic management of the Woolworths supermarket of
Australia. It is an analysis about the Woolworths super market. It will include different models
for the analysis of Woolworth’s supermarket. Macro environmental analysis will discuss about
environmental factors influencing the market of grocery stores.
Here, industry analysis is used for the industry life cycles as well as Porter’s five-force model is
explaining about the threats in the market for the Woolworths. This report will also discuss about
the VIRO framework in the later section.
Finally, recommendations for the Woolworths supermarket are included for the future
development.

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Contents
Executive summary.........................................................................................................................1
Introduction......................................................................................................................................3
Management strategies....................................................................................................................3
Macro environmental analysis.....................................................................................................3
Industry analysis..........................................................................................................................4
Company analysis:.......................................................................................................................7
Competitor analysis:....................................................................................................................8
Strategy analysis..........................................................................................................................8
Recommendations............................................................................................................................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
The Woolworth’s supermarket was founded in the year of 1924. It is a grocery store chain, which
is owned by the Woolworths Limited. It covers 80 % of the Australian market in this field. They
are selling groceries such as vegetables, packaged foods, fruits, and many other things in a
grocery store. They are also selling magazines, beauty products, stationary items, household
products, health products and many other items. Besides, Woolworths is offering online services
for those products, which are known as ‘HomeShop’. Woolworth’s supermarket is having more
than 1000 stores across Australia. They follow all the laws and rules according to government.
They provide help and support to the customers (Barnes, et al., 2004).
Woolworths is facing a huge challenge of the competition from other supermarket chains, such
as Coles, IGA, ALDI, and many more. The company also bear losses because of above
mentioned business icons in the field of supermarket (Barnes & Hunt, 2013).
In this way, this report will discuss about different analysis theories include Macro environment,
industry, company, competitor, and strategic analysis for solving major challenges for the
Woolworth’s supermarket. Moreover, recommendations for the Woolworths will be discussed in
the later section of this report.
Management strategies
Supermarkets are having a big challenge from their competitor always in different cases, such as
price, brands, and many more. So there are different analysis are required for the handling these
challenge with the proper management strategies (Burn & Barnett, 2000).
Macro environmental analysis
Macro Environment Analysis (MEA) is including factors of the company, which are changing
different things of the company. Those factors are making deep impact on the company. It is
necessary for understanding about the different factors of the company. Those factors are
providing help for other analysis (Dennis, et al., 2002).

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Environmental standards are impact on the profitability of the company. It is affecting the
supermarket according to the laws. It is also depended on the countries, such as USA is having
different laws for environmental disasters.
Every company should know about the existing environmental standards in the market. They
must know about the required things for the entering in the market. Following things are impact
on the Woolworths supermarket, which are:
 Weather
 Recycling
 Endangered species
 Laws regulating environment pollution
 Attitudes towards renewable energy
 Air and water pollution regulations
 Attitudes towards ecological products
 Waste management under the rule and regulation
Industry analysis
Every industry is having different stages of a life cycle as shown in the below figure.
Source: (Managementstudyhq.com, 2018)

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It is a relationship between the Sales and Time of an industry. Every industry grows in the
starting of the business. Their sales are increases according to time in their introduction stage.
This is a having slow progress but it is mostly positive in many industries. Introduction of the
industry is taking time few businesses are increasing in high rate of sales but mostly it was slow.
Second stage of the life cycle is growth. It is the best stage of an industry in which they incises
their sales according to time. In case of the supermarket, after introduction into the market they
achieve a great growth in their sales. It is most valuable stage of an industry (Doolin, et al.,
2003).
Woolworths limited is also growing in the market as they are coming with new concepts in the
market. Third, one is the maturity of the industry. In this stage, every industry is having their
saturated profitability according to their input in the market. Woolworth’s supermarket chain is
getting so much profit from this business. They are a making them a brand in the market for
grocery store. They increase their store and item in their store for more profit. Last stage is
decline of the industry. In case of Woolworths, they are having different competitors and
sometimes it is happened because of increasing their industry in a huge level, which is not
manageable by the industry. Mostly it is because of competitors in the market. It is also possible
because of the bad services and products (Goldsmith & Flynn, 2005).
Porter’s five-force model is explaining about the challenges of the industry. There are five forces
for the industry, which are creating issues in the profitability of the industry. In case of
Woolworths, they are facing big issue, which are competitors. It is also covered from other
forces. Thetas of new entrants are facing by the Woolworths. It has so many competitors, which
are new in the Australia. They break their business in few amounts but it is a big factor for the
Woolworths (KPMG, 2018).
Porter’s five forces are described about the threats from different things in the market for an
organization. It is must require for an organization that they know about their threats for making
changes in their strategies. It is a process for finding weaknesses of an organization. Company
know about the threats and it is beneficial for making changes in the current processes of the
organization.

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Source: ( Jeffries, 2010)
Woolworths is having a great compaction from the ALDI and Coles. They are facing so many
issues but they put more efforts in the industry and change the thing, which are affecting their
business. They manage bargaining power of suppliers, which is the best way to increase their
overall growth in the supermarket industry. They are also working for the bargaining power of
the buyers. There are so many discounts and offers for the buyers, such as festival season’s
discount. They changes rates of the products with low margins for attracting the customers. It is
helping in their business ( Lupoff, 2016).
Company analysis:
Supermarket business is bases on the products and services provided by the organization. There
are so many resources for the profits. It is also depends on the capabilities of the access the
system. Woolworths is managing their business with the online facility, which makes it different
from others. There are so many things, which are provides accessibility of the stores and
products for the customers (Natalie, 2013).
VRIO framework is helping to understanding about the different management strategies for
making business more profitable.

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Source: ( Jurevicius , 2013)
Valuable is the factor, which is affecting the competitive market. It is a process in which
different advantage and disadvantages are occurs form the actions of the company. Rare is a
factor, which makes industry different from others and it is providing advantages to the industry.
Next step is Imitate, in which company gets temporary competitive advantages. Last one is value
of the organization, which is for long-term advantages for the company. Woolworths limited is
following this framework for the handling competition from other companies, such as Coles,
ALDI, SAFEWAY, GIANT EAGLE, CAREFOUR, METRO, and many others (Salmon Expert,
2018).
Competitor analysis:
There are so many factors for handling the threats for the business. In case of Woolworths, they
are having a huge competition from their competitor, such as Coles, ALDI, and Metro.
According the Porter’s five-force model for the Woolworths limited, they are having huge
competition from the Coles and ALDI in Australia (Sim Sheng & Wahidah, 2012).
Woolworths facing external strategic factors, which are considered as threats for it. Rising of raw
material is can pose threats for Woolworths. In order to improve products' standards amending

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the laws can also be a threat for Woolworths. Their main threat is no regular supply of products,
which are innovative. It changes in their sale over period. Local distributors are also count as
threat for Woolworths, as they provide fewer margins to them. Competitors are providing high
margins to them and it is increase their profit. Less skilled employees are also a threat for the
Woolworths limited. Skilled workers are increasing their business and it is makes changes in
their profitability. New environment regulation is also affects the business of the supermarkets
(Suppiler Portal Coles, 2013).
Strategy analysis
Woolworths is having so many strengths in this competition of supermarket chains. Following
are the straths of the Woolworths:
Leadership in marketing:
In Australia Coles and Woolworths are leaders in the field of supermarket chains. Woolworths
cover 80 % of the market share. It is reduce threat of competition from others.
Segment Penetration:
Woolworths is working for both ends, they are targeting the wealthy class people for their
innovative and costly products, which gives them high profits from sale of those products.
Woolworths is also covering the lower value segments for making their value in the market.
Therefore, they cover both ends.
Managing Perceptions:
They are always working on the bases of perceptions and it makes their business in the middle
class category. It is not about the prime or low category.
Employee policies:
Woolworths is having 202,000 employees in this business. They are having skilled employees
for increasing the business. It is also providing a better market in the public. They are providing
bonuses and benefits to the employees for their work. Therefore, they work with more courtesy.
It is helpful for customer’s attraction (The Guardian, 2016).

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Customer’s feedback:
They are taking feedback of the customers for the changes in the services. Customer’s feedback
is helpful for making changes in the margins and strategies for future planning.
These strengths are making Woolworths different from others but there are few opportunities for
Woolworth’s supermarket. It is affecting the profitability of the Woolworths. Decreasing threats
and increasing profit is the best policy of an organization. It is also found from the studies that
innovation is making business more progressing, as they adopt new thing in them. Innovative
products makes Woolworths profit.
Recommendations
Woolworths is a huge company in the field of supermarket chains. There is little
recommendation on the bases of the different analysis:
 Regular supply of innovative products to the customers
 High margins to the local distributors
 Skilled employees for making growth
 Heath products for different peoples
 Manage buyer and suppliers in proper way
Conclusion
It is concluded from the previous parts of the report that, Woolworths is a biggest company in
Australia for the grocery store. It covers 80 % of market share in the Australia in their field. It
has lot of competitors but Coles is the biggest competitor for Woolworths in this business. This
report concluded about the strategies for the Woolworths based on the different analysis, such as
industry analysis, company analysis. Porter’s five-force model is explaining about the threats
from competitors. Strategic analysis is providing a detailed view about changes in the working
procedures of company for getting more benefits in the future.
Woolworths is also following the modern approaches for making their business more beneficial
in this field. Woolworth is adopting digital technologies for increasing productivity and
profitability for their business.

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Finally, it is concluded that Woolworths can increase their business, if they follow few
management strategies and reduce the competition.
References
Jeffries, I., 2010. How To Analyse An Industry. [Online]
Available at: https://isaacjeffries.com/blog/2016/11/2/how-to-analyse-an-industry
[Accessed 16 December 2018].
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Available at: https://www.strategicmanagementinsight.com/tools/vrio.html
[Accessed 16 december 2018].
Lupoff, P., 2016. Disrupted Industries In Secular Change With Diminished Moats As Fertile
Ground For Shorts - Example: Woolworths Ltd.. [Online]
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diminished-moats-fertile-ground-shorts-example-woolworths
[Accessed 16 Devember 2018].
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mortar to clicks‐and‐mortar: a business process perspective. Knowledge and Process
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