Woolworths Strategic Problems and Recommendations Analysis Report

This report presents a comprehensive analysis of Woolworths' strategic problems and provides recommendations for improvement. It begins with an overview of Woolworths' market position, including its strong presence in the Australian retail sector, particularly in alcohol and groceries. The report then delves into specific issues, such as customer complaints regarding undue transactions, data breaches, and poor customer service, which have damaged Woolworths' brand image and customer trust. A content analysis of secondary sources, including news articles and social media posts, highlights these problems and reveals customer dissatisfaction with pricing, product quality, and the rewards system. The report includes a SWOT analysis, identifying Woolworths' strengths, such as leadership and brand positioning, as well as weaknesses like a limited global presence. The report recommends strategies to regain customer trust, improve customer service, and address operational issues, such as enhancing security in self-serve checkouts and improving employee motivation. The report emphasizes the need for Woolworths to adapt to the changing retail landscape and address its strategic problems to maintain its market share and competitive edge. The report also suggests that the company should focus on providing ethically sourced products and should consider the price and discounts offered by competitors to differentiate and upgrade itself.

Running head: WOOLWORTH STRATEGIC PROBLEMS AND RECOMMENDATION
Woolworth Strategic Problems and Recommendation
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1WOOLWORTH STRATEGIC PROBLEMS AND RECOMMENDATION
Power Point Slides 1-3
Slide 1- Woolworths has been known in the Australian market for its 50 percent holding
in the alcohol retail which now occupies 49.2 percent of the market. Woolworths has spread their
clutches on almost every aspect of Australian lifestyle amounting to a 72.5 percent of the entire
$82 billion grocer sector. In the year 2013, Woolworths boasted of operating around 1, 355
liquor stores spanning the entire country.
Slide 2- However, recently a severe loophole in their system caused hundreds of panic-
stricken customers to complain against Woolworths of undue transactions from bank account
(NewsComAu 2018). Various social media sites were used as the platform in order to stage the
protests at the extremely lapse state of operation and management from Woolworths’ side.
Woolworths has formed a loyal customer based over years of providing with excellent service
however, the company faced a backlash due to their own incompetency. The transaction has
claimed an undue $800. The chaos and confusion instilled a new fear amongst the customer
which made them question the reasons behind Woolworths’ possession of their card details.
Slide 3- The doubts were further aggravated due to cyber crime and the customers were
enraged even after repeated assurance from the management to resolve the entire issue. One of
the famous Australian newspapers, The Sydney Morning Herald has confirmed that a huge error
in the data center has caused the uproar and the same could have consequent in major theft from
people’s accounts.
Politicians and professors have questioned the breach if privacy and trust that
Woolworths management has committed by unlawful retention of data even after a prolonged
period of time following the transaction. This has significantly defamed the PR and executives

2WOOLWORTH STRATEGIC PROBLEMS AND RECOMMENDATION
who tried industriously to resolve the matter as their social media pages were filled accusations
and derogatory messages for Woolworths and HRM. The media spokespersons had repeated
highlighted the trauma and stress that the above incident caused on the general mass. It also
shook their faith in the online transactional process and the authority to possess card/account
details of customers by Cuscal. Australian news channels like ABC News and Sky News
Australia collected opinions from several others workers in various retail stores. According to
sources, the Woolworths scandal had severely hampered the transactional process across the
retail stores in Australia. In order to steer clear of mismanagement and confusion, several banks
and retailers had opted for automated messages. However, these measures and steps have failed
to obliterate suspicion and hesitations from the mind of customers. Several Financial Planners
and Investment Analysts have predicted the customers to blame bank authorities in case of
erroneous transactions.
Content Analysis of Secondary Sources
Slide 4
Secondary Source 1- One of the best Australian blogs had advised for the development of a
strategic business response that will improve the communication process that Woolworths have
had with their customers previously. Their approach should be a clear indication of their
seriousness towards the concerns and issues faced by the customers (Montalvo 2016).
Source 2- The Financial Review had criticized Woolworths for their lack of response on the
social media sites (Financial Review 2018). The apparent lack of assurance from their end failed
to pacify the situation and it increased uncertainties amongst the customers. Media
spokespersons have commented on the ridiculousness of the entire affair especially in an age of

3WOOLWORTH STRATEGIC PROBLEMS AND RECOMMENDATION
social media that has been serving as an effective platform for advertising of companies and PR.
The situation provoked a feeling of wariness amongst the common people of the gigantic
corporations that have taken hold of the Australian market. The PR personnel should be held
responsible for dealing with comments that straightforwardly showcased extreme annoyance and
disregard towards the Woolworths group.
Slide 5
Source 3- The Star has written on the unlawful eradication of offers and discounts on the final
billing at Woolworths. Repeated occurrences were recorded to take place in the branches of Sea
Point and Green Point. Irrespective of bonus points and discounts, the customers allegedly paid
the full price of different products.
Slide 6
Source 4- On several social media sites, agitated customers, especially those who are inclined
towards law and order, have suggested Woolworths to adapt the policy of retail and billing
prevalent in South Africa. It means that they have to provide the commodity for free if they are
incorrectly charging for the same (Edelman and Wright 2015).
Source 5- Mumbrella has written about how customers have accused Woolworths of poor
management of their rewards system and unethical extraction of customers’ money. Customers
argue that the system is complicated and not in the least beneficial for the customers. This had
already reduced trust and confidence on the customers’ end and the data retention scandal
degraded the situation further.

4WOOLWORTH STRATEGIC PROBLEMS AND RECOMMENDATION
Slide 7
Source 6- Many customers on Elsevier has raised questions regarding the lack of customer
oriented programs and strategies even after repeated mismanagement and wrong transactions. It
has stated how Woolworths has consequently lost a strong market position and its competitive
edge.
Source 7- News.com.au has questioned the ethics regarding their whole transaction system and
the number of times they have exploited the customers. It has quoted several flustered customers
pointing to a breach in ethics and code in relation to the massive power that they exercise
through market share and size.
Slide 8
Source 8- A reporter working with The Guardian, has collected in-depth information about the
recent crisis in Woolworths has written about how various customers had to reschedule their
entire schedule due to the error in transaction. Some people had to stay away from works while
others had to give up on the day’s shopping of essential merchandises (Michaelson et al 2014).
The newspaper stated this as a major reason why Woolworths never managed to bag a five star
like Foodland and Aldi. Their consistent poor performance has finally made them to consider
about shutting down stores which will cost 500 workers their jobs.
Slide 9
Source 9- the Herald Sun has blamed a number of factors accentuating the mismanagement and
drop of customer satisfaction. Some of the pronounced reasons are store layout, little value for
money and the freshness of products which Woolworths has repeatedly failed to furnish the

5WOOLWORTH STRATEGIC PROBLEMS AND RECOMMENDATION
customers with. Market analysts have expressed dissatisfaction with Woolworths’ incapability of
fighting back at the face of its rivals like Coles. As a result Woolworths has been witnessing a
slowed down market growth and employee morale.
Slide 10
Source 10- Australian forum artforum.com.au has written about the extremely poor management
system of Woolworths which again as a chain reaction has affected the price perception capacity
of Woolworths. These factors had pulled them towards the periphery thereby making Aldi and
Coles more popular. Apart from the ‘value for money prospect’ Woolworths has regressed even
in the criteria of promotion and advertisement more than fifty percent of the customers have
posted negative comments on web forums regarding the price and quality of the products.
Woolworths lacks customers who are driven by value, convenience and quality services,
surprisingly Woolworths has done very little to work on the same (So, Danaher and Gupta 2015).

6WOOLWORTH STRATEGIC PROBLEMS AND RECOMMENDATION
Slide 11- SWOT Analysis of Woolworths
Strengths
Leadership Quality- Woolworths possesses superior quality leaders who possess the strategies
necessary to make the retail sector thrive. Woolworths has acquired a strong foothold in the
Australian market sector with its proper implementation and usage of resources like
technological and human resources.
Brand Positioning- over years of providing consistent services, Woolworths has created a niche
for itself in the supermarket and has created a strong brand image for itself. Their qualities of
products and value based price have played a fundamental part.
Networking- Woolworths has been operating in the market a number of subsidiaries which has
enabled it to become a part of larger corporate family. Woolworths has also been able to offset
profit from one subsidiary in case of incurring loss from the other.
Weaknesses
Weak Global Market Presence- the retailer should now emphasis on expanding its global market
presence like its rival competitors by setting up shops overseas. They have delayed their
international expansion and this can be considered as a major weakness especially when other
companies are entering into cheaper markets like Vietnam.
Staggering in online sales- Woolworths has failed to convert its physical presence into virtual,
this is crucial especially in a time when Australian supermarket is hugely dependant on online
stores.

7WOOLWORTH STRATEGIC PROBLEMS AND RECOMMENDATION

8WOOLWORTH STRATEGIC PROBLEMS AND RECOMMENDATION
Opportunities
Brand promotion through media- Woolworths has created an advertising campaign that has
concentrated on value based brand promotion more than price. The creativity has immensely
helped Woolworths in conveying a positive message to the consumers.
Potential Growth in sales- Market analysts have predicted that the major retail companies like
Woolworths and Coles will dominate with the implementation of online sale option.
Threats
Recession- the risk of recession can significantly affect the market sector as it can decrease the
manufacturer’s stock price and as a result affect the company’s stock price. The other most
affected sector will be productivity and employee. Due to recession the company may even has
to eliminate a number of workers.
Slide 12- Strategic Problems and Recommendations for Woolworths:
1. Woolworths should develop strategies so as to renew the trust and confidence of the
customers and to ensure that they are completing grocery shopping at Woolworths itself.
Woolworth can therefore stretch the range of products and can eventually include
producer branded foods.
2. One of the many strategic problems today faced by Woolworths is the significant
decrease in the number of sales and is losing its market share in the sector of fast food
and quality services (Lewis and Huber 2015). Previously they had created an essentially
flawed Cheap-Cheap campaign which subverted the brand image in front of the

9WOOLWORTH STRATEGIC PROBLEMS AND RECOMMENDATION
customers. As Woolworths competes through ‘Price, Quality, Range and Services’ their
primary focus should be to provide ethically sourced products. They should bear in
consideration the price and discounts offered by the rival competitors in order to
differentiate and upgrade itself (Edelman and Wright 2015).
Slide 13
3. In order to handle the negative publicity that Woolworths has gathered from print media
and social sites, Woolworths should concentrate on providing cutting edge customer
service and technical support. The routine should include staff training and proper
grooming (Taneja, Sewell and Odom 2015).
4. They should introduce loyalty system on the cards which will be more customer-oriented
providing exciting offers and benefits on a number of products. The steps could be
implemented only after a careful analysis of quantitative and qualitative data regarding
what will serve as the best (Crane and Matten 2016).

10WOOLWORTH STRATEGIC PROBLEMS AND RECOMMENDATION
Slide 14
5. In order to assess the major discrepancies in the accounts book Woolworths should
maintain a tight security system in self-serve check-outs. This will effectively eradicate
the theft of items and deliberate cheating in the self-served check out section.
Slide 16
6. Woolworths faces a severe crisis in staff performance and retention. One of the factors
that have stimulated the same is low employee motivation and morale. This can
simultaneously affected employee performance, meeting work objectives. In this case,
Woolworths should consider employee motivation as a fundamental aspect of HRM
(Brewster, Boselie and Purpura 2018). Like several other well-established business
organizations, have adopted the systematic personal counselling through the employers’
health schemes (Taneja, Sewell and Odom 2015). The same aims to provide aid and
assistance to the employees or their family suffering from excessive stress and anxiety.
Career counselling will be one of the constructive ways through which Woolworths can
retain old and talented employees and prevent them from choosing alternate career
options or better organizations.

11WOOLWORTH STRATEGIC PROBLEMS AND RECOMMENDATION
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