Analyzing Woolworths: Strategic Theory in Management Practice Report

This report provides a detailed analysis of Woolworths' strategic theory and management practices, focusing on its marketing strategies, competitive advantages, and overall business performance. It begins with a background of the company, highlighting its establishment, market share, and competitive landscape, including key competitors like ALDI and Coles. The report examines Woolworths' current marketing strategies, such as offering discounts and investing in data mining to understand customer behavior. A strategy intent analysis is presented, emphasizing the company's vision for building integrity and enhancing market share. Porter's Five Forces model is applied to assess the bargaining power of buyers and suppliers, the threat of new retailers and substitute products, and the rivalry among competitors. The report concludes with recommendations for Woolworths to focus on innovative marketing approaches, improve customer satisfaction through fast billing, and maintain a competitive edge in the market, particularly for products like Nudie Juice.

Strategic theory and management practice

Strategic theory and management practice
Table of Contents
Background of the company.....................................................................1
Current marketing strategic......................................................................1
Strategy intent analysis with diagram.......................................................3
Porter five force model.............................................................................4
Recommendation......................................................................................5
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Strategic theory and management practice
Background of the company
Woolworths established its business in 1924, by opening the first store in Sydney. The outlet
which was opened by the company was a bargain basement outlet. In 2012, the company
enhanced its market share and is one of the largest supermarket chains in Australia and New
Zealand. The company offers various brands like BWS, Dick Smith Powerhouse and Tandy. The
company is the largest retailer in New Zealand and Australia. There are approximately 840
supermarkets in Australia and 156 supermarkets in New Zealand. There are various competitors
present in the market like ALDI, Coles and Metcash. The main aim of the company is to
enhance the satisfaction level of the customers by offering quality products in the market. The
founder of the company is Percy Christmas, George Creed and Stanley Chatterton. It has been
seen that headquarter of the company is located in Bella Vista, New south Wales. There are more
than 20,000 workers who emphasizes on enhancing the overall growth of the company and they
work in different departments like support office, stores and distribution center (Woolworths,
2018).
The company also sells the juice product in the market. One of the juice product offered by the
company is Nudie Juice. By considering this product overall analysis will be made in relation to
the strategies considered by the company to achieve success in the market.
Current marketing strategic
It is important for the company to focus on marketing strategies as it can help in accomplishing
the goals and objectives of the company. To promote the products of the company like Nudie
Juice there are various marketing strategies considered by the company as it can help in boosting
the overall market share of the company in the highly competitive market (Azeem et al., 2018).
One of the best strategies considered by the company is related to offering discounts and offers.
The company focused on offering the products at low price in comparison with their competitors
like Coles. According to the company, the marketing strategy is related with the fundamental
goal of attaining the sustainable competitive advantage and also it has enhanced the sales. For the
company there are two competitors, Coles and Aldi (Berman, 2015). So, to compete with these
companies the company focused on reducing the price of the products so that large market share
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Strategic theory and management practice
can be grabbed in the market. The company also invested million dollars to repair so that its
price position and the perception off the customers can be maintained (Newsdaily, 2018).
Also the company focused on larger, neighborhood based supermarket stores so that it can be
easy to capture the big family. This is also one of the best strategies that assisted the company in
boosting the brand image in the market. Also the company considered subtle advertising
messages which boosted the sale of the company. It has been seen that price cannot be one of the
factor but to enter into the store and the experience which is derived from there is one of the
important factor which is considered by the customers in the market. Woolworth also invested in
data mining to having proper understanding of the shopping behavior of the customers and it has
also been done so that improvisation can be made on the store presentation (Newsdaily, 2018).
The main aim of the company is to enhance the market share and it has also been done by the
company by investing on the digital platform. The main aim of the company is to attract the
attention of the customers and on website the products are offered for sale so that customers can
purchase it easily (Rundle-Thiele, Dietrich and Kubacki, 2017).
For example: On the official website of the company, the company introduced Nudie juice by
giving a discount of $1.50 and also the product is mentioned under the separate column related to
“specials”. The best strategy considered by the company is giving product description of very
product so that customers can easily take their own decisions. Under the Nudie juice product the
company mentioned the detail of the product with an attractive tagline. The tagline used is
“Naming your newborn is never easy”. So, this is one of the best strategies considered by the
company as it can help in boosting the market share of the company in the competitive market
and also it will help in maintaining the brand image.
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Strategic theory and management practice
(Source: Woolsworth, 2018).
Strategy intent analysis with diagram
The main vision of the company is related with building integrity. The company emphasizes on
maintaining the value and quality of the products so that it can be easy to attain profits. The
company employs 201,000 team members who are serving over 29 million customers across
every brand. The company is also the trusted partner with thousands of the local farmers and
manufacturer. So, the strategic analysis of the company is related with enhancing the market
share so that it can be easy to achieve success (Giacalone et al., 2016). It has been seen that in
comparison to the other competitor Coles the company achieved more sales. It is just because of
the vision they have to accomplish their set goals and targets in the competitive market. In 2018,
the company is achieving the maximum sales of more than 6% whereas Coles achieved the sales
of maximum of 4% ( ABC, 2018). So, the overall sales of the company have been enhanced by
having proper strategic analysis towards the overall activities.
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Strategic theory and management practice
(SOURCE: ABC, 2018).
Porter five force model
Bargaining power of the buyers
It has been analyzed that majority of the consumers of the company are the individual buyers
who are have strong bargaining power. The company reduced the price of the products so that it
can be easy to attract the customers towards the products (Pickles, Barrientos and Knorringa,
2016). The nudie product of the company is reduced by the cost of $1.50 so that customers give
more preference to the products of the company. So, discounts and offers are given to the
customers as it can help to enhance the market share in the competitive market.
Bargaining power of suppliers
In context to Woolworths it has been seen that the bargaining power of the supplier is low as the
company emphasizes on Safeway supermarkets and also they is less dependence on the
suppliers. It simply states that the bargaining power of the supplier is weak. The main reason is
related with the market share of the retailers in Australia and New Zealand and also the huge
products are sold to this sector like nudie product in Woolworths (Grundy, 2017).
Threat of new retailers
It can be stated that threat of new retailers is high as to set a supermarket there is a huge
investment requirement and there are many companies who are leading the market. So, the
growth of the new entry can be less if comparison is made with the companies like Coles and
Woolworths (Steenkamp, 2017).
Threat of substitute products and services
The company has to have high competition in the market. The substitution of the products can be
done easily by the company as there are many supermarkets who are offering the same products.
Like nudie juice can also be purchased by the customers from Coles. So, it is important for the
company to lower the price so that it can be easy to boost the sales (Kew and Stredwick, 2017).
Rivalry among the competitors
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Strategic theory and management practice
There are many strong competitors present in the market like Myer and Coles. The highly
competitive market is enforcing the companies to consider the effective strategies so that
differentiation can be done and also growth can be achieved in the market (Arli et al., 2013).
Recommendation
So, by analyzing the overall factors it is necessary for the company to focus on marketing
approaches so that the products like nudie product can enhance their market share. These types
of products should be offered by the company at low price so that competition gives preference
to company and avail the services offered by them. By reducing the cost of the products in
comparison to the competitors like Coles and Myer, it will help the company to boost the
customer base in the market.
It has been recommended that company should also emphasize on considering the innovative
approaches which are not considered by any competitors. Like vouchers and contests should be
arranged in the outlets so that customers get attracted towards the products and services offered
by the company. This is one of the best ways that can help to maintain the competitive advantage
and will also enhance the market share. It is necessary for the company to consider the technique
related to fast billing. In this the customers should not stand in a queue to purchase the products
but billing should be done through automatic machine. It will save the time of the customer and
also boost the satisfaction level of the customers in the market.
References
ABC.2018.News. [Online]. Available from https://www.abc.net.au/news/2018-03-16/coles-vs-
woolworths/9555270.[Retrieved from 15 December 2018].
Arli, V., Dylke, S., Burgess, R., Campus, R. and Soldo, E., 2013. Woolworths Australia and
Walmart US: Best practices in supply chain collaboration. Journal of Economics, Business &
Accountancy Ventura, 16(1).
Azeem, M.M., Baker, D., Villano, R.A., Mounter, S. and Griffith, G., 2018. Food shoppers’
share of wallet: A small city case in a changing competitive environment. Journal of Retailing
and Consumer Services, 43, pp.119-130.
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Strategic theory and management practice
Berman, B., 2015. How to compete effectively against low-cost competitors. Business
Horizons, 58(1), pp.87-97.
Giacalone, D., Wendin, K., Kremer, S., Frøst, M.B., Bredie, W.L., Olsson, V., Otto, M.H.,
Skjoldborg, S., Lindberg, U. and Risvik, E., 2016. Health and quality of life in an aging
population–Food and beyond. Food quality and preference, 47, pp.166-170.v
Grundy, T.D., 2017. Dynamic Competitive Strategy: Turning Strategy Upside Down. Routledge.
Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context. Kogan
Page Publishers.
Newsdaily .2018. How Woolworths is winning over consumers. [Online]. Available from
https://thenewdaily.com.au/money/finance-news/2018/02/23/woolworths-half-year-profit-coles/ .
[Retrieved from 15 December 2018].
Pickles, J., Barrientos, S. and Knorringa, P., 2016. New end markets, supermarket expansion and
shifting social standards. Environment and Planning A, 48(7), pp.1284-1301.
Rundle-Thiele, S., Dietrich, T. and Kubacki, K., 2017. Why We Need Segmentation When
Designing Social Marketing Programs. In Segmentation in Social Marketing (pp. 197-214).
Springer, Singapore.
Steenkamp, J.B., 2017. Global Brand Strategy: World-wise Marketing in the Age of Branding.
Springer.
Woolsworth.2018.Nudie product . [Online]. Available from
https://www.woolworths.com.au/shop/productdetails/716767/nudie-nothing-but-breakfast-juice.
[Retrieved from 15 December 2018].
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