Innovation in Business: Woolworths Supermarkets Business Model Project

This project analyzes the challenges faced by Woolworths Supermarkets in the Australian retail market, including declining sales and increasing competition from Aldi and the potential entry of Amazon. The assignment proposes a 'Bricks and Clicks' business model as a solution, integrating both offline and online shopping experiences. The analysis includes problem identification, proposed business model, benefits for customers and the company, critical success factors, and an evaluation of feasibility. The project emphasizes the importance of adapting to changing consumer behavior, especially among younger demographics, and the need for Woolworths to compete effectively in the evolving retail landscape. The project also includes a section on the quality of contribution and collaboration, detailing the teamwork process and how the group reached consensus on the proposed business model.

Running head: INNOVATION IN BUSINESS
Innovation in business
[Woolworths Supermarkets]
Name of the student:
Name of the university:
Author note:

1INNOVATION IN BUSINESS
Table of Contents
Introduction:....................................................................................................................................2
Business Idea:..................................................................................................................................2
1. Problem Identification.............................................................................................................2
2. Proposed Business Model........................................................................................................3
3. Benefits Generated...................................................................................................................3
4. Critical Success Factors...........................................................................................................4
5. Evaluation of Feasibility..........................................................................................................5
Conclusion:......................................................................................................................................5
Quality of contribution and collaboration:......................................................................................6
1. Contribution to the team..........................................................................................................6
2. Achieving group consensus.....................................................................................................6
3. Portfolio of materials...............................................................................................................7
References........................................................................................................................................8
Appendix........................................................................................................................................10

2INNOVATION IN BUSINESS
Introduction
Innovation is of absolute significance to react to the rising trends and have the capacity to
achieve a maintained business execution. The level of danger increases with the level of rivalry
in the particular industry. This specific examination is kept to the retail market business in
Australia. The supermarket store industry in Australia is exceedingly aggressive because of a
reality that there are giant market brands, for example, Coles. Furthermore, that the competition
policy is very favorable to new business. The study is in reference to the rising threats for
Woolworths in the form of Aldi and the upcoming entry of Amazon. There is a need for a model
which could help to compete against Aldi and Amazon and also help to increase the profitability
margin for Woolworths.
Business Idea
1. Problem Identification
Woolworths has two problems, the one is its declining sales and the other being the
changing pattern of shopping. The company has also struggled with its investment on online
platforms. Hence, there is a need for a model that could repair the damages being done. The
model must be capable to enhance the convenience level in stores and also the experience of
shopping. This is needed because the setting of shopping formats is now getting changed
(Thomsen, 2018). The 'Brick and Mortar' format of stores are currently observed as an obsolete
alternative by numerous customers, in particular, the youths. This is because of the shopping
interface and the simplicity of shopping which is second to 'Shopping Online' format. Youths
used to have the packed schedules in their colleges, working environments and others. They
scarcely have times to visit physical stores and buy the needful goods. A considerable number of

3INNOVATION IN BUSINESS
them oversee it during their week offs while others wish to spend their week offs on other
important works. What's more, the youths are anticipated as to be the customers of future as they
will do the maximum of shopping in the coming days (Omar, 2018).
The stated facts help to outline a few issues like Woolworths must find ways to cope with
the ongoing completion of the market and also the upcoming competition from Amazon.
2. Proposed Business Model
There is a need for a business model which could help to enhance the attracting capability
of Woolworths, so that, it better manages its declining sales and also gives a firm competition to
the upcoming Amazon service in Australia. Hence, it is recommended that Woolworths should
consider the “Bricks and Clicks Business Model”. It means having a presence over both the
offline and online. Woolworths has had offered to customers the online services; however,
completely failed to make the significant investment to the service (Knox, 2015). Hence, the
suggested model may not be a new concept but the ways of operation will be a lot different.
The model gives the chance to work both as physical stores and through the online format
as well. It can be effectively beneficial for customers and for business also. Curiously, it doesn't
likewise hamper the conventional values of physical stores. It just requires incorporating the one
or few of the stores with the online presence and offering the customers both methods of
alternatives. For example, they can possibly visit stores as usual or they can also book it online.
They can likewise collect their products after they have booked from the devoted physical store
or can also get it conveyed to them at their postal address (Kim & Min, 2015).
3. Benefits Generated

4INNOVATION IN BUSINESS
For customers: It gives customers the truly necessary alternative which is they can either
visit stores to get their goods or can also book it on through online service. Such framework
might be constrained to one or few stores which totally rely upon the management decisions.
Stores incorporated into the online framework will offer clients the numerous methods for
shopping and accept of items (Jones & Livingstone, 2015). They can either be in stores or also
book it from the online site. Furthermore, they can collect their items from stores or they can
likewise get it conveyed to their home. Subsequently, the method of shopping will be
significantly more advantageous. Customers will be able to shop even during their busy
schedules. Psychologically, customers have this tendency to observe the product before
purchasing it. This is also one of the drawbacks of online shopping (Pantano & Priporas, 2016).
For Woolworths: It is far less demanding for a reputed retailer to actualize the "Bricks
and Clicks Business Model" than for a new company. This is likewise favorable concerning the
aggregate expenses of creation. This can help to save on the wastage cost which is incurred due
to the shipping of returned goods (Jones & Livingstone, 2015).
4. Critical Success Factors
The recommended business model can have the number of critical success factors. It will
be ready to take care of the demand of changing shopping behavior of customers. The
recommended model will give both the conventional and the contemporary format of shopping.
Customers will have options to visit the physical stores and buy the required goods. They will
likewise have the alternative to booking it from the dedicated online site. Furthermore, it gives
the added opportunities of convenience, for example, collecting it actually from the particular
physical store or asking for a home delivery. Consequently, the shopping experience will be

5INNOVATION IN BUSINESS
substantially more helpful. Customers might have the capacity to feel the differences too.
Dissimilar to the internet shopping stages, customers will have the opportunity to watch the
goods by being in the physical stores. The proposed model will enable customers to observe their
product completely before purchasing it (Amin, Rezaei & Tavana, 2015).
5. Evaluation of Feasibility
This is challenging to remain cost-effective while managing the range of stocks.
Woolworths has struggled to reduce the cost of production as di by Aldi. Unlike Aldi, the range
of products is bigger in Woolworths. Additionally, the everyday discounted offers are the
additional burden. Managing of inventories has proved to be problematic for Woolworths. They
will be tested to reduce the total cost of production. The online service is manageable through
effective investments and management strategies (Wang, Chiang & Wang, 2015). It is
additionally less demanding for traditional retailers to actualize the recommended business
model. It is nearly trying for new companies. Established traditional retailers, for example,
Woolworths will discover this nearly easier to manage the costs associated with the online
service (Pappas et al., 2016). Effective marketing strategies such as the online advertisement, PR
and others can be used to promote the newly launched business model (Jackson et al., 2014).
Conclusion
Therefore, the proposed "Bricks and Clicks Business Model" is especially attainable and
gainful for Woolworths. Woolworths ought to consider the model keeping in mind the end goal
to create a solid battle with Amazon which is set to enter the Australian retail market.
Additionally, Woolworths, if possible need to follow the strategies of a similar kind as used by

6INNOVATION IN BUSINESS
Aldi to reduce the expenses from physical stores. If it happens, the possibility of success with
this model will be high.
Quality of contribution and collaboration
1. Contribution to the team
Developing a business thought is never a simple undertaking. It requires an exhaustive
investigation of the concerned business before advancing with the thoughts. Sometimes it is
problematic for a person to think of a point and create something deserving. Detecting the most
extreme difficulties, the other group individuals have demonstrated the required collaboration
which was additionally apparent in the conceptualizing thoughts. We as a group were
concentrated on the diverse thoughts and attempted to recognize the best feasible one. We did it
by examining the advantages and disadvantages of every idea from the group individuals. The
brainstorming technique had helped us to reach to a convincing segment and we were able to
identify the most feasible and suitable model "Bricks and Clicks Business Model".
2. Achieving group consensus
It is without a doubt hard to reach to the group consensus. We also confronted a ton of
challenges at the underlying stages. The conceptualizing procedure had created a list of model
and we had disarray for the best practical one. The genuine test was to choose the best model as
each individual from the group had trusted their model as the most suitable one. Nonetheless, we
never let our collaboration get hampered by such difficulties. We as a group could conquer the
issue by making the examination of the whole models based on their pros and cons. The
practicality of the model was additionally checked and henceforth, we finally settled with the
"Bricks and Clicks Business Model".

7INNOVATION IN BUSINESS
3. Portfolio of materials
Such activities require a portfolio development of the materials that are required. It is
important to work as a unit and maintain a strategic distance from any contentions and perplexity
during the project. Everyone including the learner also has contributed in building up the
arrangement of materials. We as a group had developed the portfolio such that it contains all the
fundamental components of a project. The portfolio had the diverse business thoughts from
various group individuals. It also had the pros and cons of the different models. Moreover, the
portfolio development along these lines had helped us to reach to a one most possible business
model.

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References
Amin, M., Rezaei, S., & Tavana, F. S. (2015). Gender differences and consumer’s repurchase
intention: the impact of trust propensity, usefulness and ease of use for implication of
innovative online retail. International Journal of Innovation and Learning, 17(2), 217-
233.
Jackson, M., Harrison, P., Swinburn, B., & Lawrence, M. (2014). Unhealthy food, integrated
marketing communication and power: a critical analysis. Critical public health, 24(4),
489-505.
Jones, C., & Livingstone, N. (2015). Emerging implications of online retailing for real estate:
Twenty-first century clicks and bricks. Journal of Corporate Real Estate, 17(3), 226-239.
Kim, S. K., & Min, S. (2015). Business model innovation performance: When does adding a new
business model benefit an incumbent?. Strategic Entrepreneurship Journal, 9(1), 34-57.
Knox, M. (2015). Supermarket monsters: The price of Coles and Woolworths' dominance (Vol.
6). Black Inc..
Omar, P. D. O. E. (2018). UK CONSUMERS'ADOPTION OF THE INTERNET FOR
GROCERY SHOPPING. AU Journal of Management, 3(1), 11-18.
Pantano, E., & Priporas, C. V. (2016). The effect of mobile retailing on consumers' purchasing
experiences: A dynamic perspective. Computers in Human Behavior, 61, 548-555.
Pappas, I. O., Kourouthanassis, P. E., Giannakos, M. N., & Chrissikopoulos, V. (2016).
Explaining online shopping behavior with fsQCA: The role of cognitive and affective
perceptions. Journal of Business Research, 69(2), 794-803.

9INNOVATION IN BUSINESS
Thomsen, S. (2018). CHART: Here's how big Aldi now is in Australia. [online] Business Insider
Australia. Available at: https://www.businessinsider.com.au/chart-heres-how-big-aldi-
now-is-in-australia-2017-5 [Accessed 8 May 2018].
Wang, C. H., Chiang, Y. C., & Wang, M. J. (2015). Evaluation of an augmented reality
embedded on-line shopping system. Procedia Manufacturing, 3, 5624-5630.

10INNOVATION IN BUSINESS
Appendix
Key Partners
 Effective
relationship
with
suppliers
 The third
party
providing
the IT
solution
Key Activities
 Cost-
effective
strategies
and
implementati
on of
recommende
d model
 Training to IT
department
professionals
in
Woolworths
Supermarket
Value Proposition
 Pioneer of
offline and
online
shopping
 Incremented
convenience
 Enhanced
service
experience
Customer
Relationships
 Increased
customer
retention
rates
Customer
Segments
 Existing and
the
Generation
Y
customers
Key Resources
 IT team
 Third-party
IT service
providers
 Marketing
channels
Channels
 Social sites
 Public
Relation
(PR)
activity
 TV Ads
Cost Structure
 For third-party IT service provider
 Wages to the third party and the employees who
will be dedicated to the after implementation
service and checkup of the new model
 Marketing campaigns
Revenue Streams
 Incremented sales from Brick & Mortar
Stores and also from online service
Table 1: A Business Model Canvass