Understanding the Value Chain Model through Woolworths Analysis

This report delves into the Value Chain Model, a strategic management framework used to analyze a company's internal and external environments. It explores the model's components, including primary activities like inbound logistics, operations, outbound logistics, marketing and sales, and service, as well as secondary activities such as procurement, human resource management, technological development, and infrastructure. The report then applies this model to Woolworths, an Australian supermarket chain, examining its operations, supply chain, and strategic decisions. The analysis highlights Woolworths' strengths in areas like supplier relationships, operational effectiveness, and its use of technology. Furthermore, the report reflects on the model's effectiveness in assessing Woolworths' competitive advantages within the Australian market, emphasizing the importance of human resources, technology, and stakeholder relationships in achieving business objectives. The report concludes that the Value Chain Model is a critical tool for companies to assess their performance and gain a competitive edge in the market.

Businesses environment

Business Environment 1
Introduction
Business environment is the summary of all external and internal factors that influence a
business. There are several strategic management tools that assist the company to understand the
business environment. Value Chain Model is one of the strategic management frameworks that
help to estimate the internal and external environment (Ansoff et. al, 2018). The main aim of this
report is to understand the concept of Value Chain Model. In this report, a real life example is
also taken to determine the usefulness of value chain model. Woolworths has been taken into
consideration as a real life example in order to understand the Value chain model framework.
Value Chain Model
Value chain model is a process of review the organization. It is a strategic management
framework that helps to determine the internal and external resources. It defines the operating or
producing system of the company. The process of the company is made from the system and
structure that the company used to operates the business. It includes manufacturing system,
subsystem, transformation processes, inputs and outputs. This model defines the money,
materials, equipment, land, administration, buildings, labors, and managements. The value chain
activities also help to evaluate the costs and affects profits. The most of the firms engaged in
hundreds, even thousands of actions in the procedure of converting or producing the input into
output (Rothaermel, 2015). This framework classifies the company’s activities in two categories
such as Primary and Support activities. This framework is founded by Michael Porters in the
year 1985. The primary activities are inbound logistics, outbound logistics, operations, service,
marketing and sales. Secondary activities are procurements, technological development,
infrastructure and human resource management (Horng, Chang, and Chen, 2016).

Business Environment 2
These two categories and activities have been explained in depth and these are:
Primary Activities includes are:
Inbound Logistics- It defines the relationship with suppliers and it also contains all the activities
which contains store, receive and disseminate inputs.
Operations- It states the actions that are essential to transform inputs into outputs.
Outbound Logistics- It includes collect, stores and distributes the output activities of the
company.
Marketing and Sales- It describe the buying and selling the products and services by
influencing the consumers to buying the services.
Service- It contains all the actions after buying the products or services from any organization. It
contains the selling and delivery process so that the customer het get the services effectively and
enhance its brand value.
Secondary Activities contains:
Procurement- It is an acquisition process that contains raw material or resources for the
organization.
Human Resource Management- It contains all activities related to human resource
management such as developing, recruiting, compensating, hiring, training and (if necessary)
dismissing or laying off personnel.

Business Environment 3
Technological Development- It defines the software, hardware, equipment’s, processes and
technical knowledge which is related to the company’s transformation raw material into finished
goods.
Infrastructure- The Company serves the services to consumers due to which it is required to
contains the organization functions or departments together under a roof. The togetherness of the
functions and departments together in effective manner is called infrastructure. There are various
functions or departments in the organization such as finance, legal, quality assurance,
accounting, planning, public affairs, government relations and general management (Yanzheng,
Zengxiang, and Changhong, 2015).
Woolworths
Woolworths Group is a supermarket supply chain of Australian market that operates the business
in supermarket industry. It offers the consumer goods in Australian market such as and baby
supply, household pet products, selling groceries, beauty products and stationery items. The
organization works the business in different places of Australia like it has 100 of stores that
provide the consumers goods in which 19 of stores that are suitable and 976 are supermarkets.
The stores of Woolworths contain the similar logo and also relevant to the organization. The The
organization also establish the business in online market with the popular name “Home shop” in
order to bring the goods or services to wide range of area to serve the services to huge number of
customers (Woolsworth, 2018a).
The main vision of Woolworths is to maintain the relationship in order to generate the profit
which is the main motive of every company. The company attaches the customers with its
services that help to earn the long term profit and also increases the large numbers of customers

Business Environment 4
who visits the stores or the websites on regular basis or on any event. The company offers the
quality of products or services to customer on time that helps to shape the strong relation with
the consumers (Woolworths Holdings Limited, 2018b).
In order to accomplish the vision, the business has to set the mission of the firm. Woolworths
Group main mission is to improve the lifestyle of public, society and communities with its
services and CSR policies. The company also offers to the services to the different age of
customers such as children and families. All types of customers attracted towards the services of
the firm just because of employees of the firm as they offer quality of services. The company
mission statement is to provide all types of goods or services to consumer so that the consumers
cannot switch with the other company and it can easily attain the high competition advantage in
the market.
Internal Environment
Value chain analysis is highly popular in the market due to which the business easily implements
the value chain model in the organization. It helps to identify the company’s activities and also
the internal resources that are used to attain the objective and also helps to attain the competitive
gain in the market.
Primary Activities
It directly includes the process of manufacturing and selling the product to the targeted
customers. The company can improve the performance by analysing the activities by using the
value chain model (Jurevicious, 2013).

Business Environment 5
Inbound Logistics- The Company builds the relation with the suppliers as they helps the
company to receive, store and distribute the product in the market. It has been found that the
company has strong relation with the suppliers as it offers the different variety of facilities to
suppliers such as education facility to their children, training and development for their own
growth (Street, MacGregor, and Cornelius-White 2019).
Operations- The company owned the brands to sell their products in the market. There are
some products of the company has been manufactured with the quality of services to consumers.
The operation activities are highly effective according to their results of earning the high revenue
in the market.
Outbound Logistics- The Company store its products in warehouses, and also have 100 of
stores in different locations in Australian market. The stores in different location help to
distribute the goods and services to large number of consumers in the market.
Marketing and Sales- The Company provides the different sales discounts to consumers on
special events and also promote the services through advertisement due to which it attracts the
consumers towards the services (Avery, and Steenburgh, 2010).
Service- The Company provides the products and services to the large number of consumers in
the market. As the company offers the consumer goods due to which there is not such kind of
services after delivering the products to consumers.
Secondary Activities contains:
Secondary activities of the firm are the major process of the firm as it contains the technology
development, human resource management, procurement and infrastructure. The secondary

Business Environment 6
activities are totally related to improve the operation process and the development of the
company. These are examined by implementing it into the organization and these are:
Procurement:
The Company includes the different resources that help to attain the organization in Australian
market. The company sells the consumers goods with the different offers in order to attract the
consumers to attain the objective.
Human Resource Management- The Company has 100000 employees that helps to attain the
goals in the market. The staff of the firm attends the consumers in etiquettes and very decent
manner that helps to attract the consumers to achieve the high success in the market.
Technological Development- Woolworths believes in the implementation of technology that
includes the new analytical tool that helps to restores sales momentum. The company used the
technology development to improve the efficiency in order to make the transformation process
effectively.
Infrastructure- It is observed that the company has effective interior design as there are
different departments and stores in the market that are managed by the company to attain the
competitive advantage such as counter departments, women and men section, and there is also
kids section that helps the consumers to identify their goods and services in the market.
Reflection on value chain model
As per the above analysis, I have found that the company implements the framework that assists
the organization to estimate the business environment in the market. I found that Value chain
model not only benefits to examine the internal and external resources but it also helps to

Business Environment 7
measures the capability of the company to use the resources to achieve the competitive
advantage in the Australian market. This model measures the resources of the firm that are used
to get the effective result. I used the Woolworths as the company to examine the uses of value
chain model in the organization. After using the value chain model, it is observed that company
have 100000 human resources that helps the firm to operate the business in affective manner.
Human resource is the main assets of the company that can be used to achieve the objective in
the market (Gutierrez-Gutierrez, Barrales-Molina, and Kaynak, 2018). I also found that the
company uses the machines and technology for the development of product also to make the
transformation process effective. I also identified that the company build the relation with the
suppliers by providing the different services and build the relation with the consumers by offers
the discounts and the other facilities that helps to attain the objective and also grasp the market
share of the market.
All analysis points help the company to shape the strong relation with the suppliers and the
customers those are major stakeholder of the organization that supports to attain the competitive
advantage in the competitive market (Madsen, and Walker, 2015). According to me, each and
every organization has to adopt the Value Chain Model so that it can operates the business fairly
and effectively in the market.
Conclusion
From the above analysis, it is conclude that the value chain model is necessary for the company
to determine the internal and external resource. Value chain model is a strategic tool of strategic
management practice that helps the organization to measures its performances in the market. It is
recommended that all the companies have to adopt this model while analyzing or measuring the

Business Environment 8
resources and performance of the company in the market. It not only gains the competitive
advantage but also helps to improve the operating process of the company in the market. It can
be said that Value Chain Model of Strategic Management is the best source to determine the
internal and external resource that can be used to attain the advantage in the competitive
Australian market.

Business Environment 9
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Business Environment 10
Woolsworth. (2018a) About us. [online] Available from:
https://www.woolworthsgroup.com.au/page/about-us [Accessed 29/07/19]
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[Accessed 29/07/19].
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