Woolworths' Business Strategies: An Essay.

Overview of Woolworths Supermarket

Discuss about the Business Strategies of Woolworths.

Woolworths supermarket, a famous retailer chain in Australia holds at least 78% market and it encounters a strong level of competition from Coles, which is another grocery and supermarket outlets in Australia. Woolworths enjoys duopoly in the Australian supermarket industry with 82% market share. The specialisation of Woolworths involves selling vegetables, meat, fruits, daily stationeries, DVDs and magazines (Woolworthslimited.com.au 2016). More than 981 outlets are operated in the various cities of Australia and headquarter of this company is in New South Wales. Brad Banducci holds the position of the director of Woolworths supermarket and the slogan of this company is The Fresh Food People. The sales revenue of this company is more than AU$40.123 billion at the end of 2015. The main agenda of Woolworths supermarket is to provide only 100% fresh products to their customers from the Australian growers and farmers.

The current growth of the business of Woolworths is solely based on the better understanding of the management regarding the actual demands and criteria of the consumers in Australia. Arliet al.(2013) have mentioned that the concept of retailing has been constantly changing in this contemporary era as it has a large scope and possibility of dynamic and exciting business future. Even the shopping behaviour and attitude of the customers are constantly changes and it is the major reason of the increasing business success of Woolworths supermarket in Australia. The business experts and the marketers of Woolworths have made effective strategies in order to determine a complete new phase of opportunity and growth. Like the other companies, Woolworths also keep it consumers in the priority list and every change in their business strategies are directed to provide a perfect shopping experience with high quality products to them (Phillipov2012). Woolworths supermarket helps its customers with a perfect facility of shopping when they want to with the online shopping website. The innovation in technology rapidly changes the online shopping trend throughout the world and the management of Woolworths engage software developer for making changes of the online shopping website in order to provide the customers more facilities and availability of products to the consumers. Even there are facilities of virtual stores with the help of mobile-apps and the perfect door-to-door delivery option. All of these strategies are made by the higher management of the company in order to increase the customer base and customer loyalty.

Major Strategic Issues

Woolworths encounter a problem of losing its existing loyal customers to its competitor companies, which directly influence its annual sales revenue and ultimate profitability. Woolworths Rewards strategy is another important strategy employed by the management, which is very significant loyalty program for its existing customers. After incorporation of these strategies, Woolworths supermarket enjoys at least 18 million customer base every week and this number is constantly increasing day by day. The online strategy of Woolworths involves the easy process of online shopping of products (Ariyawardanaet al. 2016). Even the marketers and business experts of Woolworths provide relevant and adequate information regarding every product, which they sell for helping the customers to choose their preferred products. Even Woolworths provide a great facility of choosing the products online and collect it from the supermarket outlets. The marketers  promotes, advertise and launch the new products with a vast use of social media platform, such as Facebook, Twitter, Snap chat, Instagram and blog in order to attract the new generation of Australia. There are different gift cards for different offered items by Woolworths. Baileyet al.(2015) have mentioned that customers are at the heart of any kind of business. Woolworths understand this and selected few customers as their corporate customers, who are very regular to buy products from Woolworths. Mobile money app strategy of Woolworths helps the customers to keep a track of the balance of gift cards and buy products online for availing doorstep delivery (Jie 2012).

The management of Woolworths after facing a severe strategic issue within the competitive retail market of Australia has recently introduced the online shopping website. Therefore, the management analyses the present trends and starts to offer products on online. Even, the innovation strategy of Woolworths involves fresh Sushi bars for the customers in order to offer them an appropriate choice of healthy meal. There is also outlet development strategy, which includes in-store facilities of collecting seafood from specific counter and selects a tasty sauce and the experts put it in a ready to cook bag, therefore it provides seafood of restaurant quality in home.According to Keith(2012), business strategy helps an organisation to achieve its goal and objectives within fixed period and holds thebest position within the market and hold desirable market share at the end of the annual year. Woolworths stocks strategy of lamb and beef is also outstanding as while storing these easily rotten products, the staffs follow the Meat Standards Australia in strict manner. The CEO of Woolworths, Ian Moir always concentrates on the profitability and costs down with proper implication wining strategies. Woolworths’ credit card strategy involves an automatic tracking of the purchase in the supermarkets. This shopping card also give pay back points to the card, therefore, the consumer can avail the discounts on their next purchase.

Losing Loyal Customers

Woolworths will face a huge level of competition from its existing competitor companies like Coles and Aldi in near future. Even there are possibilities of new entrants, which may come with innovative strategies to destroy the leading position of Australia. Therefore, Woolworths should change its present strategies in order to prevent the possibilities of new strategic issues that will hamper its business and brand name. There are also seasonal offer strategy followed by Woolworths supermarket, which gives the customers flash sales and discounted coupons for buying selected products. With all of these above-mentionedstrategies,Woolworths enjoys its superbly managed and unique retailer position in Australia.Gupte and Doyle(2014) have mentioned that all of the strategies are made by the business experts in order to increase the sales revenue for easy success of an organisation. The brand strategy of Woolworths plays the role of winning strategy, as this company always provides fresh products to the customers for retaining the customer loyalty. With employing this particular business strategy, Woolworths creates a strong and vast customer basein the various cities of Australia (Woolworthslimited.com.au 2016).

As the population of Australia and New Zealand is constantly increases, therefore, Woolworths faced campaigning and promotional issues i order to attract a large number of consumers. In the promotional strategy of Woolworths, the business experts and the marketers incorporate innovation and creativity in order to attract the new customers and retaining its existing customers. The marketers have used social media platform essentially in order to promote and launch new products, the seasonal sales, offer and the quality of the offered products in the supermarket and online shopping website. Woolworthscampaign strategy is also amazing as during the launches of any kind of new product, the management organises street campaigns and outlet campaigns for attracting the customers. The higher authority of this company also engages lump sum money on the branding and promotional strategies as it determine the future success of the entire business of Woolworths. Richardset al.(2012) have mentioned that every organisation creates strategies in order to compete with the competitor companies in this competitive business world. Similarly, all of the above-mentioned strategies here will help Woolworths to retain its strong and leading position in the supermarket retail industry and give a tough competition to Coles in Australian market. The business experts have thoroughly examined and analysed the current market situation before creating a completely new business strategies for business future. Even these strategies are updated with the constant requirements and demands of the consumers of Australia and no business strategies are fixed in this competitive market. According to Budisantoso and Teoh(2013), every organisation should transform the existing strategies in order to cope up with the contemporary market.  Woolworths as planned of rebranding of the private label ranges for satisfying the demand of shoppers of Australia and combating the gradual growth of the new threat Aldi, which operates its business in the supermarket retailer industry in Australia. All the strategies are made for fulfilling the expectations of customers and to maintain a good awareness of the quality and standard of food (Woolworthslimited.com.au 2016).

Issues Regarding Technology Challenge

According to Zurzoloet al.(2013), PESTLE analysis of an organisation usually helps to understand the existing external factors, which has a great power to impact the business operation of it.

Table 1: PESTLE Analysis of Woolworths

(Source: Lawrenceet al. 2013)

SWOT analysis helps an organisation to know about the internal environment while continuing the business within a particular marketplace (Bailey 2016). Even Woolworths’ SWOT analysis will help to understand the position of its competitor companies, like Aldi and Coles in the retail industry of Australia. However, Australian retail industry is stable and mature and there is less scope of the entrance of a completely new company, which can become the potential threat for Woolworths.

Table 2: SWOT Analysis of Woolworths

(Source: Chapmanet al. 2014)

Although Woolworths holds the leading position in Australian retail industry for its marvellous and potential business strategies, still the following recommendations will help this company to increase the market share.

• The management of Woolworths should employ strategies that may reduce the operation costs.
• The management should engage more number of suppliers than previous in order to reduce their domination.
• The management should employ completely new strategies, which are more consumers focussed.
• The business experts should offer relevant policies, which will attract the foreign investors and trade partners.
• The management should communicate clear and transparent expectations and objectives to the associated employees as they are also an essential part of compelling business future.
• Woolworths should encourage the process of open communication in between the suppliers, consumers and the employees in order to understand the business activities in proper manner than previous time.

All these above mentioned recommendations are appropriate for Woolworths in order to continue its business operations in today’s competitive market. Rivalry is best for an organisation to grow, however, excessive rivalry may hamper the entire business activities of organisation. Woolworths has perfectly understood the process of their business future with proper and adequate incorporation of strategies and opens up a vast scope and possibilities for the suppliers and customers.

References

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Woolworthslimited.com.au (2016) Home Page Available at: https://www.woolworthslimited.com.au/ [Accessed on Sep 22, 2016]

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