Introduction of the Chosen Company
Woolworths is an Australian supermarket chain of the Woolworths Limited. The company along with Coles form the duopoly in the Australian retail industry. Woolworths mostly sell fresh vegetables, fruit, meat, packaged foods. In addition to this, it sells DVDs and stationary items as well. It operates in two formats such as the supermarkets and the convenience stores. The biggest achievement for the company was the acquisition of Safeway, which helped the company grow its number of stores. The acquisition did actually add 126 stores of Safeway. However, despite of the achievements that the company has, it has very ignorable international presence. The move is up against the strategies of other super market giants in Australia such as Aldi (Woolworths Online, 2017). This is a fact as well that there are many potential markets across the globe where companies as such of Woolworths can have solid market. Some potential markets such as the United States of America, China, and India have potential consumers who can actually make such concepts successful. Being the marketing manager of the company the learner has decided to enter into the Indian market. The changing shopping behaviour of the country has already attracted many multinational companies such as Walmart, Starbucks, Amazon, Subway, and Burger king Worldwide. The main purpose of this assignment would be to audit the environment of the chosen market India. Moreover, this paper would research the business feasibility of Woolworths with the chosen market India.
Vision, Mission and Objectives
“To be loved by every group such as kids, family leisure and home” (Woolworths Online, 2017)
“To provide its customers with its stores at all the possible locations” (Woolworths Online, 2017)
Following are the list of objectives for the Woolworths supermarkets: (Woolworths Online, 2017)
- To offer excellent customer service
- To generate a sustainable sales of foods
- To provide values to the shareholders with a potential business success
It offers various products such as fresh vegetables, fruits, meat, packaged foods and different other groceries. In addition to this, it also offers stationary items and DVDs. Loyalty schemes are provided to customers that ranges from 4-cent to 10-cent depending on the limit of shopping. Customers can avail fuel of the given values at the different Caltex Woolworths petrol stations (Woolworths Online, 2017).
· Highly unstable political environment
· Two big political parties such as BJP and Congress
· Opposition party never supports even the best ideas of the government in action
· State run unions have significant reputation in some locations such as in Kolkata (Mitra, 2012)
· One of the highly developing economy of the world
· The highly growing economy has attarct6ed many foreign multinational brands such as General Motors, Toyota, BMW, Mercedes Benz, Honda, Ford, Hyundai and Volkswagen
· Attracted many foreign investors
· Massive resources of natural resources such as coal
· Present government is supportive to many foreign investments and business (Cassen, 2016)
· Second most populace country in this world
· Various groups of people live in this country such as Hindus, Muslims, Christians, Jews, Punjabis etc.
· Shopping behaviour depends hugely on the age group such as the children who rely on their parents to make decision on any purchase
· Shopping habit is highly shifting from the traditional shopping on the roads to the shopping inside the multiplexes or the malls
· Festive shopping happens to be in an earth shattering way
· Going out to have some foods and snacks have mostly become the trends of family groups and the youngsters (Lambert, 2017)
· Technologically the country is very stable
· It has numerous scientific research centre in the country such as the Bhabha Atomic Research centre
· Technological advancements have also enabled them to bring some renowned Smartphones such as Micromax
· E commerce platform is at high boom in this country (Malhotra et al., 2013)
· Legal proceedings in this country is very slow that generally takes much time to resolve an open case
· Labour costs is cheaper in this country
· Employers need to sign an agreement with the employees before they can start their participation with the selected company (Shira & Devonshire-Ellis, 2012)
· Most parts of this country is highly polluted especially the metropolitan cities in this country
· Some cities are highly flooded areas such as Mumbai
· High variations in climatic conditions such as very high cold in places like Kashmir, Himachal Pradesh, Darjeeling whereas very hot places like Rajasthan (Dyson, 2014)
The highly unstable political situation in this country is a threat to the start-up of a business but at the same time, the local government proceeds with the proposal despite of high opposition from the opposition party. The cheaper labour costs in this country are a very useful asset for any organization that aspires to expand its business into this country. Varying climatic conditions in this country is an opportunity to the foreign companies where they can actually produce diverse range of products to lure the attraction of a vast customer range. The technological advancement of the country and the attraction of Millennials customers towards the Smartphone are both good assets for foreign companies. This is perhaps changing the shopping habit of Indian customers. The youths of this country are very active in e commerce platforms, which they use to sell or buy any selected product. This is good for the foreign companies as well because they can exploit the hidden opportunities in this country with their high-end offerings. A variable climatic condition in the country is another good opportunity for the foreign companies because they have their chances to bring variations in their offerings. They can target different climatic condition with their different offerings. Foods that produce much heat inside the body are highly suitable to cold places such as Kashmir. The high population in this country and an option for varied offerings would certainly enhance the potentiality of foreign business in this country. Some foreign companies such as Walmart, Amazon, Apple, McDonalds and KFC are already leveraging the benefits of potential customers in this country.
· Strong spotlight on Australian foods
· Multiple formats of retail stores such as Big W that offers everyday low prices to its customers
· Efficient management of supply chain
· Huge reliance on the Australian market
· Less exposure to the international market
· Quite vulnerable to the political and economical changes in the domestic country
· Highly growing retail industry in some other potential markets such as India and China
· Large number of infrastructure development in the retail industry of India
· Increasing exposure rates of foreign companies in the Indian market
· Huge competition in the home country such as from Coles and Aldi
· Shifting trends of Australian customers as they are becoming highly concerned for savings
The high competition in the home country from other competitors such as Aldi and Coles is enhancing the problem for the company in Australia. In addition to this, the changing political and economical condition in the home country might anytime affect the business of the company. This is because they have less exposure to the international business. The huge reliance on the domestic market has questioned the sustainability of the business in the future. Customers are becoming more concerned for savings, which might be a concern. This would reflect on their shopping behaviour and would give birth to a competition to offer the cheapest prices for the products. The high vulnerability of the Australian market makes this viable for the company to think for its business expansion into some international markets. The suggested international location for the expansion of the business is India, which would be a good move for the company because of the favourable consumer behaviour in India.
Porter’s five forces are very helpful in analyzing the competition in the retail industry in India.
Figure 3: Competition analysis of the Indian retail industry
Source: (Shira & Devonshire-Ellis, 2012)
Bargaining power of suppliers - This is low because there are many suppliers available who can supply the required materials at the most affordable prices. For example, wheat is cheaper in some parts of the country such as Uttar Pradesh and Punjab (Mani, Agrawal & Sharma, 2014).
Bargaining power of buyers – It is very high because most of the population still rely on the traditional format of shopping such as at the road streets market places. Customers have large options to choose from for their choice of products (Richa, 2012).
Threat of new entrants – It is low because of the complex political scenario in the country. Foreign companies such as Walmart have still no retail store in this country (Bhattacharyya, 2012).
Threat of substitute – It is medium because in recent times the shopping styles of Millennials customers have changed noticeably. They are moving to supermarket kinds of concepts such as Big Bazar and Food Bazar (Bhattacharyya, 2012).
Degree of rivalry – Rivalry among existing competitors are high. Big Bazar chain was the first to incept the concept of shopping the fruits and vegetables at some shopping places. Citi Mart and Food Bazar followed it then. However, there is high competition in between different competitors (Bhattacharyya, 2012).
Woolworth’s supermarket expansion into the Indian market would face tough competition from local brands such as Big Bazar. However, Woolworths’ strategy in Australia to offer everyday discounted prices to customers would certainly click in India. If the company succeeds in getting approval from the government, it can certainly have a good business in India. The high population of the country and their changing shopping habits would be the potential opportunities for the Woolworths Supermarkets.
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