$20 Bonus + 25% OFF +
Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!

Environmental Analysis Of Woolworths

tag 116 Downloads9 Pages 2,117 Words tag Add in library Click this icon and make it bookmark in your library to refer it later. GOT IT


Discuss about the Environmental Analysis of Woolworths.



The Woolworths is a company that operates the grocery and retail business. It is the largest company in Australia and has further expanded to New Zealand. Woolworths was established in 1924 and has a significant market share of about 40% in Australia and is ranked 2nd out of 2000 retail companies in Australia (IBIS world, 2016). In 2016, the company had around 205,000 employees and the number is expected to increase as the company continues to open more branches. It has invested in many portfolios and operates supermarkets, Thomas Dux, food for less; petrol; liquor; general merchandise; home improvements and hotels and gambling. There is a fierce rivalry between Woolworths, Aldi, Coles and others where both deals in the retail business. However, the ever-changing business environment especially the external factors are a great challenge for the company. The problems are identified through the PESTLE analysis, and both the political, economic, social, and legal factors have significantly affected the company performance.

It is, therefore, imperative for the management to maximize the opportunities and its strengths to remain competitively strong. However, by analysing the internal environment of Woolworths, it is quite clear that optimizing on the company’s positivity has been the primary strategy that has resulted in the significant growth. In getting a complete picture of Woolworths regarding the internal and external environment, PESTLE and the Porters Five Forces have been explored.


Industry analysis

The grocery industry has significantly created employment for many people in Australia. As the employment rate increases, unemployment level reduces. Thousands of people have hired to work in the stores, located at various points in Australia. The industry has therefore improved the Gross Domestic Product (GDP) of Australia and spurred more economic developments. The lifestyles of individuals have improved as they can meet some of their dreams from the income earned from employment (Byrne, et al. 2016). The recent reports published by the Australian Bureau of Statistics (ABS) stressed the contributions of the retail and grocery industry in building the Australian economy (ABS, 2016). For instance, in 2015, the retail and grocery industry contributed to 2.2 percent increase in the GDP (ABS, 2016).

Currently, the grocery industry in Australia is a fiercely competitive since the entrance of Aldi in the market. Apparently, Aldi has posed a threat to Woolworths’ differentiation strategy by applying pricing strategy. This strategy involves the offering of quality products at a low price. This strategy, however, has affected the market share that has been enjoyed by Coles and Woolworths for a long period (Pash, 2016). However, this competition that has been posed by the German Owned Aldi through price war has not significantly affected Woolworths and Coles profit. For instance, the company projects that for the next five years, the annual returns to grow by 4.1% to reach $105.1billion and a forecasted growth of 2.9% profits in 2016-207. This data simply shows how Woolworths is competitively strong in the industry (IBIS world, 2016).

In 2015, it surfaced that Aldi is stealing some market share from Woolworths where its graph increases every year. However, Woolworths has managed to withstand the market pressure for long, though the performance of 2016 dropped s shown in the graph (Woolworths Sales report, 2016). A significant investment of $90 billion has given Woolworths the opportunity to greatly invest in technology and hire qualified staff. From the study by Roy Morgan, the market share of Woolworths has reduced to 37.3%, whereas Aldi has risen to 12.1%. For Coles, the market share slightly increased from 31.8% to 32.5%, while IGA retained its market share of 9.7%.

The external environmental analysis of Woolworths

The external environment can be classified into two categories: the macro- environment and the micro environment. The micro environment is those factors that directly influence the organisation performance. They include customers, suppliers, intermediaries, competitors and the public.  On the other hand, the macro environments are those factors that affect Woolworths from outside. They include:  economic, social, technological, legal and demographic factors. Therefore, Porter five forces and the PESTEL analytical tools can be applied in the assessment of how macro and micro surrounding (Hanan, 2016).

The porter five forces

This tool examines the current situation and performance of a company. The areas that are assessed include the following.

Bargaining power of buyers: in the Australian retail trade, consumers have a wider variety of products and services to select. It is due to the availability of supermarkets and retail stores that provide necessity products to customers giving buyers high bargaining powers.  With the entrance of new players in the market that has consequently spurred stiff competition hence giving more powers to buyers (Porter and James, 2015). 

Bargaining power of suppliers: the retail trade being competitive, a significant number of the market share is taken by the majority. Therefore, suppliers have high bargaining power in the industry. In addition, the supply in foods is affected by the seasonal changes. In case the supply reduces due to changes in season, the suppliers usually have more powers. Woolworths Limited will adopt an efficient supply chain management to achieve their goal of customer satisfaction.

Threats of new entry: new firms which want to enter into the retail industry find it difficult because larger companies have already dominated the market. Hence, threats to new entry are considered to be lower to a company like Woolworths. This new entrance for instance Aldi has affected the profitability level of Woolworths (Mike, 2016). Perhaps, sales could have increased in the future where the market is now shared by close rivals.

Rivalry among existing firms: the Woolworths main competitors include Cole supermarket, Aldi, Asda, and more (Malcolm, 2015). They usually compete for high market share, and this makes the rivalry to be higher in the Australia retail trade.  This completion has affected the profitability level of Woolworths. The profitability has reduced because some of the customers that used to purchase products from Woolworths have now preferred shopping from competitors stores (ABC News, 2016).


The threat of substitute: these are products that can serve an alternative purpose as the existing one. The substitute products are always available (Low, 2015). To thwart this, Woolworths has embraced diversification and has offered consumers an opportunity to choose from the variety of products offered. Currently, it is also adopting the pricing strategy in Australia and in the international market, Woolworths is applying differentiation strategy to win consumers. These strategies will consequently result to increased sales hence profit maximization (Woolworths Limited, 2015).

Therefore, Woolworths should the understand these five forces and formulate viable strategies to enhance quality, provide what customers needs, employ sophisticated marketing strategy, control suppliers to be a cost leader and above all, it should totally incorporate technology in its processes. As a result, it will manage the competition and expand further (Kotler & Keller, 2016).

Legal-political factors

Apparently, it is imperative that all business organizations have no otherwise but to abide by legal provisions of the land fully. Woolworths has, however, instituted rules and policies in place that guides its staff to align with the constitutional imperatives of the land. They, however, understand the consequences of contravening the legal requirements and even employ law experts to advice when the management is uncertain of a particular matter. Moreover, Australia and New Zealand are countries that enjoy a long period of political stability (Tanya & David, 2015). The Economic relations inked between these two States have created a Conducive environment for the efficient operation of Woolworths.

However, the Woolworths performance has been affected in various ways. The political forces had negatively impacted the retail industry in Australia received a set blow when the government recently launched a campaign that aimed to block the developed companies like Woolworths from eliminating smaller retailers through unfair competition for the market. Therefore, the fair business policy enacted by both Australia and New Zealand Competition and Consumer Commission has significantly affected the performance of Woolworths. But because of the managements’ capability in establishing effective strategic measures, the company has managed to thrive in the industry and further command a significant market share (Woolworths Limited, 2016).

Technological factors

The technological breakthrough that is currently experienced has significantly affected how most businesses conduct their operations. Today, technological harnessing and innovations is a common trend that organizations are applying to sharpen their competitive edge. Woolworths has employed the technology in most of its operations. The Woolworths has used the green refrigeration technology to store perishable products. Also, the self check-out machine utilized by the company to scan, weigh and make payments significantly assisted in reducing the costs (Stannage, 2106).


Economic factors

These factors primarily deal with the performance of the country’s economic performance. It can be regarding the consumers’ purchasing powers, the exchange rates, inflation, among others. If the customers’ purchasing powers are too weak, the performance of the company is negatively affected. Also, the existence of inflation tends to raise the price of various products hence affecting the users buying behaviour.

Social factors

These factors include the demographic patterns and individual beliefs, norms, attributes and so on. It particularly covers people religion, language, gender, sex, age, population size, norms, etc. The demographic aspects in Australia keep changing. Consumers vary their demands according to technological changes, implying that they prefer consuming current products. Also, they consider purchasing products from organization leading in corporate social responsibility practices (Michel and Kannan, 2016).


Wrapping up, a keener analysis of Woolworths Limited internal and external environment through PES

TLE and Porters Five Forces apparently reveals that dynamic business environment has been a challenge. The growth and expansion focus have enabled it to enact strategic plans that align with both short and long term objectives. Furthermore, the unfavourable environmental metrics has also been a great challenge to the company that have affected the profitability level. Though the company still anticipate for more profits but the fact remains some of its customers have opted for cheap competitors’ products. The strong commitments towards ensuring that the customers are provided with the right products and creation of a healthy working environment to for the employees are part of the factors that have contributed to Woolworths’s success.



It is recommendable for Woolworths to:

Continue with establishing operational strategies that are in line with the industry requirement and within the organization ability. Then the management should give full support to ensure the strategies are implemented accordingly.

Invest in research and development as well as support creativity and innovation. These are the requisite that works hand in hand with technology and gives the company a competitive edge against rivals.

Lastly, the management should invest in imparting the relevant skills to the workers through training programs, mentorship, coaching to keep them informed of the company expectations.



ABS (2016) National Accounts, Quarterly Reports

ABC News, (2016) Woolworths posts $1.2b loss: food, petrol sales slump. Retrieved from:


Byrne D., Fernald, J. and Reinsdorf, M. (2016) Does the United States have a Productivity Slowdown or a Measurement Problem? Brookings Papers on Economic Activity, March.

Hanan A.  (2016). An Exploratory Paper on Strategy Implementation: Industry Look at Some of the World’s Most Profitable and Most Innovative Companies, volume 17, issue 4

IBIS world, (2016). Supermarkets and Grocery Stores in Australia: Market Research Report. Retrieved on 19th Jan, 2017, from https://www.ibisworld.com.au/industry/default.aspx?indid=1834

Kotler P & Keller (2016) Marketing Management 15th Global Edition published by Pearson Education Australia Pty Ltd.

Pash, C.  (2016). Aldi opens its battle with Coles and Woolworths in South Australia: Business Insider Australia. Accessed on 19th Jan, 2017, from: https://www.businessinsider.com.au/aldi-opens-its-battle-with-coles-and-woolworths-in-south-australia-2016-2

Low, C. (2015). Woolworths trails Coles on grocery prices: Macquarie analysis

Show, Sydney Morning Herald accessed 1st Feb, 2017, from: https://www.smh.com.au/business/retail/woolworths-trails-coles-on-grocery-prices macquarie-analysis-shows-20150708-gi7iyz.html

Malcolm, K. (2015). Supermarket Monsters: The Price of Coles and Woolworths' Dominance. Red back

Michel W. and Kannan, P.K. (2016). Marketing Analytics for Data: Rich Environments Journal of marketing, volume 80, issue 6. P. 97

Mike King, (2016).  ALDI is stealing market share from Woolworths Limited, The Motley Fool, Retrieved on 1 Feb, 2017.

Porter, Michael E., and James E. H. (2015).  "How Smart, Connected Products Are Transforming Companies." Harvard Business Review 93, no. 10: 97–114.

Stannage, T. (2106).‘Marketing help: Marketing Strategies that work.  Business Consultancy Services, weblog post, retrieved 19 January 2017, from: <https://timstannage.com.au/marketing-help/>.

Tanya, S.B., & David, G.  (2015) Strategic Management: PEST analysis. Volume 12

Woolworths Limited (2016). Annual report 2016: Retrieved from <https://www.woolworthslimited.com.au/ annual report/2015/files/Woolworths_AR_2015.pdf>.

Woolworths Limited (2016). Annual report 2016: Retrieved from <https://www.woolworthslimited.com.au/ annual report/2015/files/Woolworths_AR_2015.pdf>.

Woolworths Sales report, (2016).  "Full Year Results - Financial Year 2015, Page 21" (PDF). Retrieved 1 Feb 2017.


Getting academic assistance from MyAssignmenthelp.com is a wise decision. Many students, finding the answer to their queries 'who will Do my essay for cheap' are likely to find our services useful and beneficial. They no longer need to waste their time in typing 'can someone write my essay at cheap price', instead they can hire our cheap essay writers to complete the due papers perfectly within given deadline.

Most Downloaded Sample

HC1041-Importnace Of POS System In The Organisation

Download : 0 | Pages : 10

Answer: Introduction: This report will enlighten on the new technology known as point-of-sale system. Information technology strategies are adopted by every organisation whether large or small (Seethamraju 2015). The advantages are visible once the technology is adopted. However, small enterprises do not have enough resource and infrastructure to support information technology strategies (Brimblecombe Liddle and O'Dea 2013). Technology benefi...

Read More arrow

HI6006 Competitive Strategy6

Download : 0 | Pages : 7

Answer: Introduction This tool is one of the famous tools which are used to start proper strategic planning. Through this framework, it has been seen that power assistance can be given to the decision making process as it enables an entity to uncover opportunities for the entire success. Through this threats can also be taken into consideration before it gets burdensome. Through this analysis it can be simple to evaluate the niche market so t...

Read More arrow

NUR1201-Patient Experience Of Preventing Falls

Download : 0 | Pages : 7
  • Course Code: NUR1201
  • University: University Of Southern Queensland
  • Country: Australia

Answer: Introduction Evaluating risks of aged patient experience is critical in nursing related care (Bradley, 2012). The scope of current reflective argument applies Gibbs reflective cycle for evaluating a 75 year old male patient experience. William Taylor had faced immense challenge in public hospital and waited for a long period to get relief. The analysis evaluates the National Safety and Quality Health Service Standards to pre...

Read More arrow

MBA402 Governance Ethics And Sustainability10

Download : 0 | Pages : 10

Answer: Introduction This code of conduct is designed with the aim to ensure adherence to highest professional and ethical standards in the course of the conduct of the business of the Commonwealth Bank. In addition to this, the intention is to ensure the statutory and the legal compliance of the Corporations Act, 2001, Australian Stock Exchange, the Australian Accounting Standards, the International Financial Reporting Standards (IFRS) and a...

Read More arrow

MNG81001 Management Communication

Download : 0 | Pages : 4

Answer: Introduction Globalization and the information technology development have made a significant impact on the organisational communications (Barney, 2011). Human interactions between the dispersed individuals of the teams across the globe have been made easier with the aid of the virtual teams. The same practice is going to be implemented in the organisation, with the introduction of the new virtual marketing department at the Sydney he...

Read More arrow

Save Time & improve Grade

Just share your requirement and get a customized solution.

We will use e-mail only for:

arrow Communication regarding your orders

arrow To send you invoices, and other billing info

arrow To provide you with information of offers and other benefits




Overall Rating



Our Amazing Features


On Time Delivery

Our writers make sure that all orders are submitted, prior to the deadline.


Plagiarism Free Work

Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.


24 X 7 Live Help

Feel free to contact our assignment writing services any time via phone, email or live chat.


Services For All Subjects

Our writers can provide you professional writing assistance on any subject at any level.


Best Price Guarantee

Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.

Our Experts

Assignment writing guide
student rating student rating student rating student rating student rating 5/5

265 Order Completed

97% Response Time

Ken Campbell

MSc in Electrical Engineering

Wellington, New Zealand

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 4/5

1309 Order Completed

100% Response Time

Gemmie Chen

MSc in Nursing

Singapore, Singapore

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

440 Order Completed

99% Response Time

Jack Arens


London, United Kingdom

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

134 Order Completed

95% Response Time

Thomas Nelson

MS in Information Systems Technology with Specialization in Database Administration

New Jersey, United States

Hire Me

FREE Tools


Plagiarism Checker

Get all your documents checked for plagiarism or duplicacy with us.


Essay Typer

Get different kinds of essays typed in minutes with clicks.


GPA Calculator

Calculate your semester grades and cumulative GPa with our GPA Calculator.


Chemical Equation Balancer

Balance any chemical equation in minutes just by entering the formula.


Word Counter & Page Calculator

Calculate the number of words and number of pages of all your academic documents.

Refer Just 5 Friends to Earn More than $2000

Check your estimated earning as per your ability




Your Approx Earning

Live Review

Our Mission Client Satisfaction

I really like your assistance and the way you did my assignment.. Thanks a lot I’ll recommend you to my friends..


User Id: 343009 - 19 Nov 2019


student rating student rating student rating student rating student rating

You did amazing work thank you so much for your help. It is greatly appreciated, I would highly recommend this expert


User Id: 332633 - 19 Nov 2019


student rating student rating student rating student rating student rating

They made an excellent work, followed the directions carefully, I will definitely recommend this page to everyone. Thank you!


User Id: 259910 - 19 Nov 2019


student rating student rating student rating student rating student rating

Excellent work, they follow the directions carefully, I will definitely make another assignment with them! thank you.


User Id: 259910 - 19 Nov 2019


student rating student rating student rating student rating student rating
Have any Query?