Strategic Management Analysis For Woolworths Supermarket Essay.

Discuss about the Strategic Management. Supermarkets are having a big challenge from their competitor always in different cases, such as price, brands, and many more. So there are different analysis are required for the handling these challenge with the proper management strategies

The Woolworth’s supermarket was founded in the year of 1924. It is a grocery store chain, which is owned by the Woolworths Limited. It covers 80 % of the Australian market in this field. They are selling groceries such as vegetables, packaged foods, fruits, and many other things in a grocery store. They are also selling magazines, beauty products, stationary items, household products, health products and many other items. Besides, Woolworths is offering online services for those products, which are known as ‘HomeShop’. Woolworth’s supermarket is having more than 1000 stores across Australia.   They follow all the laws and rules according to government. They provide help and support to the customers (Barnes, et al., 2004).  

Woolworths is facing a huge challenge of the competition from other supermarket chains, such as Coles, IGA, ALDI, and many more. The company also bear losses because of above mentioned business icons in the field of supermarket (Barnes & Hunt, 2013).  

In this way, this report will discuss about different analysis theories include Macro environment, industry, company, competitor, and strategic analysis for solving major challenges for the Woolworth’s supermarket. Moreover, recommendations for the Woolworths will be discussed in the later section of this report.       

Supermarkets are having a big challenge from their competitor always in different cases, such as price, brands, and many more. So there are different analysis are required for the handling these challenge with the proper management strategies (Burn & Barnett, 2000).  

Macro Environment Analysis (MEA) is including factors of the company, which are changing different things of the company. Those factors are making deep impact on the company. It is necessary for understanding about the different factors of the company. Those factors are providing help for other analysis (Dennis, et al., 2002).  

Environmental standards are impact on the profitability of the company. It is affecting the supermarket according to the laws. It is also depended on the countries, such as USA is having different laws for environmental disasters.

Every company should know about the existing environmental standards in the market. They must know about the required things for the entering in the market. Following things are impact on the Woolworths supermarket, which are:

• Weather
• Recycling
• Endangered species
• Laws regulating environment pollution
• Attitudes towards renewable energy
• Air and water pollution regulations
• Attitudes towards ecological products
• Waste management under the rule and regulation

It is a relationship between the Sales and Time of an industry. Every industry grows in the starting of the business. Their sales are increases according to time in their introduction stage. This is a having slow progress but it is mostly positive in many industries.   Introduction of the industry is taking time few businesses are increasing in high rate of sales but mostly it was slow. Second stage of the life cycle is growth. It is the best stage of an industry in which they incises their sales according to time. In case of the supermarket, after introduction into the market they achieve a great growth in their sales. It is most valuable stage of an industry (Doolin, et al., 2003).

Macro Environment Analysis

Woolworths limited is also growing in the market as they are coming with new concepts in the market. Third, one is the maturity of the industry. In this stage, every industry is having their saturated profitability according to their input in the market. Woolworth’s supermarket chain is getting so much profit from this business. They are a making them a brand in the market for grocery store. They increase their store and item in their store for more profit. Last stage is decline of the industry. In case of Woolworths, they are having different competitors and sometimes it is happened because of increasing their industry in a huge level, which is not manageable by the industry. Mostly it is because of competitors in the market. It is also possible because of the bad services and products (Goldsmith & Flynn, 2005). 

Porter’s five-force model is explaining about the challenges of the industry. There are five forces for the industry, which are creating issues in the profitability of the industry. In case of Woolworths, they are facing big issue, which are competitors. It is also covered from other forces. Thetas of new entrants are facing by the Woolworths. It has so many competitors, which are new in the Australia. They break their business in few amounts but it is a big factor for the Woolworths (KPMG, 2018).        

Porter’s five forces are described about the threats from different things in the market for an organization. It is must require for an organization that they know about their threats for making changes in their strategies. It is a process for finding weaknesses of an organization. Company know about the threats and it is beneficial for making changes in the current processes of the organization.     

Woolworths is having a great compaction from the ALDI and Coles. They are facing so many issues but they put more efforts in the industry and change the thing, which are affecting their business.  They manage bargaining power of suppliers, which is the best way to increase their overall growth in the supermarket industry. They are also working for the bargaining power of the buyers. There are so many discounts and offers for the buyers, such as festival season’s discount. They changes rates of the products with low margins for attracting the customers. It is helping in their business ( Lupoff, 2016).   

Supermarket business is bases on the products and services provided by the organization. There are so many resources for the profits.  It is also depends on the capabilities of the access the system. Woolworths is managing their business with the online facility, which makes it different from others.  There are so many things, which are provides accessibility of the stores and products for the customers (Natalie, 2013).

Porter's Five Force Model

VRIO framework is helping to understanding about the different management strategies for making business more profitable.   

Valuable is the factor, which is affecting the competitive market. It is a process in which different advantage and disadvantages are occurs form the actions of the company. Rare is a factor, which makes industry different from others and it is providing advantages to the industry. Next step is Imitate, in which company gets temporary competitive advantages. Last one is value of the organization, which is for long-term advantages for the company. Woolworths limited is following this framework for the handling competition from other companies, such as Coles, ALDI, SAFEWAY, GIANT EAGLE, CAREFOUR, METRO, and many others (Salmon Expert, 2018).   

Competitor analysis: 

There are so many factors for handling the threats for the business. In case of Woolworths, they are having a huge competition from their competitor, such as Coles, ALDI, and Metro. According the Porter’s five-force model for the Woolworths limited, they are having huge competition from the Coles and ALDI in Australia (Sim Sheng & Wahidah, 2012).     

Woolworths facing external strategic factors, which are considered as threats for it. Rising of raw material is can pose threats for Woolworths. In order to improve products' standards amending the laws can also be a threat for Woolworths. Their main threat is no regular supply of products, which are innovative. It changes in their sale over period. Local distributors are also count as threat for Woolworths, as they provide fewer margins to them. Competitors are providing high margins to them and it is increase their profit.  Less skilled employees are also a threat for the Woolworths limited. Skilled workers are increasing their business and it is makes changes in their profitability. New environment regulation is also affects the business of the supermarkets (Suppiler Portal Coles, 2013).

Woolworths is having so many strengths in this competition of supermarket chains. Following are the straths of the Woolworths:

Leadership in marketing:

In Australia Coles and Woolworths are leaders in the field of supermarket chains. Woolworths cover 80 % of the market share. It is reduce threat of competition from others.

Segment Penetration:

Woolworths is working for both ends, they are targeting the wealthy class people for their innovative and costly products, which gives them high profits from sale of those products. Woolworths is also covering the lower value segments for making their value in the market. Therefore, they cover both ends.

Competitor Analysis

Managing Perceptions:

They are always working on the bases of perceptions and it makes their business in the middle class category. It is not about the prime or low category.

Employee policies:

Woolworths is having 202,000 employees in this business. They are having skilled employees for increasing the business. It is also providing a better market in the public. They are providing bonuses and benefits to the employees for their work. Therefore, they work with more courtesy. It is helpful for customer’s attraction (The Guardian, 2016).

Customer’s feedback:

They are taking feedback of the customers for the changes in the services. Customer’s feedback is helpful for making changes in the margins and strategies for future planning.            

These strengths are making Woolworths different from others but there are few opportunities for Woolworth’s supermarket. It is affecting the profitability of the Woolworths. Decreasing threats and increasing profit is the best policy of an organization. It is also found from the studies that innovation is making business more progressing, as they adopt new thing in them. Innovative products makes Woolworths profit.

Woolworths is a huge company in the field of supermarket chains. There is little recommendation on the bases of the different analysis:

• Regular supply of innovative products to the customers
• High margins to the local distributors
• Skilled employees for making growth
• Heath products for different peoples
• Manage buyer and suppliers in proper way

Conclusion

It is concluded from the previous parts of the report that, Woolworths is a biggest company in Australia for the grocery store. It covers 80 % of market share in the Australia in their field. It has lot of competitors but Coles is the biggest competitor for Woolworths in this business. This report concluded about the strategies for the Woolworths based on the different analysis, such as industry analysis, company analysis. Porter’s five-force model is explaining about the threats from competitors. Strategic analysis is providing a detailed view about changes in the working procedures of company for getting more benefits in the future.

Woolworths is also following the modern approaches for making their business more beneficial in this field. Woolworth is adopting digital technologies for increasing productivity and profitability for their business.

Finally, it is concluded that Woolworths can increase their business, if they follow few management strategies and reduce the competition.

References

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