A Case Study of Woolworths Samples for Students â€Myassignmenthelp

Woolworths is the biggest retail supermarket in Australia. It operates efficiently in the retail industry to achieve its principal goal of providing customers with high-quality goods at affordable prices, (Pod.com, 2008). Its effective strategies have seen it compete favorably with other companies in the Australian retail industry such as Coles. However, it is apparent that this company does not operate in isolation. It interacts with both internal and external environmental variables. It is, therefore, prudent to analyze its inner and external environment so as to identify its key stakeholders and their influence on the success of the company. In 1878, Frank W. Woolworth established the first Woolworths store in New York. This store later failed and forced him to change location and establish another store in Lancaster, (Woolworths Holdings, 2016). In 1879. This is how Woolworths emerged. It later expanded its stores throughout the United States, Australia Mexico, and Germany, among other countries, (Pod.com, 2008). This supermarket mainly deals in retail products. It conducts proper strategic planning that has ensured its remainder in the retail industry. These are units within an organization that perform independently to contribute to the profitability of the whole entity. Some strategic units in Woolworths include Woolworth’s general merchandise and clothing unit, financial services unit and Woolworth’s foods, division. These units can be evaluated regarding profitability, (Woolworths Holdings, 2016). The BCG model can be used to analyze these units, whereby, the underperforming units can be retrenched, and profitable units advanced further Woolworths mainly deals in general merchandise, clothes food and financial services. Its primary objective is to enhance customer satisfaction, by making its clients to derive a value of their purchases, (Woolworths Holdings, 2016). Its main market is derived from clothes market, consumables and general merchandise. It has stores in several countries including Australia, US, UK, Germany, and Mexico among other states. The analysis of the external environment of this supermarket can better be done using strategic tools of analysis like PESTEL analysis and Porter’s five forces. This analytical tool assesses the present position of the entire industry where the firm operates. This tool can, therefore, be used to analyze the Australian Industry as follows: Bargaining power of buyers: The negotiation capability of consumers in the retail industry in Australia is relatively higher. This is because several supermarkets are dealing in similar items, making the consumers have a large variety of goods to choose from, (Arli, Dylke, Burgess, Campus & Soldo, 2013). Bargaining Power of Suppliers: The Australian retail market consists of many players such as Tesco, Coles, and Aldi. It is therefore highly concentrated, and some particular big players have dominated the market share, (Humerston, 2013). This increases the level of bargaining power of suppliers to a certain threshold, and as such, it may be concluded that the bargaining power of suppliers is moderate. Threats of new entry: when the market is not very concentrated, there is always a threat to new players entering the market. They then create a stiff competition with already established firms, (Hubbard, Rice & Galvin, 2014) In Australia, larger companies have made it difficult for the new players to quickly enter into the industry, (Hummerston, 2013). This reduces the overall threat of new entry into the retail industry.   Rivalry among existing firms: The current companies always tend to pose threats to each other by devising better ways of approaching competition. These may include innovation, creativity and utilizing unique technology, (Hubbard, Rice & Galvin, 2014). In the Australian retail industry, there are few existing competitors like Coles, Wesfarmers, Asda and Woolworths among others. These supermarkets are competing against each other to achieve larger market shares, (Moscardo, Lamberton, Wells, Fallon, Lawn, Rowe & Renouf, 2013). Therefore, the threat of rivalry among the existing firms is relatively higher. The threat of substitutes: Substitutes refer to products that can be used alternatively, (Hubbard, Rice & Galvin, 2014). The supermarkets in the Australian industry deal in similar retail products, (Hummerston, 2013). Therefore, the consumers have no substitutes rather than consuming the retail products. The threats of substitutes in the industry are therefore relatively small. This is another essential analytical tool that can be used to evaluate Woolworths’ external environment. The application of this tool in assessing the external environment can be made as follows: Political: Political factors refer to government policies and regulations which affect proper operations of an enterprise, (Dockalikova & Klozikova, 2014). The political conditions affect the operations of retail stores in Australia including Woolworths. For instance, the Australian federal government launched a competition policy which bars established free players like Woolworths and Asda in eliminating competition, (Keith. 2012). The increasing dominance of these traditional supermarkets has resulted in developing retailers struggling to succeed in the industry. Economic: Economic factors refers to the market variables that affect the performance of a firm, (Mialon, Swinburn, Allender & Sacks, 2016). The decline in the economic conditions in Australia has hit the performance of Woolworths. Apart from the decline, some economic indicators- fluctuations in the value of currency, and the decline in value of the Australian dollar have negatively influenced Woolworth’s’ international operations, (Ulle, 2014) Social: For a company to operate efficiently, it must be compliant with the social expectations of the community on which it operates, (Hubbard, Rice & Galvin, 2014). The present trend in the Australian market indicates that there are high expectations of the community on social responsibility, (Hummerston, 2013). The companies operating in this country must, therefore, ensure they are socially sensitive. Woolworths must, therefore, take social initiatives that would ensure it is viewed as socially responsible. Technological: With the growth of technology and internet marketing, companies must ensure that they devise technologically updated ways of marketing and distributing their products, (Docklikova & Klozikova, 2014). Woolworths, in particular, has considered the utilization of green refrigeration technology so that it can store the perishable products for longer time durations. Environmental: Firms must always examine the impacts of their operations to the environment. This enables them to avoid environmental pollution, (Hubbard, Rice & Galvin, 2014). Woolworths is particularly affected by environmental factors in that its petrol and wine making businesses are executing adverse effects to the environment, (Keith, 2012). This has adversely impacted on the profitability of this company. Legal: Legal factors include rules and regulations imposed by the government that businesses have to comply with, (Mcguire, 2014). In Australia, the imposition of the carbon tax has affected Woolworths and the retail industry in general, (Hummerston, 2013). Taxes reduce the profitability of businesses as they have to pay a certain percentage of their income to the government. Woolworths interacts with both external and internal stakeholders. The evaluation of the impacts of internal stakeholders on the success of Woolworths can be conducted through internal analysis. This can be done by utilizing SWOT analysis model. This is a tool that can be used to examine the threats, opportunities, strengths, threats and weaknesses a firm may be exposed. The analysis of Woolworths using this tool can be conducted as follows: Strengths: Strengths refers to the unique capabilities of a company. The power of Woolworths lies on the fact that it is a market leader in the retail industry in Australia, (Mcguire, 2014). It also has reliable sources of capital and secure resources. The utilization of technology such as green refrigeration also acts as a strength of this enterprise, (Ulle, 2014). The company has also developed an excellent market position, making the customers acutely aware of its presence. Weaknesses: Weaknesses are the aspects of the business that are not entirely established. Competitors may usually take advantage of these shortcomings so as to gain a competitive advantage, (Helms & Nixon, 2010). In the case of Woolworths, some of its weaknesses may include failure of its brand to attain competitive advantage and negligible presence in the global market, when compared with other enterprises like Tesco. It also entered the online market at a later time as compared to other companies, (Keith, 2012). These weaknesses have led to the development of a stiff competition between Woolworths and other companies. Opportunities: Opportunities are gaps in the market that accompany can fill so as to gain a competitive advantage against its rivals, (Helms & Nixon, 2010). The Australian retail industry shows an excellent growth capability. Factors such as advancement in the supply chain, computerization, and consumer lifestyle changes have influenced the ability of retailers and provided a chance for growth, (Ulle, 2014). Woolworths have also tried to adopt multi-option marketing approach so as to keep up with the diverse customer needs. Technology is a major determinant of competition. Although this company has tried to embrace technology through such aspects as virtual marketing and Woolworths’ app, the Woolworths app has not been customized to address all the customers’ requirements. One of the growth opportunities available for this company is that it should customize the Woolworths app so that the clients can be able to locate the exact shelf in the store where a product is located. The company has enough resources and qualified technical staff. It should, therefore, grow in this line so as to gain a competitive advantage against its rivals such as Coles. Threats: Threats refer to the factors that may necessitate a company to be quickly thrown out of the market. Threats mainly sprout from competition, (Mcguire, 2014). In the Australian retail market, there exists a high level of competition posed by other companies such as Coles and ASDA. These companies represent a lot of threat to the development of Woolworths, as Woolworths has to administer strategies that would ensure it remains competitive. Apart from this, government intervention in the market significantly affects the growth of Woolworths within the Australian retail market, (Hummerston, 2013) The success of Woolworths in Australia critically depends on three factors; the emergence of real online businesses such as Amazon, the rise of companies that conduct marketing traditionally and online, and growth of real traditional firms. The key success factors of this entity are based on its strengths. These may include: Strong brand: Woolworths has established a strong brand name in Australia. It, therefore, has a pool of loyal customers who purchase its products, (Powell, 2016). Customer loyalty is the primary determinant of the success of any business as it ensures that the clients develop a preference to the products of a particular company. It’s a well-established company: Woolworths is well-established and known in Australia as a big retailer, (Feigin, 2016). This makes its products known to the customers. Many customers have therefore developed trust to its products making it able to sell its goods quickly in the market. It has also produced a steady customer based and a significant market share, which enhances its profitability through the sale of a large volume of retail products, (Keith, 2012). Excellent Reputation: Reputation refers to the respect a company develops among its clients. This can be accomplished by providing high-quality products that are accepted by the customers, (Hubbard, Rice & Galvin, 2014). Woolworths has developed a strong reputation among its clients in the retail market, (Ulle, 2014). This has made it more successful as compared to its competitors as customers develop trust and preference to its products. In conclusion, it is apparent that Woolworths is an open organization that interacts with both internal and external environmental factors. Its internal environment can be analyzed using SWOT model, while its external environment can be evaluated using Porter’s five forces and PESTEL analysis. The company has critical success factors such as brand reputation and market reputation. It is also old-established in the market making it have a strong customer base in the market Arli, V., Dylke, S., Burgess, R., Campus, R., & Soldo, E. (2013). 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