Group Assignment Sample PDF

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Group Assignment Sample
Strategic Management (Curtin University of Technology)
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Strategic Management
Assignment 2-project
Tutor’s Name Zuberia Hosanoo
Day/Time of Tutorial Monday/ 8:30 am
Date Submitted 28/10/2016
Word Count 7122
Executive Summary
This report was conducted with the aim to analyse the Australian supermarket industry as
well as the Woolworth brand so as to develop innovative recommendations which would help
the latter differentiate itself in a non-negligible way. This report analysed strategic issues that
Woolworth is facing, namely the consequent price-war, challenging and competitive climate,
increasing number of competitors and direct competition from the other industry giant, Coles.
The report analysed the company both externally and internally. The external analysis, which
was done with the help of tools such as the PESTEL, Porter’s 5 forces, a strategic map and a
competitor analysis, demonstrated that Woolworth is actually leading the industry but is
losing its market share and market dominance to new entrants, existing big brands (such as
Coles) and unable to compete on any other basis except price. Several opportunities were

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identified such as the change in consumer shopping patterns, increased desire to buy local
and organic products, increased use of technology and mobile devices as well as the
increasing attractiveness of the Australian supermarket to foreign brands- which is a threat.
The internal analysis, conducted through the use of the VRIO Framework, a Value Chain
analysis and a BCG matrix of Woolworths, allowed the identification of numerous of the
strengths and weaknesses of the company; the strong online presence, high financial
performance, leading position and valuable staff asset of Woolworths are a few of the
consequent strengths which were recognised. Also, a few weaknesses, such as the inability to
compete on other basis than price and strong bargaining power of consumers were also
identified in this analysis. External and internal analysis led to the development of the TOWS
matrix present in this report which further helped in creating innovative recommendations for
the brand.7 business level recommendations and 8 corporate level recommendations were
developed with the particular aim of helping Woolworths be innovative, maintain its leader
position and beat competitors in the differentiation race. Some key recommendations are to
focus on the human side and human contact between customers and employees, to place
specific QR codes on products, to collaborate with the popular game “Pokemon Go”, to
invest more in Data Analytics, to increase strategic alliances with ecological company, to
acquire land nearby their supermarket, to create an ‘ugly fruit and vegetables campaign and
to distribute the daily perishable goods to association for the homeless people.This report
was, however, limited in scope and analysis due to the limited information available on the
numerous – smaller – competitors of the brand which showed inability to judge the actual
threat they represent to the supermarket giant on the long term basis.
Table of content
Introduction..............................................................................................................................4
Strategic Issues.........................................................................................................................4
External Analysis.....................................................................................................................5
PESTEL Analysis...................................................................................................................5
Analysing the Industry based on Porter’s 5 forces.................................................................6
Strategic Group Map..............................................................................................................8
Competitors Analysis.............................................................................................................9

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Internal Analysis....................................................................................................................11
Analysis of resources capabilities- VRIO framework of Woolworths.................................11
Value Chain Analysis of Woolworths..................................................................................12
BCG Matrix of Woolworths.................................................................................................15
Strategy Evaluation- TOWS Matrix....................................................................................18
Recommendations..................................................................................................................20
Business Level Strategies.....................................................................................................20
Corporate Level Strategies...................................................................................................23
Conclusion...............................................................................................................................27
References...............................................................................................................................28
List of Figures and Table

Figure 1: Strategic Group Map of the Industry..........................................................................8
Figure 2: Value Chain Analysis of Woolworths......................................................................13
Figure 3: BCG-Matrix for Woolworth.....................................................................................16
Y
Table 1: Competitor Analysis for Woolworths........................................................................10

Table 2: VRIO Framework of Woolworths.............................................................................11
Introduction
The case study is based on the ‘Australian supermarket industry’; the chosen company for our
report is Woolworths. Throughout the report, Woolworth will be analysed more specifically
to identify the nature of its competitive advantage, followed by an analysis of what its future
actually looks like; different tools will be used for the internal and external analysis of
Woolworth. When it comes to the internal analysis, a SWOT-analysis will be conducted to
analyse the strengths and weaknesses; a VRIO-Framework to analyse Woolworths’ resources
capabilities, a Value Chain Analysis will also be performed and the BCG Matrix. The tools
used for external investigation include: PESTEL Analysis; Porter’s Five Forces; the
opportunities and threats under the SWOT-Analysis; and a strategic group map followed by
the competitors’ analysis. Besides all these, a TOWS-Matrix will be identified to come up

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with different recommendations that Woolworths could adopt to become even more
successful than it is right now.
Strategic Issues
Woolworths Supermarket first opened in Australia in December 1924 and was founded by
Percy Christmas; the brand is now a renowned supermarket in the Australian market as well
as in New-Zealand (Woolworth Limited 2016). With hundreds of stores across both
countries, and through acquisitions and various alliances, it has acquired a huge section of the
market share hence dominating the industry alongside Coles (Woolworth Limited 2016). The
supermarket brand sells all kind of product lines and possesses various sub-brands
(Woolworth Limited 2016). Despite its enormous presence in the industry, the brand is now
facing several issues to maintain its competitive edge and leader position. The heavy price-
based competition which Woolworths faces from both its direct and indirect competitors
(Hattersley, Bronwyn and Burch 2013) is one of the major factors that heavily incapacitate it;
competitive advantage in the industry can only be obtained through price cuts and low-
pricing. To maintain its competitive advantage, Woolworths has no other choice but to
heavily reduce its prices, thus preventing it from differentiating in other ways (Garg 2013).
This price war prevents Woolworths from effectively differentiating itself on other basis; this
is highly due to the high buyer power that is present in the industry. Moreover, the industry
itself is representing a strategic issue for the brand as both local and foreign competitors are
increasingly present (Ahmeti 2015); this saturates the market and leaves little place for
innovation, further growth and development. The shift in power structure, going from
supermarkets to the competitors, is also a strategic issue showcased in the case, as
Woolworths has to find a way to meet the constantly evolving and increasing demands of its
customers so as to remain competitive.
External Analysis
PESTEL Analysis
Political / Legal
Each state in Australia mandates that the Food Standards Code be adhered to. This means
packaged foods should have a nutritional information table on the label displaying the
quantities of energy, protein, saturated fats, carbohydrates, sugars and sodium as a percentage
of recommended daily requirements and per 100g or ml servings. This policy obliges the

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supermarket industry in Australia to display all the dietary information to prevent obesity
(Magnusson 2010).
Economic
The economic crisis has led to a decrease of disposable income in Australian households,
thus diminishing their purchasing power. The purchasing behaviours have also changed due
to the rise of the living costs where consumers are more inclined towards low cost products,
reducing their consumption of healthy products and luxury products (Radu and Radu 2014).
Social
The change in societal, attitudes and lifestyles is impacting the Australian supermarket
industry. People’s vision is more concerned about health and obesity, thus turning in favour
of healthy and organic products; the demand for low fat food and gluten free products are
also increasing (Williams et al. 2012).
The online grocery shopping has taken precedent with 1.2%, showing an increase of 0.9 %
over the last 2 years. This is particularly true with new families who have been shown to be
2.6 times more likely to do their shopping online (Woolworths Limited 2014).
There is strong indication of socio-economic differences in nutritional consumptions amongst

the Australian society, comprising of those with low revenues, low level of education and
those inhabiting in socio-economically underprivileged areas; they normally have greater
consumptions of energy and fat and also consume less fruits and vegetables compared to the
prosperous segment of the Australian society (Williams et al. 2012).
Adverse public views toward the food industry have been linked to the several socio-
economic imbalances mentioned above (Williams et al. 2012). For example, it has been
shown that, compared to wealthier families, people finding themselves lower down the socio-
economic ladder will often think negatively towards the availability, accessibility and price of
healthier goods from their local supermarkets. Such perceptions are directly linked to
consumers buying food products of a lesser quality.
Technological
Following the trends in technological development that has been observed in the Australian
market, Woolworths has transferred all the national organization staff to an instinctive

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technology: Google application platform, which intends to support Woolworths’ workforce to

function more proficiently and collaboratively so they can enhance the customer service
(Woolworths Limited 2014).
The Self-service checkouts in the Australian supermarket are raising an issue. Even if it
enables customers to go shopping and pay faster with electronic cards, Woolworths and Coles
stand to face losses as a result of increased theft using this technology in their operation
processes (Wynne 2016).
Environmental
Australian supermarkets and petrol chains can be linked through discounts and can offer
vouchers along with consumers’ purchases due to Woolworth’s acquisition of Caltex and
Coles with Shell even if the outlets of each are not geographically connected (Bloch and Nick
2014). It can be derived that Woolworth has an impact on the environment as they are
operating in the petrol sector and influence customer to buy more petrol with their discounts
strategy.
Analysing the Industry based on Porter’s 5 forces
The Porter’s Five forces analysis will be used to evaluate Woolworths’ industry-
environments by assessing their position in this competitive environment, and analyse what
the future of Woolworths is all about in the Australian supermarket industry.
Rivalry among existing competitors
There has been a significant increase in the number of businesses operating in this sector;
price wars keep emerging between of major players, whether big or small. Therefore, even if
Woolworth is one of the largest and is a well-known brand, they are facing a high degree of
rivalry within this industry, and these are creating limits to their market share, forcing the
company to continuously creating competitive and effective strategies in order to differentiate
themselves from competitors (Mathooko and Ogutu 2015).
Bargaining power of suppliers

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The more important suppliers are, the more powerful they are (Mathooko and Ogutu 2015).
With Woolworth and Coles possessing more than 70% of the market, many domestic
Australian producers are facing an enormously limited choice of intermediaries; however,
with the large number of suppliers: local and overseas coming up, the bargaining power of
suppliers will moderate.
Bargaining power of buyers
As supported in the case study, there is a change in the societal values, where people are
looking for a healthy living. With the growing numbers of competitors in this industry, higher
quality and efficient products, more innovation and more choices are being offered to buyers
(Mathooko and Ogutu 2015). There is a strong bargaining power here since Woolworths’
customers are mostly individual buyers, therefore these strong customers compel businesses
to decrease their price and even create price wars among some of them: Woolworths and
Coles. With various groceries and food lines industry available this has increased consumer
choice, where they can compare prices whether online or physically, and come up with the
best alternative.
Threat of new entrants
The groceries and food lines industry is a mature one, as mentioned in the case. For this
reason, the threat of new entrants is quite moderate for Woolworths because of various
factors. With potential existing and dominant players in the Australian supermarkets industry
such as Woolworth and Coles, new entrants have to face the risks of losing their investments,
it would be difficult for them to set up a new business and obtain excellences, since a lot of
capital would be needed for operation and to be able to compete among existing competitors
which possess incredible brand image.
Threat of substitutes products and services
In today’s competitive environment, there is a need to focus on all features of the food
environment: whether in terms of offering healthier food or the prices of the food (Pollard et
al. 2014). Nowadays, consumers/buyers have the perception that for supermarkets to succeed;
they should offer ‘value-for-money’ (Nenycz and Romaniuk 2012).
The threat of substitute is of high intensity in this industry and it keeps growing rapidly.
Woolworths Supermarkets are faced with high competition because of direct and indirect

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competitors. There are lot of substitutes’ products being offered through convenience stores,
such as 7-eleven and with Coles, its main competitor offering quite the same price strategy
and same primary products. Moreover, Woolworth is facing the Farmers’ markets which are
offering organic products because of this increasing trend towards healthy living.
Strategic Group Map
Figure 1: Strategic Group Map of the Industry
The Strategic group map above is used to analyse the various competitors of Woolworths
based on price category and the brand image of these. The analysis and comparison is further
explained below.
Competitors Analysis
Brand Opening and Number What it is about Key Competitive

of stores across (“Who we are”) Advantages (How they do

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Australia business)
- First store: 1924. - Woolworths positioned itself - Major Strategies: delivering
- First big supermarket: as “Fresh Food Slogan”: low-priced products.
1960. Working with Australian - Woolworths was established
- 961 supermarkets. growers and farmers to with its mass-merchandising
guarantee customers are given strategies; founded as a small,
the high-quality products. with only one location to its
enormous growth as a
Woolworths
worldwide retailer (Spillan and
(Woolworths Limited 2016) Ling 2015).
- Strong Innovations and
related diversification: offers
a House of brands including
non-food outlets (Richards et
al. 2012).
- First store: 1914. - Coles provides fresh food, - Focus on lowering the cost
- First freestanding provisions, general of Australian families.
supermarket: 1960. merchandise, alcohol, fuel - They ensure that their
Main - More than 770 and financial facilities – customers shop with trust,
competitor: supermarkets. through its full service quality, and value.
Coles - Over 20% market supermarket retailer, online - Offers lots of services:
(Coles 2016) share of all retail sales in supermarket, convenience “Coles Online”, “Coles
Australia (Chaudhri and store operator, and financial Liquor”, “Coles Express” and
Samson 2000). services. “Coles Financial Service”.
- 2001. - It is an Australian made; - Strong responsibility

- 15 stores. work closely with farmers, toward local communities:
Direct Aldi producers and manufacturers. Health and Nutrition,
Competitors (Aldi 2016) Children and Youth,
Disadvantaged people.
- deliver high quality
products to Australian
families at low prices.
- An American retailer. - Costco is known for
Costco - The storerooms are intended carrying high quality national
(Costco - 2009. to help SMEs, lessen costs in and regional brands, at prices
2016, - 7 warehouses. purchasing for resale, for constantly under traditional
Wesfarmers everyday business and for wholesale.
2016) personal needs.
7 – Eleven - 1977. - Private-owned company. - Petrol stations.
Indirect (7 – Eleven - More than 615 stores. - Franchises: offers a wide
Competitors 2016) range of products.
NightOwl - 1975 - Largest standalone - It is about offering “more
Convenience - over 70 stores convenience brand; operating choice, more value” through
(NightOwl through 4 formats: High their groceries and fresh
2016) Street (City Centres), food, providing a strong
Suburban (Shops complex), offering for not only
Coastal (lifestyle and holiday franchisees but also
destinations) and Regional customers and business

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(grocery lines). partners.

- Flexibility to adapt to local
stores.
Table 1: Competitor Analysis for Woolworths
This competitor analysis has been conducted to have a better understanding of the Australian
groceries and food lines industry’s competitive structure in terms of the strategies being used
and what differentiate them from each other. This Australian industry has for many years
been a competition for Woolworths and Coles; with the two facing aggressive price wars.
The main competitor that poses the biggest threats to Woolworths is the Coles Supermarket
since it is offering the same primary products. However, there is also an alarm for Woolworth
since big discounters such as Aldi and the American-retailer Costco, a new potential
competitor: these two are not so far away to take the market as well, with their sales which
keep increasing (The Observer 2014). Besides, Woolworths Supermarket is being faced with
indirect competitors: 7 – Eleven and NightOwl who are familiar convenience stores operating
mostly everywhere across Australia, therefore are unavoidable as they do impact heavily as
well by offering the alike or related products as part of their wide-ranging service offerings.
These indirect competitors can sooner or later become direct competitors too because of their
continuous expansion across Australia.
Internal Analysis
Analysis of resources capabilities- VRIO framework of Woolworths
The VRIO framework is a key element in determining businesses’ sustainable competitive
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advantages; where analysing internal strengths and competences is necessary. Sustainable

Competitive advantages has to be Valued, Rare, not easily imitable and businesses have to be
organized in a way to seize the maximum worth of their resources (Jurevicius 2013).
Table 2: VRIO Framework of Woolworths
Being considered as Australia’s most valued retailer, Woolworths remains the most trusted
brand in the country. However, Coles is closely following thus, Woolworths should capitalize
on its resources and capabilities to avoid competitors catching up.
Competition within the retail sector is rising due to inflation, therefore leading retailers to
fight for share whilst offering the lowest prices. This impacts their margins thus profitability,
making it harder for industry leaders to keep their statute/position (Herbison 2015).
Customers nowadays are increasingly willing to support local producers. By purchasing

Australian farmers’ products, they support SMEs’ growth and developments thus contribute
in improving the country’s economy, lifestyle and wealth (Clemons 2015). Australian
retailers have noticed this increasing infatuation towards ‘buying local’; starting to source
some of their products through local farmers. Competitors such as Coles or Aldi have
undertaken a contract with SPC Ardmona that processes fruit and vegetables and Simplot, the
main manufacturer of frozen vegetables in the country (The Australian 2016), to provide
home grown frozen vegetables and canned fruits under their owned-label (Clemons 2015).
This characteristic is good in improving customers’ value but still, Woolworths not being the
only one undertaking this local sourcing strategy, causes competitive parity between the
largest Australian retailers to occur here.
The online grocery shopping trends is rising globally. Even if Australian retailers are lacking
behind global ones within this field, Woolworths has to continue seizing this opportunity to
avoid losing its market share (IBIS World 2016).
In a study comparing both Australian retailers Coles and Woolworths, Woolworths won the
‘online presence’ battle by providing superior online shopping experience through its
numerous apps and features (Finder 2016). However, incessant technological advancements
require both retailers to continuously improve their online offerings. Coles, by investing
within this field could easily catch up and compete directly with Woolworths. This is why, at
this stage, this characteristic gives Woolworths a temporary competitive advantage.
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With a brand value of more than $8 million, Woolworths is Australia’s highest valued brands
(Pash 2016). Being highly committed to ethical concerns and sustainable sourcing has
enabled Woolworths to gain maximum customer value and loyalty. The company is strongly
dedicated to the well-being of its stakeholders making it an esteemed and trustworthy retailer
for consumers (Woolworths Limited 2016). Similarly, Woolworths ‘familial’ culture has
participated to the process of reaching this privileged position. Woolworths’ culture and
values being specific and unique; enabling the firm to experience a competitive advantage
towards its customers’ value and loyalty as it cannot be duplicated or imitated by other
retailers such as Coles.
Value Chain Analysis of Woolworths
As seen previously, Woolworths, and Coles, are undergoing a low cost strategy. Those 2 firms
form a ‘duopoly’, due to their strong domination of the grocery market (Boopathi and Sujen
2012). Analysing Woolworths’ value chain will help to identify the boundaries that exist
between its stakeholders and will facilitate the understanding of what end users expect as added
value (Bonney and all 2007). In fact, value chain analysis is critical to identify the core and
supportive activities of businesses enabling them to perform their operations effectively. Core
activities refer primarily to inbound and outbound logistics, processes, transactions and
customer services (Butler 2016).
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Figure 2: Value Chain Analysis of Woolworths
Woolworths, in order to promote the expansion and advancement of local businesses, has
chosen a ‘local sourcing plan’. This means that the company’s aim is to support Australian
manufacturers through sourcing and purchasing. By doing that, Woolworths sustainably
participates to the development of the country. More than 90% of the fresh meat, fruits and
vegetables that are sold at Woolworths are grown in Australia. The company also has an
international supply chain through which it sources selected goods from diverse countries
(Woolworths Limited 2016).
The inputs, once sourced, are transformed by Woolworths to then be retailed under the
company’s brand in its numerous stores.
In-Bound logistics are very important for companies as it is the main point where both
purchasing and distributing interest congregate. By taking control over its in-bound logistic,
Woolworths has benefited of a greater knowledge on service flexibility and freights. It has
enabled the firm to save costs on delivery, plan more efficiently for the needed resources,
decrease the number of staff involved in the delivery and reduce the lead time (Smith 1997).
Goods coming straight from local producers are sent to distribution centres (DC) in different
areas for quality checkups before being dispersed to the stores across Australia and New
Zealand. Woolworths follows an ‘ethical sourcing policy’ through which it fights against
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suppliers using child labour and/or forced labour (Woolworths Limited 2016).
All these processes are facilitated by numerous supportive activities undertaken by Woolworths
itself. In fact, to perform well, highly experienced employees, advanced technological
arrangements and even supporting supply chain structures are required throughout the process
of delivering products to final consumers.
Employees at Woolworths are considered as the main assets. Also, a particular culture and
policy have been established by the organization to better assist consumers. For instance,
enhancing employees’ competence through trainings and employing individuals of distinctive
cultures is a commitment that Woolworths has agreed to (Woolworths Limited 2016). All this
is helping the company to achieve its goals and objectives within the supermarket industry.
Moreover, Woolworths’ facilities are recognized as being high standard due to the wide
coverage of the Australian and New Zealander territories and to the size of its stores enabling
the firm to serve customers accordingly (Woolworths Limited 2016).
Woolworths is recognized as being the first retailer in general leadership whilst responding
creatively to buyers’ requirements (Strategic Management Analysis of Woolworth 2013).
Suppliers, manufacturers and employees are at the heart of the company and, Woolworths has
always worked hard to maintain long-term relationship with them. The firm employs more
qualified staff and offers supplementary services in its stores such as deliveries for heavy
merchandises for instance. All of this result in the added value to consumers thus
differentiating Woolworths from other retailers (Strategic Management Analysis of Woolworth
2013). Also, the company has been able to ameliorate its operational performance by managing
inventory more efficiently thus decreasing carrying costs (Canadean Company report 2014).
According to the marketing and sales, to attract more customers whilst staying in line with
their ever-changing needs/wants, Woolworths is constantly introducing innovative features in
its stores such as Sushi bars inter-alia. Moreover, the company introduced campaigns: the
‘everyday-low-value-pricing’ to better counter competition and ‘Always at Woolworths’
created to communicate the new pricing policy where the company states that similar low
prices will be proposed to clients across all the stores; specials and promotions will also
remain. The purpose here is to accentuate daily value offered at Woolworths rather than one-
off reductions (Mitchell 2015).
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To reach its targeted objectives, Woolworths’ value chain also involves other activities such
as outbound logistics through which the goods are dispersed among the numerous stores,
supportive services for customers to acknowledge the added value offered by Woolworths
and help them finding their goods; IT infrastructure and supportive supply chain structure are
also crucial in the process of delivering products as there are the main elements that cannot be
duplicated by other retailers as it depends on their resources/capabilities.
BCG Matrix of Woolworths

Figure-3 below depicts the product portfolio of Woolworth with regards to its market share
and potential growth when compared to its most direct competitors, Coles and Aldi. The
BCG matrix above clearly shows that Household commodities represent an important
segment for the company (King 2016); with high market share and low market growth these
commodities represent a cash cow for the company (Teryima and Angahar 2014). While
these commodity items represent the largest revenue for the company, it is noted that
Woolworth is slowly losing market share in this SBU when compared to Aldi (Richards et al.
2012). This decreasing market share tendency is detected across all the SBUs of Woolworth
(king 2016) despite its very good overall performance and dominance in the industry.
Regardless of the large competition between Coles and Woolworth, regarding their private
label merchandises (Nenycz-thiel 2011), Woolworth’s private-labels can be categorised as
Stars, with high market share and high growth (Dung 2012). However, the intense
competition in this segment shows a maturity of the industry (Nenycz-Thiel and Romaniuk
2012) and leads to conclude that this SBU will soon be saturated, with few potentials for
further growth. The costlier ‘profitable’ product line of Woolworth is also categorised as a
Star due to its high market share and high market growth (Dung 2012). Here, again direct
competition from Coles and Aldi leave little opportunity for further growth and expansion of
the SBU (king 2016).
The ‘loss-leaders’ fall into the dog category. While the company’s market share in this SBU
has been slowly increasing (King 2016), it is still too low when compared to the market share
of competitors and hence cannot be categorised as a cash-cow. Furthermore, these low
revenue products display little to no potential of further growth and may even cause some
loss to Woolworth. Lastly, due to its high market growth but very low market share, the
private label organic product-line is depicted as a question mark (Teryima and Angahar 2014)
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generating the least amount of revenue for the company. While the demand for these products
is increasing nowadays (Nenycz-Thiel and Romaniuk 2012), the company fails to fully
benefit from this market due to the high competition in this segment (king 2016). As a result,
its market share is low when compared to Aldi and Coles. However, there are still
opportunities for further growth and increases in revenue-generation as the market is
expanding and the demand for these types of products have been proven to increase in the last
few years (Chung 2016).
Figure 3: BCG-Matrix for Woolworth
Analysing this BCG matrix shows that the excess cash generated from the ‘commodity’ cash-
cow should be used in the development of starts products such as ‘private-label’ merchandise
and ‘profitable’ product lines. This will allow these respective SBU products to increase the
revenue they generate for the company. Furthermore, investment should be made on the one
question mark product currently present in Woolworth’s portfolio. This will allow it to
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migrate towards the star segment and simultaneously be more competitive and profitable to
the company. Theory suggests that a company should exit itself from any SBU where its
presence is categorised as a dog (Grant et al. 2014). However, in Woolworth’s case this
would not be advised as the ‘loss-leaders’ are important basic commodities that generate
traffic into stores for the brand (Grant et al. 2014). Hence, Woolworth should instead look
into development strategies which will enable the ‘loss-leaders’ to become cash cows.
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Strategy Evaluation- TOWS Matrix
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Recommendations
Business Level Strategies
1. To focus on the human side and human contact between customers and employees by
increasing the training of the latter with regards to customer relationship management
and customer service.
While companies across all industries are focusing on technological development and tactile,
indirect ways of interacting with customer (Koo et al. 2007), Woolworths should focalise on
an important asset it has which is its human resources (Woolworths Limited 2016). By
increasing their ability to interact well with customers and capitalising on the human contact
that they can create Woolworths will be able to differentiate itself and gain a competitive
advantage on its most direct competitor, Coles. Right now, the saturated market, high price
wars and increasing number of competitors (Hattersley, Bronwyn and Burch 2013) impose on
Woolworths to find new ways of differentiate itself and not rely only on its ‘low-price’
strategy in order to remain competitive. This recommendation will enable Woolworths to
reach out to significant and different segments of the market while take advantage of a
resource it already has- good HR. Moreover, it will undoubtedly have a positive impact on
the image of the brand as well as its overall performance in terms of foot traffic, market share
and consequent profit margins. Hence, at the business level, differentiating by offering
excellent and innovative customer service and human contact is a way for Woolworths to
maximise the number of new loyal customers.
2. Place specific QR codes on products so as to obtain various information.
Woolworths could place QR codes on its products firstly to allow customers to compare
prices between them and their various competitors; this would allow the brand to display
where they are the most competitive and bring a unique competitive advantage to the
supermarket. Also, it would encourage further foot traffic and help the brand show that it is
developing new services to facilitate shopping experience of customers. Secondly, it would
allow consumers to obtain rapid, easy-to-read and up-to-date information about nutritional
value of products and any other relevant information such as presence of allergens or
ingredient list. This would ease up the comparison of products and help customers choose the
best one adapted to their needs. Moreover, the information scanned could be stored on the
mobile application of the company of each specific user, for later use or reference. This may
additionally increase downloads and diversify the use of the mobile app. This
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recommendation could allow the brand to further differentiate itself based on a tangible
dimension (Swink and Hegarty 1998). Furthermore, this would be an important driver of
uniqueness (Garg 2013) for Woolworths, on the business level, as it would allow it to provide
a complementary service which is not available from its competitors.
3. To place a child-care centre within the supermarkets themselves so as to facilitate

shopping experience.
According to Woolworths Limited (2016), Woolworth’s Earn and Learn campaign was
highly beneficial to child care, pre-schools and kindergartens through the partnership it
created, which help to build further customers’ trust. Bringing this trust and knowledge,
whilst using their highly experienced and trusted staff members (Woolworths Limited 2016),
Woolworths is recommended to implement a child-care centre within the supermarkets
themselves. This service would be available to all customers of Woolworths at the
supermarkets’ operating hours and would be highly secure so as to meet the potential
requirements of demanding parents. This would be highly beneficial for the brand; it would
encourage customers to choose Woolworths over its direct competitors for grocery shopping
due to the extensive level of differentiation that this complementary service provides.
Moreover, it would be aligned with the business level strategies of the brand which position
itself as the ‘Fresh Food People’ supermarket. This would also consequently ameliorate and
ease customers’ shopping experience by offering them a unique and quite important motive
to choose Woolworths for their weekly or daily shopping routine.
4. To create an ‘ugly fruit and vegetables campaign’.
Fruits and vegetables are becoming more and more expensive so are less reachable for the
less well-off customers. In Australia, more than 40% of fresh fruits and vegetables are thrown
out due to their esthetical imperfections (ABC Premium News 2014). By implementing this
campaign, Woolworths will be able to sell the fruits and vegetables that are usually sent to
the bin for their informal shapes or sizes. Those products can be offered at lower price due to
their ‘downgraded quality’ whilst being consumable thus targeting lower-end customers. This
campaign will also welcome produces since the quasi-totality of production will be sold, thus
reducing waste and increase their revenues.
This process has already been implemented by the supermarket chain ‘Intermarché’ in France
and has been a real success (Xinhua News Agency 2015). Woolworths could also benefit
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from the same idea by promoting the usually ‘discriminated’ fruits and vegetables. This
alternative will overall reduce Woolworths’ waste amount and facilitate the access to such
products for low-end consumers (ABC Premium News 2014).
5. To offer their store innovations products (fresh sushi bars, fish bay& bake etc.) to
several organisations’ canteens so as to diversify further and exploit this service
completely.
This recommendation will be a good way for Woolworths to further improve its convenience
effort. In fact, by obtaining contracts from companies to serve their employees’ on a daily
basis, the company could reach further customers whilst reducing delivery time. People
nowadays have increasing responsibilities thus less time allocated for lunch. Similarly, they
are more and more looking for rapid and healthy alternatives that fast food cannot provide.
Australian consumers are spending increasing amount per week on meals purchased away
from home. They are also willing to buy healthier alternatives to fast foods (Ting 2013).
Woolworths, by managing some corporate canteens will be able to respond to this need by
proposing freshly baked/healthy meals every day. Woolworths will need no further
investment, as the companies’ canteens are already operational. The retailer will only have to
provide some staff to receive the merchandises, prepare the meals and manage the canteen. It
will result in better employees’ time management and in a guarantee for Woolworths that
each day, people will come to consume these fresh products. With Woolworths qualitative
products, employees will enjoy the freshly made meals, thus will certainly react positively to
this alternative.
6. To make the special services (fresh sushi bars, fish bay& bake etc.) available 24/7 so
as to minimise waste and provide a healthy alternative to fast foods.
As mentioned earlier, Woolworths is diversifying its activities in-store through innovative

and attractive arrangements such as sushi bars inter-alia. This is helping the retailer’s to
differentiate itself from competitors. On this path to differentiation, Woolworths could go
further by opening a drive thru 24/7 services where these ready-made products will be
available for sale. This will first help Woolworths in reducing waste but also gain new
customers as being open all day/night long will increase its convenience. Customers will
therefore benefit from the fundamental in rapid service through the comfort of their transports
(Hamaker 2009).
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Being the only retailer providing fast-service ‘restaurant’, customers who usually prefer to
shop from competitors will now automatically come to Woolworths at night for instance due
to this new and convenient service. Also, as stated before, the cost involved in such operation
will be covered by the decreasing daily amount of waste Woolworths is experiencing.
7. To invest more in Data Analytics.
It has been analysed that there is a growing population; therefore Woolworths should invest
more in ‘data analytics’ to seize this opportunity. Woolworth is the largest online retailer in
Australia which serves around 18 million people per week. With the use of data analytics,
more constructive information will be gained since Woolworths’ ability to analyse and
interpret data will be more efficient to meet future buying trends as they would be able to
better identify customers’ patterns on a greater scale. This strategy will also support internal
audits by improving the efficiency and effectiveness of the audit process: in terms of cost,
productivity and innovation (Faidaro et al. 2015). This strategy would mostly be used to
translate data to actionable information (Wills 2014) as by understanding the customers’
entire journey, they will be able to better target their audience, thus achieving a certain
maximum efficiency. Given that, Woolworths would be able to track customers’ purchasing
habits, Woolworths could target them through advertising, pop ups, emails depending on
their online buying patterns: so that these customers would be driven more statistically
towards Woolworths’ products, and are more aware of any sales promotions that are being
imposed on certain products.
Corporate Level Strategies
1. To distribute the daily perishable goods to association for the homeless people.
In Australia, Woolworths is already the most trusted retailer. This is mainly due to its
qualitative and fresh products offerings. However, usually, supermarkets throw out their
perishable goods such as unsold bread or nearly rotten fresh products. The amount of food
wastage remains a worldwide issue impacting on economies, communities and ecosystem. In
Australia, every year $8+ billions of comestible food are thrown away (Australian
Government 2016).
To counter this flail, unsold products could be distributed to NGOs for homeless people, such
as Care Australia for instance, where Woolworths will reduce wastage, and will also
participate in increasing its neighbourhood wealth and lifestyle. The company will on the
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long term gain an improved/stronger reputation thus benefiting from higher customer loyalty
and value. This may help Woolworths’s to overwhelm Coles with this better image and
through the improvement in the actual society’s conditions. Woolworths here will work
towards its waste reduction targets whilst NGOs such as ‘Care for Australia’ will be able to
lessen poverty whilst increasing food safety (Australian Government 2016).
2. To collaborate with the popular game “Pokemon Go” so as to increase traffic in the
supermarket.
It has been analysed that the technology is changing and evolving and that the online retailing
is expanding, therefore Woolworths could take these opportunities to minimise their
weaknesses such as the strong bargaining power of customers. It is important to look in
customers’ eyes and follow their trend. This collaboration will provide new and better
solutions (Wang and Archer 2004), thus contributing to brand awareness and reputation. With
increasing competition, it is extremely important that Woolworth make use of the
advancement in technologies to show innovation and creativity that consumers are looking
for. This gaming application will permit Woolworths to sustain its competitive advantage by:
improving productivity and ability to create a strong tie with these potential customers by
meeting customers’ trends. A certain level of engagement would also be created since
Woolworths could gain from potential customers who will be encouraged to go to
Woolworths especially to catch their ‘pokemon’; the benefits of this investment would be that
Woolworth could at the same time use this as a strategy by making advertisements on the
application itself, encouraging these players to make some purchases.
3. To develop special advertising campaigns specially designed for the ‘loss-leaders’

there by promoting ethical consumption as well as animal protection and moral
treatment.
It is now becoming an integral part as well as a challenge in this world for companies to be
“globally green”. Being green is the new beliefs, values and norms that customers perceive as
the best way to manage the environment properly. To react to this green consciousness, it is
important to develop these advertising campaigns to show that they have a role in ensuring
that consumers’ lives are taken into consideration (Zaharia and Zaharia 2014). To continue
prospering, it’s high time to bringing green innovation which will provide win-win solution
as it generates great business opportunities and customers’ needs are met. Woolworth will be
able enhance the products’ qualities and could attain the goal of sustainable development,
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since this green advance will raise resource productivity efficiently and lessen pollution
effectively. This would reduce the consumption of materials, where they can use existing
knowledge to lead to innovation by creating environmental products with less impact of
animal resources. Through these special campaigns, it will create barriers to competitors and
gain sustainable benefits (Chang 2015). This will be both an ethical and financial concern
since something meaningful will be constructed to customers (Hendry and Vesilind 2005).
4. To expand further abroad so as to increase the reach of the company.
Woolworth has the financial and structural stability and possesses strong resources which
include good presence when it comes to customers. According to Ahmeti (2015), we are in a
competitive global market place, this is why Woolworths should expand further abroad to
gain from further competitive advantage. The term “going global” can be applied here: where
it is recommended that Woolworths’ supermarket expand their business further by entering
more international markets. This expansion will help them to create a strong presence since
greater awareness will be created. It is crucial that Woolworth invest time and energy into
researching potential foreign markets since they would further understand the customers’
culture, and social norms (Chailan and Ille 2015). The benefits gained through this overseas
expansion will increase the exposure to Woolworth where it will gain from a larger global
footprint. Moreover, great brand recognition throughout the world would be created; hence
Woolworths may be viewed as a bigger player in the industry where they can react to
competitors’ move, fear less their competitors already in the market such as Coles and Aldi or
even the others entering the market such as 7-Eleven. This expansion would also be an ample
opportunity for Woolworth to increase their market share, develop synergies, and boost their
own capabilities.
5. To increase strategic alliances with ecological companies to improve Woolworth’s

image.
There is a growing opportunity in the health food sector and creating an alliance with
Australian renewable energy provider, Energy Australia might help Woolworths to better
respond to consumer demands and improve its image over that of its competitors. They can
give discount tickets at the end of the month based on purchases of a certain amount of
environmentally friendly bio products and goods bought in their supermarkets. If the
customers are not using energy Australia electricity yet, then they will have the incentive to
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appropriate themselves with this renewable energy system. Society is more and more
concerned about its environmental footprint (Pakulski et al 1998) and in the meantime people
also want to decrease their electricity bill at the end of the month.
Woolworths can create an association with a well-known green energy partner, to gain further
competitive advantage, improve their image over their competitors, gain market share and
increase their sales.
6. To acquire land near their supermarket to reduce the cost of their fresh plant based
foods.
Woolworths are financially strong. They can afford to acquire land closer to their
supermarkets at which point local farmers can be contracted to operate on the plots and sell
their organic produce including those known as “ugly vegetables” reducing the number of
waste. This new process will also reduce the transportation costs, improve the quality by not
damaging them during carrying and ensure that the farmer is actually working according the
norms that were agreed upon. As it is well known, Australia is vast; reducing the distance of
carrying the fresh food goods could drastically reduce the cost as the use of refrigerated
trucks is expensive (Waye 2008). Customers will appreciate this initiative by paying less for
higher quality fresh foods, thus attracting more customers to Woolworths’ supermarkets.
Woolworths will have a competitive advantage by using this new system and will attract
more customers that are concerned about their health and also the ones who are interested in
the high value for money products Woolworths would be offering.
7. For the countryside and rural areas, to give the opportunity to customers to pick and
choose their fresh fruits and vegetables directly from the soil.
The access to fresh food in rural areas can be improved and innovated upon; customers would
be able to choose their fresh food directly from the soil. There is also an educational
dimension to this in that people could see the processes and conditions needed to grow their
organic produce. Children who are going to be the next generation of consumers would also
be sensitized about the good practises in agriculture, creating good memories and attachment
to Woolworths. From these practices, Woolworths will furthermore attract and gain new
customers.
Picking fruits and vegetables directly from the soil will demonstrate that this supermarket is
showing interests and is actively committed to sustainable agriculture and permits its clients
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to reconnect with the nature which will give a good image to their supermarkets. Woolworths
will also gain a competitive advantage, as they would be the first big Australian supermarket
to do that.
8. To provide a free car wash service after a specific amount has been spent by
customers in the Woolworths stores.
The car wash industry has evolved and can now use rainwater in order to be more sustainable
(Dobrowksy et al 2014). Customers who want their car to be cleaned for free will have to
buy a certain amount of products, and people who want their car to be cleaned even if they
don’t spend enough in the supermarket can access it easily for a fee payable directly to the
car wash operators. This service may stimulate Woolworths’ customers to buy more from
their supermarkets as people will want to reach the ceiling setup by Woolworth to get extra
value for the money they spent with a car wash. This initiative will attract potential customers
and their current customers to spend more for the benefits of this extra service. It is also
extremely convenient that everything can be done at the same place and this would be
perceived as an economy of time and money. By attracting more customers in their
supermarkets, Woolworths’ sales will increase, thus gaining market share.
Conclusion
Throughout this report, numerous recommendations have been proposed to Woolworths in its
fight towards competitors. Within the highly competitive supermarket industry, the different
players have to constantly remain proactive and innovative to differentiate and gain
competitive advantage. The suggested recommendations that came out of the TOWS
analysis will help Woolworths reach its target by improving its activities and operations. In
fact, the company should offer additional and feasible services to customers leading on the
long run to further economies of scale, customer loyalty and value. Being the most trusted
retailer in Australia is an actual advantage that Woolworths possesses. However, to keep this
privileged statute, investment and devotion are required leading to an increasing market share
and better financial performance. By adopting the recommended alternatives, Woolworths
will strengthen its brand image thus customer value and enlarge the small gap it currently has
with competitors.
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Strategic Management (Curtin University of Technology)

StuDocu is not sponsored or endorsed by any college or university

Day/Time of Tutorial Monday/ 8:30 am

Date Submitted 28/10/2016

Word Count 7122

Downloaded by Fahad Sandhu (fahadsandhu7543@gmail.com)

Analysing the Industry based on Porter’s 5 forces.................................................................6

Strategic Group Map..............................................................................................................8

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Analysis of resources capabilities- VRIO framework of Woolworths.................................11

Value Chain Analysis of Woolworths..................................................................................12

BCG Matrix of Woolworths.................................................................................................15

Strategy Evaluation- TOWS Matrix....................................................................................18

Business Level Strategies.....................................................................................................20

Corporate Level Strategies...................................................................................................23

List of Figures and Table

Table 1: Competitor Analysis for Woolworths........................................................................10

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Downloaded by Fahad Sandhu (fahadsandhu7543@gmail.com)

There is strong indication of socio-economic differences in nutritional consumptions amongst

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technology: Google application platform, which intends to support Woolworths’ workforce to

Analysing the Industry based on Porter’s 5 forces

Rivalry among existing competitors

Bargaining power of suppliers

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Bargaining power of buyers

Threat of new entrants

Threat of substitutes products and services

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Strategic Group Map

Figure 1: Strategic Group Map of the Industry

Brand Opening and Number What it is about Key Competitive

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- 2001. - It is an Australian made; - Strong responsibility

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(grocery lines). partners.

The VRIO framework is a key element in determining businesses’ sustainable competitive

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advantages; where analysing internal strengths and competences is necessary. Sustainable

Table 2: VRIO Framework of Woolworths

Customers nowadays are increasingly willing to support local producers. By purchasing

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Value Chain Analysis of Woolworths

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Figure 2: Value Chain Analysis of Woolworths

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BCG Matrix of Woolworths

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Figure 3: BCG-Matrix for Woolworth

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Strategy Evaluation- TOWS Matrix

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2. Place specific QR codes on products so as to obtain various information.

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3. To place a child-care centre within the supermarkets themselves so as to facilitate

4. To create an ‘ugly fruit and vegetables campaign’.

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