.

Economics Assessment answers

Introduction (Background of the industry and company)

The retail industry in Australia comprises of about 140,000 retail companies and businesses. The Australian supermarket retail industry is one of the most concentrated and strong industries in the world (Wardle and Baranovic, 2009). The largest players of the Australian supermarket retail sector are Woolworths and Coles, which are owned by Woolworths Ltd. and Wesfarmers Group respectively. Though these giant supermarket stores offer good quality products.

Woolworths began operations in the year 1924 with a small basement store in Sydney, Australia. Since its inception, Woolworths has grown into a supermarket giant. It has become the first choice of almost every household in the metropolitan as well as the regional areas of New Zealand and Australia. Woolworths began as a fresh food supplier 60 years ago by 2012 the brand has widened to offer a huge range of grocery and food products. Woolworths is extremely sensitive to the customers’ needs and is constantly providing newer and better product offers to its customers. Each brand under Woolworths Ltd. is unique and highly committed to provide the best quality of products to its customers (Rotembuurg,,1993).

economics sample Assignment Help

Though Woolworths Ltd. is primarily a retailer it has penetrated deep into supermarket sector f the Australian retail industry along with the general merchandise stores, hotels and petrol and gas stations. The retail product portfolio of the company includes liquor, grocery, fresh food products, general merchandise, electronics and fuel. Woolworths Ltd. currently includes 2,330 divisions, 577 general merchandise stores and 284 hotels. The company primary areas of operations include New Zealand and Australia, with subsidiaries in India, Hong Kong and China (GlobalData, 2012).

The following data gives a brief glimpse of the history of Woolworths Ltd.-:

  • 1924- The company established its first store in Sydney, Australia.
  • 1930-1940- The company witnessed rapid growth and expanded its operations through various stores.
  • 1970- 1980-: The brand established itself as the largest retailer of fresh food products in the world.
  • 1980-1990 -: The brand became the market leader in the retailing sector of Australia.
  • 1990-Present-: The brand entered into several other sectors with petrol gas stations and hotels.

Stakeholders Of Woolworths

With a huge organization like Woolworths there are bound to be many stakeholders as it holds a social responsibility. The stakeholders of Woolworths Ltd include-:

1. Customers-: The customers are the most important and valued stake holders for the organization. Woolworth Ltd. is highly committed towards its customers and tries to understand their sentiments which impact their shopping behavior through continuous qualitative research. The Customer Care Center receives feedback and complaints from the customers 24*7. All the new products are tested in highly customer friendly environment and workshops, so as to attain high customer satisfaction.

2. Investors-: The investors make Woolworths what it is today. With their trust and confidence the brand has reached and attained new heights. Woolworths Ltd. holds quarterly briefings and meetings with its investors along with an Annual General Meeting with all its shareholders in order to give them a clear view of where there money is going. In addition, an investor call centre service operates specifically to the queries of all its investors. An investor centre on the main website also enables the investors to email their queries directly to the CEO of the company (Rotembuurg,,1993).

3. Employees-: Employees at Woolworths Ltd. are the most prized people and are treated with utmost care and attention. The employees and their hard work is what have made Woolworths the giant it is now. The company is highly focused on building, developing and diversifying the capabilities of its employees to meet current and future challenges and opportunities (Rotembuurg,,1993). The company conducts many training programs for its employees including the networking, mentoring, targeted leadership programs and other such development activities.

4. Suppliers-: Another highly important category of stakeholders of Woolworths Ltd. is the suppliers. Building strong and long-term relationship with its supplier has always been the organizations’ priority. The company holds annual trade performance measurement meeting and awards and recognizes innovations by its partners. The company celebrates partnerships with its esteemed suppliers by awarding them the Supplier of the Year award

The few other stakeholders of Woolworth Ltd. include the Communities, The Government an Regulatory Bodies and the Non-Profit Organizations (NGO’s).

Vision Statement

The clear understanding of the vision and mission of the organization is one of the key factors behind developing a strategic plan. The vision statement of the organization outlines where the organization sees itself a few years down the line and the organizations wants to be in the environment in which it works. The vision statement is a long-term view of the company’s goals and it focuses on the future. The vision statement is generally motivating and inspirational. The mission statement on the other hand outlines the fundamental principles of the organization. It describes in detail about the organization and what it does to attain its goals and vision (GlobalData,2011).

In essence, Woolworths’ vision is to maintain and enhance its retail business, offering customers better quality, greater convenience, better ‘value for money’ products, wider range, lower prices and high-end services.

How to Gain Support For The Vision Statement

With the high competition and concentration in the Australian supermarket retail sector, Woolworths Ltd. is trying hard to gain support to achieve its vision statement. For defending its leadership in the market, it is highly essential for the company to achieve its vision statement. The following factors include how Woolworths Ltd can achieve support for its vision statement-:

Understanding the needs of a changing business-: It is important understand the needs of the changing business and catering to its needs properly. This will help Woolworths is maintaining and enhancing its retail business. The Australian retail sector never stands still and is very dynamic and changes according to the customer’s choices and needs (Rotembuurg,1993).

Woolworths is responding to the dynamics of the retailing business by laying down the foundation of a new phase of development in which the customer is at the heart of all the business. Listening to the customers’ needs and trying to invent better and more innovative ways to cater to them would help Woolworths gain support for accomplishing its vision.

1. The Future Challenges of Shopping-: With the ability to shop anytime, anywhere and anyhow in the hands of the customers, their expectations from Woolworths are increasing. Woolworths has understood that in order to achieve its vision statement it needs to keep up with changing technology and meet its customer’s expectations to move effortlessly and seamlessly between the virtual and physical shopping mediums (GlobalData,2011).

Each and every Woolworths’ business and store offers the customers multiple shopping options like shopping through website, virtual stores or mobile applications. Newer, faster and more efficient delivery options also help to enhance and defend its market leadership position in the retail sector(GlobalData, 2011).

PESTLE Analysis

PESTLE Analysis or the PEST analysis is refers to the various macro-environmental factor that are needed to be considered whole developing and strategic plan for an organization. The PESTLE analysis includes the analysis of the Political, Economic, Social, Technological, Legal and Environmental factors. PESTLE Analysis is a very useful and effective tool for understanding the market decline or growth, business potential, direction for operations and position (Foo,2008).

PESTLE Analysis of Woolworths-:

Political Factors

Woolworth is in advantageous portion due to the Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA). The agreement combines the two countries, where Woolworths work as a single community to cater to needs of its customers. Both its domestic and foreign shareholders are also secure as the two countries are politically stable.

Economic Factors

The economic factors are also favourable for Woolworths, as both New Zealand and Australia have an economically stable environment. As compared to the other countries, both New Zealanders and Australians maintain a high living standard. The Gross Domestic Product (GDP) of Australia was ranked number ten and that of New Zealand was ranked number thirty-two by the International Monetary Fund (GlobalData, 2012).

Socio-cultural factors

In today’s environment friendly world, the customers give preferences to companies and products that show commitment towards producing products that are organic and come with a green-tag. Woolworths is one of the companies that became trend setter for a greener and healthier lifestyle (Mate,2010). Woolworths has incorporated many environment friendly techniques through its ‘sustainability strategy 2007-15’.

Technological Factors

Woolworths is committed to innovation and continues to develop better technologies which could help in enhancing the efficiency of its services and meet the quality expectations of its customers. It incorporated the self-checkout machines in all its stores. The machines enabled the consumers to weigh, scan and make payment for their products and groceries via cash, debit or credit cards. Woolworths also employed the Service Oriented Architecture (SOA) software which helps in monitoring and identifying the bottlenecks it its operations and services in true time thereby helps in reducing costs (Palmer, 2008).

Legal Factors

The government trading and other policies directly affect the retail industry in Australia. The Australian Competition and Consumer Commission and the Trade Practicing Act and other foreign trading policies highly favour the supermarket retail business in Australia. Thus, the legal and regulatory factors favour the development and enhancement of Woolworths’ business.

Environmental Factors

The environmental factors also greatly affect the sustainability of supermarket retail business. Woolworths’ environment friendly policies and various steps towards producing products that are organic, help in establishing its market leader position. The above stated macro-economic environmental factors highly favour the growth and development of Woolworths in Australia and New Zealand.

Assesment Of The Industry And Product Lifecycle Analysis

It is very important to do a detailed assessment of the factors deriving an industry in which the company operates, for developing a good strategic development plan. The key factors which drive the supermarket retail industry, in which Woolworths operate, are-:

1. Customers-: Customers are the most important driving factor behind the supermarket retail industry. Even though Woolworths is constantly innovating and implementing newer technologies to retain and impress its customers, for customers it is all about convenience and better savings. A customer might be ready to change his supermarket store on the basis of proximity, lower price on particular commodity or better offers (Mate,2010).

2. Suppliers-: The efficiency and timely production of goods by suppliers is also a key driving factor in the supermarket retail industry.

3. Existing Competitors-: Major competitors of Woolworths in Australia include Alde, Coles and IGA. Through its “Everyday Rewards” program, Woolworths tries to build loyalty and long-term relationships with customers. The competitors also offer high benefits to the customers and poses serious threat to Woolworths’ business (Foo,2008).

4. New Entrants-: New entrants and competitive companies pose little or no threat to a giant market leader like Woolworths. Although, a new entrant might offer a better offer on a particular product, it cannot overtake the hold of Woolworths in the Australian market (GlobalData,2011).

5. Substitute Products-: There are many new products in the market that have been launched as substitutes to groceries, but with a strategic plan Woolworths would be able to overcome any threat posed by substitute products.

The Product life cycle analysis (LCA) is a highly efficient tool for identifying required inputs and the desired outputs from a process of product, including the various steps taken while producing, transporting, usage and disposal of the product. It also calculates its overall environmental impacts. The inputs include the supplier’s products and the consumption of energy, water and fuel for those products. Outputs may include the desired customers participation and satisfaction (Foo,2008).

The STrategic Plan And Objectives

Currently, Woolworths vision statement and business growth plan is based on four key components including-:
1. Extend its business into newer sectors like liquor, hotels and petrol/gas stations.
2. Defend its market leader position in the food retailing business.
3. Maximizing the shareholder value by acting on its portfolio.
4. Maintaining the quality of the products and the track record of creating newer businesses.

Swot Analysis

Strength

The most significance attribute of Woolworths is its dedicated and committed team. It is very much evident when one glances over its financial performance which sits high at a 6.5% greater than the forecast growth. It leads the FMCG retail industry with $47b revenue in 2008 and 5.4% EBIT (Marcellus, 2011). Even the financial services have recorded growth in almost every product for Woolworths. Splendid performance and stellar growth has been shown in women attires and grocery (Investment analysis, 2004).

Weakness

The fact that Woolworths’ majority of stores are placed in secondary or tertiary retail centres has proved to be its weakness. Minor district or local centres comprise of about 60% of the units which is a fairly large share. Now because of this location of units in non primary retail centres, Woolworths shell out very less money as rent for the unit. This makes an impression that Woolworths is not a big retailer. The fact is that other retailers end up paying as high as 1.5 times the rent Woolworths pay but they do get better location for their units. Due to this strategy, Home and electrical retail products have taken a hit (Ellis, 2011).

Opportunity

The customer satisfaction assessment of Woolworths of 86.6% has proved to be its biggest success in recent times. This splendid performance has placed Woolworths higher that Colas who got 85.6% customer satisfaction and close to Adli with 88.9%. Meat, fresh fruits and vegetables department are the main reason for this performance (Ready Made Search, 2009).

Threats

Fluctuation in currencies, Harsh trading conditions, loss of market share in cloth sector along with economic slowdown has made market development difficult for Woolworths (Investment analysis, 2004). Due to new competitors, customer loyalty has also suffered.

Contingencies to Overcome Weakness

The weakness identified as per SWOT analysis can be overcome by adoption of following strategies:

1. By increasing promotion offers on products and by offering a good loyalty and rewards program to the customers, the location disadvantage of the stores can be overcome. For better offers, lower prices and beneficial rewards program the customers would overlook the proximity of the store.

2. Differentiating the products offered from its competitive threats another important way of overcoming the threats. By offering unique products to the customers, Woolworths can develop a product-leadership in the market (Mate,2010.

3. Innovation and constantly providing better and faster services is the key to overcome competition and threats in the market. Customers today look for an easier and customized shopping experience and Woolworths strives to offer them the same.

4. A great marketing strategy is the key to develop an edge over the competitor companies. Woolworths marketing strategy to spread fresh food awareness through magazines, newspapers and distributed pamphlets is gaining lot of popularity ( Dufficy, 2011).

Methods Of Communication

Effective communication of its strategic plan is highly important for an organization. The various strategies for communication that are used by Woolworths include-:

Marketing- It is the overall method to promote the brand value of the organization. Public Relations- Communicate to the public the company’s ongoing strategies and sustainability plans in order to build public image.

Advertising- Advertising the products through newspapers, magazines and other media to gain customers attention.

The methods of communication to implement these strategies include-:
1. Issuing press releases about the company’s new achievements.
2. Issuing news releases about the company’s new promotional offers.
3. Creating a brand value of the product through radio and television advertisement.
4. Distributing pamphlets and leaflets to gain public attention.

KPI(Key Performance Indicators)

The Key Performance Indicators to be used for the strategic plan are as follows:

1. Time Spent in the Store:
By using RFID or even manual techniques, it can be found out that how long a customer,on an average, remains within the store. It is an important measure as it can establish a direct correlation between the time spent and stuff bought.

2. Sales per Square Foot:
It can be calculated by dividing total sale over a period of time by the total area of the floor of the retail unit. It gives us the efficiency of a store to sell its merchandise with respect to the size of the store ( Dufficy, 2011).

3. Rate of Conversion:
The number of transactions that took place within a specific period of time when divided by number of customers gives us the conversion rate. It is important as it gives us a measure of loyalty of a customer ( Dufficy, 2011)

Plan Monitoring and Evaluation Criteria

Resource mapping can be used as a technique for plan monitoring and evaluating how well the plan has functioned. Resource mapping is used as it helps in identifying achievements as well as gaps and also emphasize on collection of information. It also assigns responsibility and forecasts the next step to be taken (Gray et al, 2005).

Head Milestone Plan and Conclusion

The strategic plan aims to achieve following milestones in long run: 1. Increased market share in the countries when Woolworths has already established its mark.

2. The strategic plan aims to extend its business interests in US as well after occupying substantial market share in Australia and Newzealand. It also would help in establishing the impression of being a bigger retail chain on an international stage (Gray et al, 2005).

SOURCES OF RESEARCH USED FOR DEVELOPING MARKETING PLAN

Dufficy, T. (2011). An Overview of Woolworths. Retrieved from http://www.slideshare.net/tomdufficy/an-overview-of-woolworths
Foo. (2008). Woolies Boost Supply Chain Technology. Retrieved from http://www.theaustralian.com.au/australian-it/woolies-boosts-supply-chain-technology/story-e6frganf-1111115892003
Frey, & Bruno, S. (2002). Successful Management by Motivation. Springer.
Gray, E., Emerson, L., & Mackey, B. (2005). Meeting Demand of the Workplace. Jstor.
GlobalData. (2011). Market Research. Retrieved from Woolworths Limited (WOW) - Financial and Strategic SWOT Analysis Review: http://www.marketresearch.com/GlobalData-v3648/Woolworths-Limited-WOW-Financial-Strategic-6261980/
Investment analysis. (2004). Retrieved from Woolworths Holdings Limited : http://www.docstoc.com/docs/76183741/PowerPoint-Presentation---Woolworths-Holdings-Limited
Kraft, M., & Mantrala. (2010). Retailing in the 21st Century. Springer.
Matej, I. (2010). Retrieved from Strategic Management Group Assignment 1 - Document Transcript: http://www.slideshare.net/KyleL1/strategic-management-group-assignment-1
Palmer. (2008). Woolworths Trial Self Check-Out Technology. Retrieved from http://www.ausfoodnews.com.au/2008/04/21/woolworths-trial-self-checkout-technology.html

Ready Made Search. (2009). Retrieved from 0955 - Woolworths customer satisfaction continues to rise: http://www.roymorganonlinestore.com/News/Woolworths-customer-satisfaction-continues-to-rise.aspx
Rotembuurg, J., & Saloner, G. (1993). Leadership Style and Incentives.Jstor.
United States Department of Agriculture. (2011). Retrieved from World Agricultural Supply and Demand Estimates: http://www.usda.gov/oce/commodity/wasde/latest.pdf.Woolworths. (2011).

.