Summary and Overview of the company
Discuss about the Stakeholder Analysis of Woolworths.
Woolworths Group is a well reputed retail company in Australia. The segment of the company includes Australian food and petrol, a supermarket chain in New Zealand, BIGW, Hotels and Endeavour Drinks Group. The food and petrol segment of the company is involved in the procurement of petroleum as well food products for reselling to the Australian consumers. While the BIGW segment deals with the procurement of discount in general merchandisers, the hotel segment deals with the provision of a range of leisure and hospitality services to the Australian consumer. The mentioned organization is the second largest retail company in Australia as well as in New Zealand when it comes to yearly revenue (Dos Santos, Svensson and Padin 2013). Moreover, recently the company has expanded its business in the Indian retail market. In spite of the fact that the chief sector of the company is the retail sector, the mentioned company is also the largest retailer of liquor in Australia.
Considering the fact the company operates in several sectors and is a multinational organization, the management of the company suffers from several risks associated with their stakeholders and consumers. In this report, an analysis of the external and internal factors that have the potential to develop risks for the company has been performed. Along with that, a risk management plan in order to eradicate potential risks of the company has been developed in this report.
Like any other organizations, the stakeholders of the Woolworths company includes its consumers, employees, suppliers, shareholders and debt funders. In addition to this, other stakeholders of the company include franchises, unions, media, NGOs, organized business, and community interest groups. In the following table, a stakeholder analysis of three major stakeholders of the Woolworths Group limited has been conducted.
|
Stakeholder |
Roles and Responsibilities |
Power in the business |
|
Consumers |
The role of the consumer is to pay for the products as well as services offered by the Woolworths company. The consumers pay a vital role in the economic system of the company since increasing consumer demand motivates the produces and enhance the revenue of the company (Marraccini et al., 2012). |
Considering the fact that the number of consumers of the Woolworths company is huge, the power of the consumers in business in high. |
|
Employees |
The chief role of the employees working in Woolworths organization is stocking shelves, merchandising, providing assistance to the consumers, consumer service, operating the stores and others. The role of the manager is to manage the employees so that their productivity gets increased. |
Currently, the total number of employees in the mentioned organization is 2,02,000. Thus it can be understood that the power of employees in the business is high. |
|
Shareholders |
Three of the major shareholder of the company includes Perpetual Investment Management Ltd., The Vanguard Group, Inc. and BlackRock Fund Advisors. Shareholders do not normally have any rights to be involved directly in company management (Keith 2012). They connect with the management of Woolworths through the boards of Directors. |
In spite of the fact that the shareholders do not possess the right to participate directly in the decision making of the company, their investment is highly crucial for the prosperity of the company. Thus the power of shareholder in Woolworths is moderate to high. |
In order to properly address as well as eradicate current as well as potential risks associated with Woolworth organization, it is crucial for the organization to address the issues in a transparent manner. The scope of risk assessment of the organization is as follows:
- Education and Training
- Equipment Arrangement
- Monitoring and evolution
- Legislative Support
In order to develop an appropriate risk assessment plan, it is crucial for the management to analysis it’s external as well as internal environmental factors that have the potential to hinder the operation of the organization. In order to analyze the external environment of the company, PEST analysis of Woolworths has been performed.
Stakeholder Analysis of Woolworths
Political Factor: The political stability of Australia attacks a huge range of foreign investors that in turn, impose a positive impact on the business operation of Woolworths (Knox 2015). Moreover, considering the fact that the population of Australia is an ageing population, the government is provided several facilities to the retail industry so that they can recruit employees from other parts of the world.
Economic Factor: In spite of the fact that Australia is a developed country, the recent recession along with higher unemployment has imposed a severe negative impact on the financial condition of the consumers. Both the mentioned factors have the potential to cause the financial decline of Woolworths. As a result of the global financial crisis, the organization was compelled to close its operation in the UK. However, the Australian retail industry had better stability than its competitors across the world during the time of global recession.
Socio-cultural factor: In spite of the fact that Australia is a land of cultural diversity, the cultural competence of Australian citizen is found to be moderate (King and Thobela 2014). Moreover, due to globalization, the need for consumers in the Australian retail sector is constantly changing. The management of Woolworths has identified the importance of the experience of the consumers as a part of their sales and profitability.
Technological factor: Being a developed country, Australia is highly advanced in Technology. This factor has imposed a positive impact on the business of the organization by improving the shopping experience of the consumers as well as by proving efficient tools and communication methods to the managers for proper employee management (Arli et al., 2013).
In order to analyze the microenvironment of the company, SWOT analysis is performed in the following table.
|
Strengths |
1. High brand equity: Being the pioneer and one of the oldest company to introduce the modern retail model in Australia. 2. Huge market share: The company has a commendable number of supermarket outlets in Australia and New Zealand. 3. High Consumer loyalty: High brand value, efficient services and high-quality products offered by the company to the consumer has resulted in high consumer loyalty (Woods 2012). 4. The company has a good amalgamation of online as well as brick and mortar based sales channel. 5. The company has efficient CRS program. |
|
Weaknesses |
1. Considering the fact that the mentioned company has currently expanded its business in two foreign locations, Woolworth lacks international presence. 2. Lack of international presence along with high completion in the western retail industry has resulted in a decrement of competitive advantage odd Woolworths (Pang, Chen and Wang 2015). 3. Another major weakness of the company is a late entry in Online retail. |
|
Opportunities |
1. Considering the fact that the retail industry in the east is far less congested compared to the western retail industry, Woolworths can expand its business in the eastern countries like China, India and Bangladesh. 2. The company can invest in better promotional techniques in order to win back the consumers (Haji et al. 2013). 3. The management of Woolworth can use social media platforms as an efficient promotional tool. |
|
Threats |
1. Increasing consumer loyalty of competitors like Coles and Wesfarmers in the western retail industry can be considered as one major threat to Woolworths. 2. Slow growth of online retail in Australia can be considered as another major threat to the company. 3. Aggressive expansion of Aldi acts as another threat to the company. |
Table 1: SWOT of Woolworths
Source (Created by Author)
|
Context |
Associated Risks |
Degree of Risk |
|
Organizational Structure and power relations |
Ø Lack of flexibility in the traditional organizational structure of Woolworths Ø Risk of Unethical activities and power misusage in the higher position. Ø The power struggle between managers |
High |
|
Resources |
Ø Lack of efficient suppliers in India. Ø Excessive employee attrition (Chen et al. 2015) |
High |
|
Risk perception and Strategy |
Ø The distraction of management from the company’s core supermarket business Ø Lack of training to improve the skills of the employees |
Moderate |
|
Motivation |
Ø Employee attrition due to lack reward system and inappropriate leadership skills. |
Moderate |
|
Political |
Decrement in competitive advantages due to the low barrier for new entries in the Western retail market. |
Moderate |
|
Economic |
Decrement in overall revenue due to the recession |
High |
|
Socio-cultural |
Ø The conflict between employees due to inappropriate cross-cultural management Ø Employee attrition due to misunderstanding (Woods 2012) |
High |
|
Technological |
Ø Decrement in revenue due to lack of technological advancement in India |
Moderate |
Table 2: Context of Risk of Woolworths
Source (Created by Author)
Risk management Objectives
- Vision: To satisfy the consumers by providing quality products as well as services and to create an employee-friendly workplace.
- Mission: To enhance the yearly revenue of the company and prevent employee attrition by implementing effective training and development strategies (Haji et al. 2013).
- Objectives and Critical Success factors :
- Enhancing the market share
- Improving the online services by conduct huge investment in their IT systems
- To provide quality staff to help consumers and provide them with the quality shopping experience.
- Financial objectives
- To reduce the Cost of the company.
- To monitor advertising costs and find the best value possible for future marketing campaigns.
- WHS requirements and Relevant Legislation
- Proving employees with safe work premises
- Assessing the risks and implementing appropriate measures to control them
- Ensuring safe usage as well as handling of machinery and materials.
- Ensuring insurance and workers compensation for the employees.
- The business partnership of Woolworths
Woolworths has established an effective business partnership with a good number of suppliers in Australia, New Zealand, and India. Besides that, the company has established a partnership with the BP oil and Gas Company in order to enhance its revenue.
- Business goals
Short-term business goal:
- To enhance the profit of the company by 15 per cent by the end of the year 2019.
- To merge with major competitors like Pick n’ Pay supermarket chain (King and Thobela 2014).
Long-term Goal
- To gain back the reputation and consumer loyalty of the Company.
- To expand in other parts of South East Asia.
Analysis of Risk identification Methods and Risk analysis tools
|
Risk Identification methods and tools |
Purpose |
|
Documentation Reviews |
Reviewing previous documents will enable the management to understand the type of risks that had priory taken place. |
|
Conducting a survey of the employees |
This risk identification method will enable the management to identify issues of the employees related to workplace environment (Knox 2015). |
|
Interviewing |
Interviewing project participants, stakeholders, experts will enable the management to identify risks. |
|
Root Cause Analysis |
Root causes are determined for the identified risks. These root causes are further used to identify additional risks. |
|
Checklist Analysis |
The checklist of risk categories is used to come up with additional risks for the project. |
|
SWOT analysis |
Strength and weaknesses of the company are identified in order to determine the risks |
Table 3: Analysis of Risk identification Methods and Risk analysis tools
Source (Created by Author)
|
Risk Priority and Description |
Level of Risk |
Risk Treatment |
Monitor and Review |
||
|
Treatment action |
Responsibilities |
Implementation Date |
|||
|
Employee attrition due to lack flexibility in the organizational organization’s structure and lack of intrinsic as well as extrinsic motivation |
Low |
To conduct meeting with the managers in order to create a more flexible organizational structure. Apart from that, extrinsic motivational tools like reward system and yearly performance appraisal should be implemented by the management (Marraccini et al. 2012). |
CEO and managers of all departments |
12th June to 15th June |
By collecting feedback |
|
Conflict due to lack of cross-cultural competence among the employees and lack of work satisfaction |
Moderate |
Employees should be educated about the importance of multicultural competence in the retail industry. Proper training should be provided to the employees in order to develop their cultural competence. Moreover, non-monitory rewards like office parties should also be arranged by the management to enhance employee motivation (Dos Santos, M.A., Svensson and Padin 2013) |
Human Resource Manager and Professionals of Woolworths |
17th June to 17th July |
By regular investigation |
|
Loss of consumer loyalty due to inefficient service and decrement in the quality of products offered by the company to the consumers |
High |
Training should be provided to the employees in order to enhance their professional skills. |
Human Resource Manager and Professionals of Woolworths |
17th June to 17th July |
By regular assessment of the skills of the employees |
Table 4: Risk Treatment Plan
Source (Create by Author)
Reference List
Arli, V., Dylke, S., Burgess, R., Campus, R. and Soldo, E., 2013. Woolworths Australia and Walmart US: Best practices in supply chain collaboration. Journal of Economics, Business & Accountancy Ventura, 16(1).
Dos Santos, M.A., Svensson, G. and Padin, C., 2013. Indicators of sustainable business practices: Woolworths in South Africa. Supply Chain Management: An International Journal, 18(1), pp.104-108.
Dos Santos, M.A., Svensson, G. and Padin, C., 2013. Indicators of sustainable business practices: Woolworths in South Africa. Supply Chain Management: An International Journal, 18(1), pp.104-108.
Haji Ali Afzali, H., Gray, J., Beilby, J., Holton, C., Banham, D. and Karnon, J., 2013. A risk?adjusted economic evaluation of alternative models of involvement of practice nurses in the management of type 2 diabetes. Diabetic Medicine, 30(7), pp.855-863.
Keith, S., 2012. Coles, Woolworths and the local. Locale: The Australasian-Pacific Journal of Regional Food Studies, 2, pp.47-81.
King, L. and Thobela, S., 2014. Woolworth’s farming for the future. International Food and Agribusiness Management Review, 17(B).
Knox, M., 2015. Supermarket monsters: The price of Coles and Woolworths’ dominance (Vol. 6). Black Inc..
Marraccini, T., Meltzer, S., Bourne, L. and Elizabeth Draper, C., 2012. A qualitative evaluation of exposure to and perceptions of the Woolworths Healthy Tuck Shop Guide in Cape Town, South Africa. Childhood Obesity (Formerly Obesity and Weight Management), 8(4), pp.369-377.
Pang, L.P., Chen, S. and Wang, J.H., 2015. Risk management in portfolio applications of non-convex stochastic programming. Applied Mathematics and Computation, 258, pp.565-575.
Woods, M., 2012. Risk management in organizations: An integrated case study approach. Routledge.
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