Major Issues
Australia has been proven to be one of the most profitable and appealing market for all the companies through out the years. The future of the retail industry of the country is basically shaped by some f the disruptive forces like the changing patterns of spending of the consumer of Australia as well as the arrivals of the companies of the overseas who bring along a whole new approach of the retailing [1]. The assignment illustrates a detailed report on the key management units in the food and the retail industry of Australia projecting the practices related to the analysis of the management together with their evaluation with some of the relevant theories of the management. The report includes the narratives of the assessments together with the collection of the information from some of the reliable sources including the company annual reports, reports of the industry and other efficient and reliable reports. The assignment highlights the market structure and the performance of Woolworth as compared to the super market chain and performance of Coles in the Australian market.
As per the latest updated dated on November 2018, Woolworths performance was just at the rock bottom. Before 18 months, the company had been suffering from $1.2bn full year loss in the year 2016 due to the disastrous foray in the masters hardware chains. Once the envy of the supermarket, Woolworths has been facing numerous challenges in the current decade [9]. Over the decade as the bunnings improvement of the home business swallowed all of the small players across the Australian market. According to the report and the analysis by the governmental publications, some of the major factors for the downturn of the Woolworths are as follows [16]. Factors such as the poor strategies, choosing of the wrong locations, wrong locations and issues related to the culture of the workplace have contributed to the loss and the down turn of the company and the market share of the company as a whole.
Some of the management theories in connection the case study of this report are basically the change management theories.
The Lewin’s model or the theory is one of the most renowned approaches among the scenario of the change management. This theory perfectly fits the scenario of the Woolworths and the time of its loss. The maker of the theoretical model describes the three stages of the change management by unfreeze, make changes and refreeze process. The process of the unfreezing helps towards the elimination of existing bias and commonly accepted mistakes of the company [2]. Applicable to the perception of the company towards the upcoming change, the process of unfreezing convince the company for the change, The next step deploy the required changes to the company. Refreezing including the status of the new quo of the company.
Figure 1
Source: (author)
The next model of discussion will be the McKinsey 7-S model. This particular model is great towards effective analysis of the coherency of the company. This model is suitable for the scenario of the retail chain of Australia which was drowning suddenly [10]. The theoretical model includes seven essential aspects of the company and their effect towards each other. These factors includes strategy, systems, structure, style, shared values, skills and staff.
Management Theories related to this report
Figure 2
Source: (author)
The above figure explains the market structure of the company towards the proper access to the strategy, development of the structure, analysis of the system of the company, assessing of the skills [15]. The model helps in highlighting the weakness in the company and furthermore explains to make sure that each and every aspect of the company under discussion supports the others illustrating a formidable business plan for flexible change. To summarize, this theoretical model creates an overview of the coherent and effective elements of the company for the analysis of the current situation and for the drafting of the changes for tacking of the problem.
The current management practice of the company of Woolworths include their decision of ditching the masters and getting back to the basics. The company furthermore earned the tactics of spending $1 billon for lowering the prices for the competing with the other leading companies of retail industry in Australia, namely the Aldi and Coles [11]. The current marketing practices is basically focusing on the needs of the customer and the relative price, the convenience , the fresh food and the services [14]. One of the major marketing techniques applied by the company, Woolworths is that the company has stopped talking and generating campaigns relate to the fresh food and have started doing some of the major campaigns of the compelling discounts and sales via the commercials.
Q1: Identify major issues and provide justifiable supportive evidences.
One of the major issues as highlighted in the case study report is the down turn or the loss of the company, Woolsworth which resulted the retail company of Australia to lose $1.2bn full year loss in the year 2016. The tremendous loss of the company was actually the result of the disastrous foray in the chain of the Masters hardware [3]. The issue rose due to the lack of the proper management and the marketing skills of the company as a whole down turning the overall business platform. Another issues is the marketing strategy of the company which included only the campaigns and the promotions related to sales and cheap to attract the customers and not about the fresh foods [12]. This is because, it is basically one of the bold predictions that it is easy to go from being in a groove to being a rut and suddenly the tail wind of the momentum propels to become a headwind.
Q2: Through your business research explain differences amongst Wesfarmers, Woolies and Aldi operations
The Woolworths was at the rock bottom just before 18 months and headlined half of the years profit of nearly $1bn that was a handy turnaround from the big loss of the year 2016. Woolies on the other hand cemented its dominance over Coles [4]. The fortune of Coles have been long tied down to the campaign featuring the pricing strategy which are pretty much down and furthermore uses the big red hands for the effective marketing for a long time. According to () Aldi will basically continue to lighten Woolworths and the Coles the increase in the appeal to the customers who are wealthy and forces the two largest supermarkets of the country for dropping their price levels. The company, Aldi launched in Australia in the year 2001 with the plans or the aims to expand the business to the eastern stores [13]. The two other companies, the Coles and the Woolworths both initiated to increase their own share of the market in the aim to stop the customers from leaving them for Aldi. Both the companies dropped prices by 2 percent and 1.6 percent as per the financial reports.
Current Management Practices
Q3: Thinking critically and futuristically explain clearly who will be the winner in Australia 2021?
With the context of the critical and the elaborate illustrations , the winner will be Aldi [6]. This is because as per the current financial reports, this company has been continuously lightening the coffers of Woolworths and Wesfarmers with its increase in the appeal to the customer who are wealthy in nature [5]. The west farmers have been consistent through out the years from 2013 to 2017 leaving behind Woolworths who have recently faced a huge loss and have been trying to stand in the market.
According the current reports, the owner of the Coles, Wesfarmers identified that its credit ratings were insulated by the price of the supermarket since it only contribute 38 percent of the conglomerate’s last year earnings. Both the Coles and the Woolworths have been working on their base of the cost and the efficiency of the supply chain for the offset of the reduction in the price and the ongoing pressure of the costs [7]. Though the company, Woolworths and Coles have been running successfully even after the down turn of the previous one before 18 months, some of the recommended factors for the advances and the acceleration of the business in the retail market are as follows. Factors such as the lack of the industry knowledge, poor marketing strategies, inadequate capitalization and the failure towards the establishment of the goals needs to be revised. The companies need to plan ahead towards the understanding of the customers, keeping up with good financial records and utilize sound management practices and theoretical applications for making any sort of decisions and for running the business [8]. This will enable the organization to grab the opportunity for growth, treatment and acceleration of the market share of the business in the retail sector. Furthermore the organization should engage in the promotions and the strategies for the attraction of the new customers
References
“Australian Food & Grocery Council,” Australian Food Grocery Council Advertising to Children Comments. [Online]. Available: https://www.afgc.org.au/publications/state-of-the-industry-reports/. [Accessed: 19-Dec-2018].
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