Evaluation of the External Environment of Woolworths
Question:
Discuss about the Analyse The Decision-Making Process Tool Of Woolworths Supermarket.
The report helps in analysing and critically evaluating the effect of the external environment on the firms. The firm that has been chosen in the entire report is Woolworths Supermarket wherein appropriate kind of frameworks help in resolving the challenges that is faced by the respective firm. Proper and synthesise of the industry specific factors in the context of the decision-making technique has to be analysed effectively for the different firms and Woolworths in a respective manner.
The main aim and purpose of the report is to identify the different kind of effects of external environment on the Woolworths firm. Proper frameworks will be applied as this will help in analysing the challenges and analyse the decision-making process as well. Proper analysis is required to be done appropriately as this will help the company in undermining the business of the retailers and analysing the preferences of the customers in an effectual manner.
The structure of the report includes the evaluation of external environment of Woolworths on the entire economy along with analysis of the strategies that will reduce the risks and mitigate the risks effectively.
Proper external analysis is required to be done of Woolworths as this will help in understanding and identifying the political, economic, social, technological, environmental and legal factors that can affect the business in both positive and negative manner.
The different kind of political factors created poor relationships with the different suppliers that led to change in the culture of the business (Hansen & Villadsen, 2017). Woolworths is one such supermarket that had been successful in the entire market had bad relationship record with the suppliers. There is huge political kind of pressure against the duopolistic nature of the entire retail market and it is becoming bitter that is undermining the retailer’s business (Capers, 2017).
The economic factors include lacklustre spending of the customers in Australia that is affecting the retailers in the entire Australian market. The regulations are eased in nature in the paving way of the retailers for the new entrants in the entire supermarket. The economic factors can affect the business of the entire Woolworths supermarket wherein the spending of the customers will be causing huge issues in the business (Yendamuri & Demmy, 2017).
The social factors include that it created poor relationship with the suppliers of the company that is leading to change in the culture of the business. The social factors are causing huge issues in the business as this will create huge pressure on them to satisfy the different needs of the customers effectively (Govindan et al., 2015).
The technological factors of the Woolworths Supermarket need to implement the SAP-based technology along with system of merchandising in order to improve the efficiency in an effectual manner. The technological advancements will help the company in understanding the needs of the customers effectively (Govindan et al., 2015).
There are different legal factors that is affecting the business of Woolworths wherein there is legal battle with the consumer commission and Australian committee. Proper recommendations are required to be done for implementation of mandatory kind of codes by NFF. The government or legal environment has the significant impact on the business in an effectual manner. The different kind of legislation along with other industrial legislations has to be analysed effectively by the company through monitoring the different functions effectually (Romiszowski, 2016).
Framework for Resolving Challenges Faced by Woolworths
Lastly, the environmental factors have to be taken care by the respective company effectively as this will create huge pressure on Woolworths. Proper investments are required to be done in efficiency of the energy along with initiatives on control of the carbon in the environment (Vahlne & Johanson, 2017).
Furthermore, the behaviour patterns of the consumers have to be analysed effectively as the different buying habits will be considered as the cultural factors. The different kind of personal factors has to be considered effectively by Woolworths wherein the age along with lifestyle of the consumers along with psychological factors help in understanding perception of the perception of the individuals in an effectual manner (Medina Munrov& Belanger, 2017).
Additionally, it has been seen that the legal environment has created huge impact on the environment wherein the different kind of industrial legislations along with monitoring the functions wherein there are different kind of tax norms and law enforcement bodies that includes the change in the government bodies along with market watch issues as well (Manson et al., 2015).
The economy plays a major role in the success of the business and there is constant business pressure on Woolworths as well (Hunink et al., 2014). There can be different kind of new technological impacts on the company that helps in innovating new products and services in the organization that can create huge pressure on the firm as well. However, there can be slow growth of the entire economy and it created growing rate of unemployment that can create pressure on the market as well (Dusseux et al., 2015).
With the proper and appropriate identification of the different external factors challenges, it is essential in nature to solve the different kind of challenges with the help of the framework in an effectual manner. Proper strategic planning is required in nature in order to overcome and mitigate the different kind of risks and drive business.
Customer Behaviour has to be influenced by brand and marketing development wherein this will help in influencing the customer behaviour (Kuratko, Hornsby & Covin, 2014). The two kinds of characteristics of the brand is that proper focus has to be provided on the choices of the customers in an effectual manner (Yoo, Sawyerr & Tan, 2015). It is known that the loyal customers are the assets of Woolworths and it is the duty of the company to ensure that the different demands and needs of the customers are met in an effective manner. In the development of the brand, proper campaign is required to be done appropriately as this will help in focusing on different aspects of the behaviour of the consumer effectively (Sterman et al., 2017).
Proper marketing campaign has to be conducted by the company wherein proper promotional events has to be conducted effectively as this can help in resolving the different cultural issues that has been faced by the individuals along with the company in an appropriate manner (Laursen & Salter, 2014). The psychological factors have to be updated in an effectual manner by the company wherein proper update requires to be provided to the customers and knowledge is required to be provided effectively as well (Ruhstaller et al., 2015). The respective supermarket needs to understand the well-being along with food habits of the company that has helped the company in adhering towards catering the needs of the consumers efficiently.
Impact of Political and Economic Factors on Woolworths
Reducing and mitigating the risks of the legal or government external environment by Woolworths as this will help in determining the external factors effectively. Preparation for the change in the policy has helped the company in monitoring the different legislation, regulations and policies effectually that can lead to failure of the business. Political stability is essential as the spending of the government will help in understanding the regulation of the trading hours and understanding then interest rates effectively. Proper changes in the policy is required to be done appropriately by Woolworths as this includes the different kind of minimal wages federation and understand the issues of the customers effectively as well (Laursen & Salter, 2014).
Managing the economy factors of the entire external business is the economic factor to yield proper opportunity and this is one of the best strategies to drive the success of the business effectively. The strategy that is predictive in nature has helped the company in managing the different economic factors that is essential in reducing the negative impact of the changing economy on the entire business. Proper analysis is required to be done wherein the cultural and personal values has to be understood and analysed effectively.
Proper branding and understanding buying behaviour of the customers is essential and important in nature as this will help in providing satisfaction to the customers and help them in generating knowledge of the different brands in an effectual manner. Proper knowledge of the brand is essential in nature wherein the improvement of the quality is essential in nature to develop the brand and marketing tactics will help in influencing the different behaviour of the individuals in the entire market (Laursen & Salter, 2014).
Lastly, proper behaviour of the customers is essential in nature as this will provide the entire focus on creating advantage and value for the employees in the organization. Woolworths need to solve the different kind of issues effectually wherein this will solve the issues with the help of the strategic planning and understand the needs of the consumers as well. Proper focus on the loyal customers is essential in nature wherein the brand development programs has to be conducted by Woolworths wherein the company will focus on the different four external environmental aspects that will help in influencing the behaviour of the customers in the entire market (Laursen & Salter, 2014).
Resolving the different kind of grievances and issues of the consumers wherein sustainable emphasis has to be provided on the behaviour of the consumers as this will assist in understanding the needs along with preferences of the consumers effectively. Proper sustainable competitive advantage will be provided to the customers wherein the entire focus is required to be on the loyal customers as to ensure the demand is being met effectively. The cultural factors have to be analysed wherein the update of the fresh market is provided to the customers effectively and the updates help in analysing the preferences of the consumers effectively.
There are different kind of industry specific factors that creates huge influence on the process of decision-making of Woolworths. The different specific factors are as follows:
Social and Technological Factors Affecting Woolworths Business
Firstly, the size of the market has to be analysed by Woolworths in an effectual manner that will help the company in gaining knowledge on the efficiency and productivity of the firm as well. The different kind of innovative techniques has to be measured by the firm in an appropriate manner that will provide Woolworths knowledge on choices and preferences of the customers effectively.
Secondly, the government policies have to be checked effectively by Woolworths wherein the different norms of the government will help in providing knowledge on the tax policies and schemes that has to be followed by respective supermarket in the society. The entire management of Woolworths need to identify the different changes in the tax and interest rates schemes effectively as this will help them in developing course of actions for fulfilment of the different needs as well.
Furthermore, the competition of the other firms or supermarkets has to be analysed by Woolworths Supermarket as this will help in recognizing the tastes and preferences of the consumers in the market. The rate of competition has to be understood by them in order to compete with them with better utilization of resources and satisfying the demands of the customers effectually.
With the help of the SWOT analysis, it can be said that there are different kind of strengths, weaknesses, opportunities along with threats of the company. The SWOT analysis has helped the company in understanding the strengths as this has helped them in managing the different opportunities along with threats (Capers, 2017). Proper analysis of the different threats has been analysed that has helped the company in solving them and taking them as the strength and opportunity as well.
There is huge threat of the new entrants for Woolworths as they entrants are using different kind of innovative strategies by lowering the different prices of different goods and services. Woolworths has to innovate new products and services wherein this will help the company in building new economies and spending money on development along with research as well (Yendamuri & Demmy, 2017).
The bargaining power of the suppliers is one other threat wherein it can decrease the margins that can be gained by Woolworths. Woolworths needs to tackle the situation by building efficient kind of supply chain management and this will significantly improve the different kind of issues as well.
The bargaining power of the buyers is the other analysis wherein the buyers have huge demand and they are the ones who wants to buy the best kind of offerings as well. Woolworths needs to analyse and build large base of customers and streamline the production along with sales process as well (Laursen & Salter, 2014).
There are different threats from substitute services or products wherein it is seen that the new kind of products and services meet the demand of the customers in an effectual manner at less price. Woolworths needs to tackle it by increasing the switching cost for the customers in an effectual manner.
Legal Implications for Woolworths
There is rivalry among the existing kind of competitors wherein it will drive down the prices and decrease the overall profitability of the entire firm as well. Woolworths need to build sustainable differentiation and build scale as this will help them in competing in a better manner (Laursen & Salter, 2014).
With the help of the SWOT and Porter’s Five Forces analysis, it will be easier for Woolworths to handle the situation in an effectual manner. Woolworths needs to understand the issues and rivalry from the other existing firms wherein this is decreasing the profitability of the firm in an ineffective manner. The SWOT and Porter’s Five Forces will help in tackling the different kind of issues and collaborate with the different competitors effectively as well.
Conclusion
Therefore, it can be concluded that proper ascertainment has been analysed in an effectual manner by Woolworths Supermarket wherein the evaluation of the effects of the external environment on the firms has been analysed effectively that provided them appropriate frameworks to resolve the different kind of challenges in the firm.
Proper decision-making process has been analysed with the implementation and analysis of industry specific factors that has helped Woolworths in understanding the issues and solved them appropriately. The social, cultural, personal and psychological factors have been discussed wherein proper ascertainment has been done to solve such issues effectually.
Lastly, the different crucial factors have been considered by Woolworths that has helped the company in understanding the issues and solved them effectively. The different analysis has helped Woolworths in managing the brand development program along with proper researching.
References
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Hansen, M. B., & Villadsen, A. R. (2017). The external networking behaviour of public managers-the missing link of weak ties. Public Management Review, 19(10), 1556-1576.
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Ruhstaller, K., Srinivas, S., Greene, M., Lorch, S., & Bastek, J. (2015). 665: Does external environment increase the rate of preterm birth and small for gestational age?. American Journal of Obstetrics & Gynecology, 212(1), S327.
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Woolworths.com.au. (2018). Woolworths.com.au. Retrieved 6 April 2018, from https://www.woolworths.com.au/ (Woolworths.com.au., 2018)
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