Background of Woolworths Limited
Discuss About The Competitive Advantage Achievement Through.
The “advent of globalization and the recent developments in the fields of technology as well as the innovations has much transformed the way the various business organizations transact their business in the recent times” (Wagner and Hollenbeck 2014). It is a reflection of this that the level of competition faced by the various business organizations has increased significantly in the recent times and thus the various business organizations take the help of various innovative strategies to mitigate the level of competition faced by them in the business world (Wagner and Hollenbeck 2014). These innovative strategies not only help the various business organizations to mitigate the high level of competition faced by them within the business world but also help them “to bring about the overall growth as well as the development of their entire business process” (Hoejmose, Brammer and Millington 2013). Therefore, it would be apt to say that it has become very important for the various business organizations in the recent times to take the help of diverse kinds of innovative strategies to stay ahead of their business competitors operational within the same field of business (Hoejmose, Brammer and Millington 2013). This report will discuss about the competitive strategies of the company “Woolworths Limited” while focusing on the situational analysis of the concerned organization and the business strategies used by it to “bring about the overall growth as well as the development of its business operations”.
The company “Woolworths Limited”, founded by “Percy Christmas, Stanley Chatterton, Cecil Scott Waine, George Creed and Ernest Williams” in 1924 is not only one of the major retail business organizations of the nation of Australia but also of the world (Woolworthsgroup.com.au. 2018). The business organization under consideration here provides a range of retail services to the customers of the nation of Australia starting from groceries to electronic and other products as well as services. The company initially started as a grocery store in the year 1924 however with the changing “needs as well as the requirements of the customers” the company under consideration here has much widened the range of products as well s services offered by them to the customers from the different parts of the nation (Woolworthsgroup.com.au. 2018). It is a reflection of the effective services provided by the company under consideration here that it is the second largest business organization in the nation of Australia in terms of the annual revenue generated by it (Woolworthsgroup.com.au. 2018). As per another report, “Woolworths Group is the largest takeaway liquor retailer in Australia, the largest hotel and gaming poker machine operations in Australia and was the 19th largest retailer in the world in 2008” (Woolworthsgroup.com.au. 2018). Furthermore, the incorporation of the latest technology in the business process of the organization has affected the prospects of the business organization in a positive manner and it is a reflection of this particular fact that the annual sale of the company for the year 2017 was an impressive “$41.15 B” (Forbes.com. 2018). The below given figure provides the financial details of the business organization under consideration here-
PESTLE Analysis of Woolworths Limited
Figure 1: “Financial details of the company Woolworths Limited”
Source: “Factset, Bloomberg, S&P Cap IQ; Forbes”
A PESTLE analysis of the business organization would reveal the following facts-
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Political |
· The government of Australia is one of the largest democracies of the world and therefore the nation enjoys a stable political climate which is very congenial for trade and commerce. · The government of the nation takes active initiatives for the growth of trade and commerce. Opportunity: The stable political climate of the nation actually acts as an opportunity for the concerned business organization and the organization can take the help of the stable political environment of the nation for its business purposes (Armstrong et al. 2015). |
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Economic |
· The world at the present moment is still reeling from the adverse effects of the economic recession which it faced a few years ago. · This particular factor has adversely affected the buying pattern of the customers and it is a reflection of this that the customers in the present times have become more conscious about their shopping list. Threat: This particular economic condition of the nation acts as threat to the concerned business organization as it has indirectly affected the buying behavior of the customers. |
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Social |
· The society of Australia is very liberal one and open to change. · The people of the nation like to take the help of the recent developments in the fields of technology. Opportunity: The concerned business organization can take the help of this particular social condition of the nation to focus on the online services provided to them by the customers (Armstrong et al. 2015). |
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Technological |
· Australia is a first world country and therefore it can be said that the nation is a fairly developed one in terms of the technological advancements. · The government of the nation itself encourages the different business organizations of the nation to take the help of the technological advancements of the nation. Opportunity: The technological advancement of the nation is likely to act as an opportunity for the concerned business organization and the organization can take the help of the technological advancements of the nation to further the prospects of their business (Saeidi et al. 2015). |
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Legal |
· The business organization needs to take into consideration the various legislations of the nation of Australia like the labor laws, the tax laws, anti-discrimination laws and others for the purpose of the conduct of their business in the nation of Australia. Threat: The legislative factors actually act as a threat for the business organization as it is often seen that the business of the concerned organizations gets adversely affected on the score of these legislations (Saeidi et al. 2015). |
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Environmental |
· The nation of Australia takes active initiatives for the conservation of the environment and with this particular view has passed regulations which the organization under consideration here needs to follow. Threat: The environmental factors actually act as a threat for the organization as it is often seen that if the organization goes on to follow all the environmental legislation then its productivity gets hampered. |
An analysis of the business organization on “Porter’s Five Forces” would reveal the following facts-
The business organization under consideration here has been in business for more than 90 years and is one of the most popular organizations in the nation of Australia (Barney 2012). Therefore, it can be said that the organization faces a very “low level of threat from the new entrants entering into the business market”.
The business organization under discussion here is one of the largest business organizations of the nation in terms of the annual revenue which it earns. Furthermore, the organization also holds the maximum amount of market share and it is a reflection of this that the organization under consideration here faces a very “low level of threat from its rivals operational in the same field of business” (Barney 2012).
The business organization under consideration here takes the help of multiple supplier systems in a bid to not only reduce the bargaining power of the various suppliers which are related to it but also to ensure that the organization gets timely delivery of the products offered by it to the customers (Bharadwaj et al. 2013). Therefore, it would be apt to say that the “bargaining power of the suppliers related to the organization is very low”.
The business organization under consideration here provides a range of products as well as discounted offers which are not provided by any other business organization in the nation of Australia (Bharadwaj et al. 2013). Furthermore, the organization also provides online or e-commerce services to the customers which is provided by very few business organizations in the nation of Australia in the retail sector (Bharadwaj et al. 2013). Therefore, it would be apt to say that the “bargaining power of the customers related to the concerned business organization is very low”.
It is true that the company “Woolworths Limited” is one of the largest business organizations of the nation of Australia and holds the majority of the market shares related to the retail sector in the nation. However, the company at the same faces a considerable amount of rivalry from the various other business organizations operational within the same field of business like Amazon, ALDI and others (Business Insider Australia. 2018). It is a reflection of the high level of the competition faced by the organization that the average prices of the shares related to the organization fell by 2.1% in the year 2017 (Business Insider Australia. 2018).
Political Factors
The business organization under consideration here has a number of competitors in the nation of Australia operational in the same field of business and which more or less offers the same kind of services to the customers (Urbancova 2013). For example, the company Amazon Inc offers the same kind of services to the customers on a worldwide basis just like the company Woolworths and has been much appreciated by the customers in the recent times (Business Insider Australia. 2018). Furthermore, the organization also provides regular sales as well as discounted offers to the customers and therefore it would be apt to say that in the recent times has emerged as one of the major competitors of the company Woolworths (McGrath 2013). The business organization ALDI, on the other hand, follows the policy of cost leadership to reach out to a larger number of people (Business Insider Australia. 2018).
The various strategies used by the business organizations in the present times are the tactics or the policies which they utilize “not only to out rival their key competitors operational within the same field of business but also to bring about the overall growth as well as the development of their business” (Hoejmose, Brammer and Millington 2013). However, it is often seen that a “mistimed or misplaced strategy can instead of enhancing the prospects of the business organization can hamper its prospects in the longer run” (Hoejmose, Brammer and Millington 2013). The company Woolworths takes the help of various strategies for their business process like the strategy of providing online or e-commerce facilities to the customers, the offering of regular sales as well as discounted offers, offering traditional business facilities for the conservative customers and others. It is significant to note that these strategies have helped the business organization in a considerable manner and has contributed much towards the development of the organization in the present times.
It is true that the business organization under consideration here is the second largest business organization of the nation of Australia in terms of the revenue which it generates. However, the organization can take the help of several new strategies to further the level of their growth. Firstly, the organization can enhance its online presence in a much more effective manner than it already has like the company of Amazon. Secondly, the organization can further enhance its offline business which forms the core of its business activities. Thirdly, the organization can follow the lead the other companies like Amazon and others and expand into the other nations of the world for its business purposes.
Conclusion
To conclude, the business world in the present times has undergone much transformation in the present times and it is a reflection of this that the various business organizations in the present times in addition to the traditional business model also take the help of the e-commerce business model. Furthermore, the level of rivalry or competition faced by the various business organizations in the present times has increased significantly in the present times on the score of various factors and thus most of the business organizations in the present times are increasingly taking the help of new innovative strategies for the purposes of their business.
References
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McGrath, R.G., 2013. The end of competitive advantage: How to keep your strategy moving as fast as your business. Harvard Business Review Press.
Saeidi, S.P., Sofian, S., Saeidi, P., Saeidi, S.P. and Saaeidi, S.A., 2015. How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of Business Research, 68(2), pp.341-350.
Urbancova, H., 2013. Competitive advantage achievement through innovation and knowledge. Journal of Competitiveness, 5(1).
Wagner III, J.A. and Hollenbeck, J.R., 2014. Organizational behavior: Securing competitive advantage. Routledge.
Woolworthsgroup.com.au. 2018. Woolworths Group: Quality Brands and Trusted Retailing. [online] Available at: https://www.woolworthsgroup.com.au/ [Accessed 6 May 2018].
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