Woolworths Group – A Leading Retail Brand

Overview of Woolworths Group

Discuss about the Marketing Review and Opportunity Identification for Woolworths.

Woolworths Group comprises of some of the most recognisable and loyal brands in retailing, further serving a broad range of customers. The company has recently refurbished its market positioning by introducing recent multi-million dollar campaign programme. Recent surveys of 2017 reveal that Woolworths has managed to sustain its top position in the league. Its reputation has further strengthened from 71% to around 75% with increased revenue and commercial activities (Arli et al., 2013). Woolworths has been considering its global expansion into Asia, as the organization has been only resourcing its services from the continent since five years. Woolworths is recognized for selling its products that are sourced from expert and specialized Trade Associates with specific competence in each area (Yang,  Gemming & Rangan, 2018). The ultimate business goals of the company is to establish a consumer and store-led culture as well as team and further evolve as  a lean retailer through end-to-end process along with system excellence. The three primary services provided by the company are Woolworths Supermarket, liquor retailing known as BWS and Dan Murphy’s along with hotels under the Australian Leisure and Hospitality Group (ALH Group) undertaking.

Woolworths’ determination and commitment towards diligence and integration is noteworthy whereby every facet of the business subsists with the aim of bringing ease and improvement to their customer base. The company’s strategic focus areas are regarded as an outcome of a robust materiality as well as stakeholder commitment procedures whereby each has ambitious objectives of supplying to the overall strategic plan. Its primary aim lies on providing their customers with an associated retail experience (Ferguson,  Pinnuck & Skinner, 2013). This approach of the company entails them to connecting their customers from physical store to provide them with a digital experience and further assisting their employee to further deliver a reliable and brand-focused customer experience. One of the key approaches of Woolworths approach is to leverage scale across the region of southern hemisphere (Wang, 2015). In the course of closer assimilation across the business operations, the company will motivate competence and further supplement significantly to its revenue generation.

It is resolute that the recent association regarding the sustainability between Woolworths and their contractors or suppliers is at the fundamental and broad level with a strong environmental objective. The company has immense dedication towards responsible retailing as well as sustainable growth in Australia and other foreign regions (Knox, 2015). Following to implementation of essential sustainable practices in the company, Woolworths has changed its focus towards its contractors through immense acknowledgement in order to increase the level of sustainability.

External Influencers

Several reports have revealed that Woolworths’ sales revenue has increased by over A$450 million last year whereas the earnings declined by almost A$100 million in biannual till last year (Borghei-Ghomi & Leung, 2013). The recent revenue figures has exposed that the company has been making retail spatial expansion at a rapid pace thereby, increasing the number of smaller metropolitan outlets along with new stores within the primary locations of Australia. The category development is regarded as one of the stated medium of the company for its future development. Woolworths’ development into the hardware as well as advanced accommodation sector is a logical extension of the existing retail competencies, technology and abilities of the organization (Hattersley, 2013). The company is keen to expand the advanced accommodation category in general whereby enhancing its vital innovation, aid and opportunity in both distribution and retail sector.

Certain recent data has revealed that Woolworths has over 30% of the total grocery market that includes fresh food and a further growth of around 10% points over while the Coles Group has attained around 28% share which is regarded as an increase of 0.1% point as last year’s result (Ferguson,  Pinnuck & Skinner, 2013). It should be noted that a major section of supermarkets have witnessed a decreased market share comprising of fresh food market in comparison to their grocery market share in general. The most efficient performers in this retail sector are Woolworths (26.7%) followed by Coles with around 24% market share (Woolworths group, 2018).

The company recently added over 250 products to its list of 3500 permanently low-priced products further assisting to rise up to 5 % in equivalent-store food retailing (Wang, 2015).  Thus rate of Woolworths’ market share and customer base has increased within the retail industry. 

The company comprises of three core business of food, petrol and financial services. Woolworths has been governed by three fundamental ideas of collaboration, equality and domestic resources (Yang,  Gemming & Rangan, 2018). It has been noted that the organization has outlined its three year plan in order to achieve greater consumer base by discounted price rates and enhancing all facets of customer shopping experience. 

Specialization

• Woolworths specialized in the process of production, export and local sales along with import and domestic procurement of varied types of food products.
• The company functions as a responsible citizen by not only nurturing its citizens but also following steps which are beneficial for the environment.
• Woolworths’ effective leadership skills reflect the fundamental values and principles while engaging with the employees.
• Woolworths has set a significant differentiation by serving enhanced quality products, ease and rapid services to its consumers along with its increasing presence at fuel stations has resulted in enormous brand presence of the company within the retail manufacturing industry.

 (Woolworths group, 2018) 

Technological Strategy

• Its recent digital strategy has received immense recognition because of their both e-commerce as well as in-store customer experience.
• Several reports demonstrate that Woolworths social media presence has led the company achieve a gain of over A$60 billion in revenue in 2017 which is regarded to be a 50% increase as compared from last year.

Expertise or Skills

• Woolworths has a well-established and effective customer service skills further providing communication medium through unique levels of platforms in order to facilitate employee engagement (Knox, 2015).

Services-

• Mostly specializes in offering groceries along with health and beauty goods and financial services (Yang, Gemming & Rangan, 2018).
• Woolworths’ has been delivering double digit revenue generation growth in the present financial year with the elevating earnings margin. Furthermore, the company has emphasized its digital services as an enduring growth strategy in order to improve its channel profitability.

Strengths

• Woolworths’ consists of a well-established brand portfolio with reliable supply raw materials further facilitating the company to conquer any supply chain complexities (Hattersley, 2013).
• It has further established competence in penetrating new markets and considerably successful at implementation of new strategies by further generating revenues on capital cost by creating new revenue streams.
• The company’s innovative market leadership positioning has been productively developing its competence in utilizing its market potential through its well-organized resource base in the form of technological resources, human resources as well as enhance existence across the industry (Methner, Hamann & Nilsson, 2015). 

Weaknesses

• Being incompetent in handling competitive challenges posed by new entrants, the company has lost a relevant market share in the niche categories. Further establishing internal evaluation mechanism (Borghei-Ghomi & Leung, 2013).
• Despite of being one of the leading retail organizations, Woolworths faced risks and challenges in expanding to other service segments with its existing value and culture.
• It is significant to note that the Australian government recently has posed limitations to Woolworths’s raised product price rate in collaboration with one of its strongest competitor, Coles that can be regarded as a major limitation for the company’s development (Byrne, 2014).

Opportunities-

• Woolworths has been establishing new markets due to governmental agreement. Furthermore, implementation of advanced technology level and free governmental trade agreement has offered several opportunity levels to penetrate new developing market (Knox, 2015).
• However it must be noted that the Australian retail industry has been demonstrating significant developmental potential with several factors like advancement technology, growth in supply chain management along with shift in consumer lifestyle preferences have provided significant opportunities and potentialities for the company to enhance its profitability (Theaustralian.com.au,2018).

Threats

• Increasing cost of raw material can be considered as threat to the profitability level of the company.
• Shifting consumer buying behavior from digital domain can pose threats to the current on store infrastructure driven distribution in retail market.
• One of the major threats to Woolworths can be from its greatest competitor that is the Coles Supermarket, which has been considerably dominating the retail industry as well (Merrett & Smith, 2013).
• Furthermore, governmental intervention can be regarded as another significant factor that would influence the development of Woolworths especially within the Australian retail industry (Knox, 2015).

Marketing Mix Analysis of Woolworths Group

Woolworths has made been reported of acquiring a yearly profit of $1.53 billion, further increasing its comparable food purchase by over 3% after nearly $1 billion of investment in decreasing grocery prices. A recent two year average tax rate of 35% has raised its capital for increased revenues (Ferguson,  Pinnuck & Skinner, 2013).

Woolworths’ Specialization

Strong CSR strategy to recognize the company’s sustainability goals and objectives in order to cover a broad range of stakeholder sustainability including clients, team associates and the communities in which Woolworths has its operations (Knox, 2015).

The financial trends of retail manufacturing industry have been driven by the expectancy that consumers will expend confidently in 2018. The market development is anticipated to achieve a steady growth from 3.2 to over 3.5% along with an intense competition (Borghei-Ghomi & Leung, 2013).

(Yang, Gemming & Rangan, 2018)

References

Arli, V., Dylke, S., Burgess, R., Campus, R., & Soldo, E. (2013). Woolworths Australia and Walmart US: Best practices in supply chain collaboration. Journal of Economics, Business & Accountancy Ventura, 16(1).

Borghei-Ghomi, Z., & Leung, P. (2013). An empirical analysis of the determinants of greenhouse gas voluntary disclosure in Australia. Accounting and Finance Research, 2(1), 110.

Byrne, D. P. (2014). Fuelling Australia: structural changes and new policy challenges in the petrol industry. Australian Economic Review, 47(4), 523-539.

Dos Santos, M. A. (2013). Investigating the influence of reference group judgements of global warming on consumers. Tourism & Management Studies, 9(1).

Dos Santos, M. A., Svensson, G., & Padin, C. (2013). Indicators of sustainable business practices: Woolworths in South Africa. Supply Chain Management: An International Journal, 18(1), 104-108.

Ferguson, C., Pinnuck, M., & Skinner, D. (2013). Audit pricing and the emergence of the Big 4: Evidence from Australia. University of Melbourne.

Hattersley, L. (2013). Agri-food system transformations and diet-related chronic disease in Australia: a nutrition-oriented value chain approach. Agriculture and human values, 30(2), 299-309.

Knox, M. (2015). Supermarket monsters: The price of Coles and Woolworths’ dominance (Vol. 6). Black Inc..

Knox, M. (2015). Supermarket monsters: The price of Coles and Woolworths’ dominance (Vol. 6). Black Inc..

Luiten, C. M., Steenhuis, I. H., Eyles, H., Mhurchu, C. N., & Waterlander, W. E. (2016). Ultra-processed foods have the worst nutrient profile, yet they are the most available packaged products in a sample of New Zealand supermarkets. Public health nutrition, 19(3), 530-538.

Merrett, A., & Smith, R. L. (2013). The Australian grocery sector: structurally irredeemable?.

Methner, N., Hamann, R., & Nilsson, W. (2015). The Evolution of a Sustainability Leader: The Development of Strategic and Boundary Spanning Organizational Innovation Capabilities in Woolworths. In The Business of Social and Environmental Innovation (pp. 87-104). Springer, Cham.

Theaustralian.com.au. (2018). Retrieved 1 May 2018, from https://www.theaustralian.com.au/business/companies/woolies-among-worst-hit-as-amazon-grocery-fears-rattle-retailers/news-story/25ad9fe5e52dba6734e21b565604b476

Wang, Z. (2015). Supermarkets and gasoline: An empirical study of bundled discounts.

Woolworths group. (2018). Woolworths Group Limited. Retrieved from https://www.woolworthsgroup.com.au/

Yang, S., Gemming, L., & Rangan, A. (2018). Large Variations in Declared Serving Sizes of Packaged Foods in Australia: A Need for Serving Size Standardisation?. Nutrients, 10(2), 139.

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