Strategic Management: Woolworths Organization
The identification and the description of the strategies that are carried by the managers are termed as the strategic management. These are mainly carried by the managers so that they can achieve a better performance as well as a competitive advantage of the organization in which they are working. The bundles of the decision, as well as the acts which are undertaken by the managers, are also termed as the strategic management. The strategic management, in turn, decides the future of the organization by determining the performance of the organization (Hill et al. 2014).
Woolworths is an Australian company that founded in Sydney in the year 1924. It is one of the largest supermarket chains in Australia, and it is operating in more than 961 stores across the country. Woolworths has team associates of more than 111,000 in their stores as well as the distribution centers and the support offices. The team associates are responsible for providing superior service and convenience to the customers. Woolworths works in close cooperation with the Australian cultivators and the farmers of which they are proud. They work directly with the cultivators and the farmers in order to make sure that they supply the best products to the customers (Arli et al. 2013).
The company sources 97 percent of all fresh fruits and vegetables and 100 percent of fresh meat from the farmers and the cultivators in Australia. The company also provides the facility to the customers with the help of which the customers can shop from their home with the aid of the computer. Woolworths also have an app of their own which is known as the Woolworths Supermarket App. As a result, the groceries are delivered directly to the kitchen worktable (Hattersley et al. 2013).
Vision and Mission and statement of values
The mission and the vision value relate to the purpose of an organization, and they characteristically communicated in some written form. The mission statement demonstrates the existence of the organization and how the organization aims to serve its stakeholders. In contrast, the vision statement deals with the future-oriented declaration of the purpose and the goal of the organization (Center 2012).
The mission of Woolworths is to deliver the customers with the right experience related to shopping each and every time they go shopping. Woolworths also provides an excellent working environment and also treat the workers with respect and self-esteem. The mission statement also includes the fact that the organization will lead its customers by providing a profound knowledge about the products and the world in which they reside. The vision of Woolworths is to provide exciting new offers to the customers and also to provide the freshest food delivered by the fastest supply chain. The vision of the organization also includes more direct sourcing in order to develop the quality (Fearne and Hughes 2013).
(Source: 2GB 2016)
The value of the organization is that they take the values of their very acutely. The value of Woolworths helps to measure the behavior, acts, and the choices. The value of Woolworths includes the quality and the style that is the company delivers its best. Woolworths do not compromise on the quality that is provided to the customers. The organization also believes in offering the quality product to the customers at a good price.
The appropriateness of the mission statement is that it helps the organization that is Woolworths to focus on the operational decision. The mission statement will help Woolworths to help their workers and will guide the organization in their decision making process. A mission statement will also help the organization to make the customers the central point that in turn will help to earn a profit. The appropriateness of the vision statement is that it will provide a route to Woolworths for the next ten years. The vision statement mainly takes the mission statement into account and adds the constituent in the values of the human (Ekpe et al. 2015).
The potential for improvement is that the mission statement should mainly focus on the satisfaction of the needs of the customers rather than an emphasis on the products supplied by Woolworths. The basic requirements of the market should last for long as the goods and the technology become out-of-date eventually. Woolworths should also define the sort of customer that it wishes to serve.
The current business plan of Woolworths is mainly on four strategic priorities. The strategic priorities are as follows:
1. The maintenance of the track record to build new growth business
2. The extension of the leadership in food and liquor
3. To act in the portfolio so as to maximize the value of the shareholder
The objectives of the organization are as follows:
A change in business – The best part of retailing is that it never stands still which, in turn, makes the retail business so exhilarating and lively. At this point, Woolworths is undergoing a considerable change as the customers search for greater value and have more choices at their fingertips. The shopping behaviors of the customers are changing with each passing day. As a result, Woolworths is responding to the new era by placing the basis for a new stage of growth as well as prospects (Gardner and Sheppard 2012).
The objective is appropriate as the organization places the customers at the heart of their business and they listen to the demand of the customers regarding the product. This, in turn, will help the organization to get more customers, and this will increase the demand for the products.
The future of shopping – The objective of future shopping will help the customers to shop anytime and at any place they want. As a result, the customers will accurately have the capability to shop their products in the palm of their hand. This will become possible due to the mobile technology that is becoming more advanced with each passing day. The future of shopping needs to be changed, and it has thus become an important objective of the organization. In today’s world, the customers mainly prefer to move impeccably and fluently between the physical and the original stores so that they can shop in the way that goes with them (Cummings and Worley 2014).
The objective is appropriate as the business of the organization will become more familiar and multi-optional. The main reason for this is the usage of the websites as well as the mobile apps of Woolworths.
Working harder for customers – More than 18 million customers are served by Woolworths each week. The organization needs to work hard for the customers in order to earn their habit and also to recompense their loyalty.
The appropriateness of the objective is that Woolworths Rewards has become the most attractive supermarket loyalty program in Australia. As a result, the customers will get attracted towards the organization as they will be able to earn Woolworths Dollars, and also they will get the opportunity to get money off their shopping. The customers are mainly looking for such markets where they get a wide range of offers and promotion. In this case, Woolworths will help to meet the expectation of the customers (Mortimer 2015).
The internal and the external analysis
The internal analysis or the internal environments of an organization are mainly identified by analyzing the strength and the weaknesses of the firm. The strength of the company is that the organization has a strong financial performance and also it has become a trusted brand name in the retail industry and has also become successful in gaining reputation. Woolworths was also voted as the sustainable retailer of the year by BRM AMP. Being a strong financial performer, Woolworths has reached a growth of almost 7.96 percent over the last five years. It is quite large as compared to its competitors such as Coles. As a result, the company will expand their market by opening added stores.
Figure: The comparison of the competitors with Woolworths
(Source: Continuum 2011)
The organization also shares a positive relationship with the suppliers, and they are proud of the relationship they share with the suppliers. The organization is also known to employ the efficient workers as compared to the competitors of Woolworths. The company mainly prefers to employ the middle-aged workers instead of the young workers, and it focuses primarily on the training and development of the employees (Nenycz-Thiel and Romaniuk 2012).
However, the organization will share both strength and weakness, and one of the major weaknesses of Woolworths is that the organization has an insignificant international presence as compared to its competitors. The organization also has a restricted geographical share of the market. Most of the business operations of Woolworths are restricted to Australia and New Zealand (Knox 2014).
It is vital for Woolworths to recognize and to examine the influence of the external analysis on its productivity as well as the achievements of the approaches to the business. The business performances of an organization are mainly affected by the external factors. The identification of the position of Woolworths in the retail industry will help the organization to adapt the competitive advantages that will, in turn, help the organization to become successful. The external analyses of the organization are mainly defined by the Porter’s Five Analysis which is as follows:
1. The bargaining power of the suppliers – The business related to Woolworths have a low dependence on the suppliers. In other words, the organization has a weak bargaining power of suppliers. The most important reason for the weak bargaining power of suppliers are the substantial amount of retailing market share in Australia as well as New Zealand and also a large number of goods that are sold to the industry (Sutton-Brady et al. 2015).
(Source: Coburn Architecture 2016)
2. The bargaining power of the customers – Most of the customers of Woolworths is individual buyers who have a strong bargaining power. As a result, the customers have the authority to bargain and compel the company to lower the price. On the other hand, one of the main strategies of Woolworths is to meet the needs of the customers by delivering products at a reasonable price (Rahim 2015).
3. The threat of new retailers – Woolworths do not have the possibility to face the threat from the new retailers. The main reason is that the organization has set up the business with a huge number of stores and it will not be possible for a retail company to invest a lot of amount of start-up capital in order to operate the business. Another important reason is that Woolworths acts as an overriding player with a variety of access to the distribution channels and also the trusted brands in the retailing business. As a result, the new retailers will come across a lot of problems and they have to undergo risk (Keith 2012).
4. The threat of substitute goods and services – The business related to Woolworths will face a high competition in terms of the substitute goods and the services. All the supermarkets are supplied with the substitute products and in that case the Supermarkets needs to come up with the strategies which are innovative and also helps to build the reputation of the organization (Manzaneque Corona 2014).
5. The rivalry among the competitors – The market share of Woolworths are likely to get restricted due to the strong presence of the competitors in Australia retail industries.
An Appropriate Strategy
The strategy in turn will help to provide the products at a lower price and it also provides more compelling offers as well as greater innovation. The appropriate strategy that is relevant for Woolworths is the pricing and the range strategy. The strategies are as follows:
The strategy related to pricing and range – Woolworths implemented a new strategy which is related to pricing that will in turn counteract Coles, one of the major competitors of Woolworths. The strategy will include the lowering of the price, a better variety of products. Woolworths itself will play a major role in order to compete with the restricted range discounters. In order to reduce the range gap, the organization will generate a higher quality and enhanced priced products. The pricing strategy is the reflection of everything that is executed in the business. The pricing strategy is mainly distinguished as a choice between offering comparatively stable prices across a broad range of goods. Woolworths do not have to follow an everyday low-price strategy; however, the organization should make it a most important factor in order to rapidly expand (Elliott et al. 2014).
The competition in the Supermarket retail industry has always been a complicated observable fact. In the equilibrium stage, the organization will choose that bundle of services that will maximize the profit. In the multidimensional bundle the most important strategy of the Supermarket should include the pricing strategy. The first strategy of the pricing strategy should include the offering of the products at a discounted rate. There are mainly two types of categories that are categorized under the pricing strategy. They are as follows:
The Everyday Low Price Pricing Strategy – This is a sort of promotional pricing strategy with the help of which, Woolworths can follow the strategy where the prices will be constantly low across the board (Danziger et al. 2014).
Figure: The store of Woolworths
(Source: Canelandcentral.com.au, 2016)
Promotional Pricing – The promotional pricing makes the use of the special discounts which in turn will attract more customers.
The pricing strategy is outlined naturally as a separate game between a finite set of players. The most favorable choice of each firm is determined by the underlying condition of the market. In order to minimize the carbon footprint, it is very important for an organization to supply low price fresh products to the customers. This will not only make the customers happy but it will also add to the benefit of the Woolworths (Cudahy et al. 2012).
The pricing strategy will also become appropriate for Woolworths in terms of the online price checking. Most of the customers do not have time to come down to the shop and buy the products. In that case, the individuals can prefer the online shopping through which, they can check the prices of the products. The pricing strategy is appropriate for this organization as it will make Woolworths more or less competitive in the market. As a result, the volume of the market share will also get affected.
The promotional pricing is the best option in today’s world. The individuals have become very selective and as a result that will affect the business of the organization. As a result, the organization needs to offer discounts and promotion so that the customers remain attracted towards the company. Since, there are many supermarket retail industries coming up the competition has also increased (Becerril-Arreola et al. 2013).
The pricing strategy also helps to set the margin of the profit by setting the limits of the number of sales. As far as the mission statement is concerned, the mission of Woolworths is to deliver the customers with the right experience related to shopping each and every time they go to shop. Hence, in order to make the customers happy with the service and help them to gain the right experience it is important to incur the pricing strategy (Kireyev et al. 2014).
As far as the vision statement is concerned, the pricing strategy will help to supply exciting offers to the customers. This can be done with the help of the promotional pricing strategy that will offer discounts and offers to the customers.
It has been concluded that Woolworths has team associates of more than 111,000 in their stores as well as the distribution centers and the support offices. The team associates are responsible for providing superior service and convenience to the customers. Woolworths is undergoing a considerable change as the customers search for greater value and have more choices at their fingertips. It has also been concluded that the future of shopping needs to be changed and it has thus become an important objective of the organization.
Woolworths will also face a high competition in terms of the substitute goods and the services. The pricing strategy is mainly distinguished as a choice between offering comparatively stable prices across a broad range of goods. Woolworths will help to meet the expectation of the customers as the customers are mainly looking for such markets where they get a wide range of offers and promotion.
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