Strategic

Develop and Implement Strategic Plans

1. Introduction of Woolworth

Woolworth is an Australian Super market chain which was established in the year 1924. Its headquarters is situated in Bella Vista, New South Wales.  The company operates in approx. 1000 stores in overall Australia which includes 968 supermarkets and an additional 19 convenience stores. Woolworth main products are groceries which include vegetables, fruit, meat, and packaged foods. It is one of the largest retailers of fresh fruit and vegetables across Australia. It prides itself to offer the best products to the farmers and growers. This makes the company Australia’s fresh food people. It has also grown the market online where the customers can shop at their home and the products are delivered to them on time. Its revenue for the year 2017 was $ M 55,475 (Woolworth, 2017). The company employs 205,000 employees all over the world who serves more than 29 million customers across its brands.  Its major competitors are such as Coles, Woolworths, ALDI, Foodland, and SPAR Australia. Moreover, Woolworth main focus is on building strong as well as profitable customer relationship.

Vision and Mission Statements

Vision

Its vision is “to be the most sustainable retailer all over the world”.  Woolworth major vision is “to help all Australians ‘LIVE BIG FOR LESS’ and follow a strategy to turnaround their business.

Mission

Woolworth mission is “To Deliver the best convenience, value and quality for its customers. Its mission is to put customers first across all the brands and offer the customers with good quality of products.

Woolworth values

Woolworth values inform as how it does the business across the entire group. Its organizational values include as follows:

  • Quality and Style always exceptional
  • Always give first priority to customers
  • Provide innovative products
  • Moral integrity
  • Financially strong, secure and safe
  • Sound management
  • Competent leadership and governance

2. Stakeholders of Woolworth

Stakeholders are the people that are affected by any kind of functioning of the organization. These are the people who are connected to the organization directly or indirectly. Stakeholders are divided into two categories that is external stakeholders and internal stakeholders. Internal stakeholders are the individuals who are engaged in the economic transactions. It includes customers, stockholders, suppliers, creditors, and employees. On the other hand, external stakeholders are those who are indirectly engaged in economic transaction of the business and are affected by the actions of the company. It includes general public, communities, business support groups and media (Slack, 2015). However, stakeholders of the company include employees, communities, creditors, investors, government, customers, owners, financiers and manager. Moreover, Woolworth stakeholders include suppliers, employees, shareholders, government and customers. Other Stakeholders include union, media, franchisees, community interest group, organized business and NGO’s.

3. Analyze how stakeholders can be involved in gaining support for strategic planning process

In order to have successful growth of the organization it is mandatory to build and support long term relationship with the stakeholders.  There are various things that have to be taken into consideration engaging stakeholders for the long term planning process. The first thing is communication with the stakeholders that is sharing all the information in the consistent as well as purposeful way. It is essential for the stakeholders to know the organization major purpose. It is mandatory for the external stakeholders to understand the reason behind the existence of organization and which kind of values is provided to the customers. It must also understand what kind of value it provides to its vendors and market (David, 2011). On the other hand, internal stakeholders required to know where does organization goes so that the work is aligned to them according to their goals. In order to happen all these things it is mandatory to take into consideration all the communication process like e-mail, meetings, posters, electronic messaging, newsletter etc. This would help in the reach to the strategic success of the organization like Woolworth. Another thing is actively engaging stakeholders in the process by asking inputs about strategic planning in meetings, with the help of survey, targeted suggestion boxes.

In addition, there are various benefits of engaging stakeholders in the strategic planning process. It includes decrease in the distrust of the process of project or results in an organization, increase in commitment to the objectives of projects or processes. It is impossible to have strategic planning of an organization without engaging stakeholders into the planning. Furthermore, Woolworth has to maintain strong relationship with its suppliers, customers, employees, shareholders, government and etc. for gaining strategic planning process. It is mandatory to solve the problems of the stakeholders and engage them in the decision making process (Craig and Campbell, 2012). Thus for the organization main thing is to develop the goal as without the goal the organization cannot be aligned to the desired results. The stakeholders are the main strength of the organization as it supports the organization to the great extent.

4. Analyze and assess the influence of specific external trends

PESTLE

Political Factors – The political environment of Australia is sound and certain that provides better opportunities for the retail businesses like Woolworths. The government of Australia focuses on trade agreements with other countries that also create better opportunities for business expansion. But at the same time, the competition policy by the Australian government to safeguard the interest of the small retailers causes limitations for Woolworths like retail businesses to set higher prices (Annual Report, 2015).

Economic Factors: However, the Australian economy has better GDP growth but recent fluctuations in economic conditions of the country in terms of weakening Australian dollar have affected the retail industry as well as the operational efficiency of Woolworths. Declining disposable income is also an issue that can affect the business of the firm due to declining purchasing power.

Social Factors: The consideration of social needs creates better opportunities for the businesses in Australia. Woolworths focuses on customers and social expectations that contribute to better business opportunities in the country (Shabanova et al., 2015).

Technological Factors: Australia provides sound technological infrastructure to the businesses to create better business opportunities. In relation to this, the emergence of advanced technologies has created better opportunities for the retail businesses to better control their supply chain and distribution network.  For instance, green technology is applied by Woolworths for refrigeration for the storage of the perishable products for a longer time (Dos Santos, 2011). But, the changes in technologies also raises the need of appointing highly skilled employees and spending more on training programs that increase financial burden.

Environmental Factors: It is important for the retail industry to focus on sustainability issues to protect the environment and fulfill the interests of society. The activities of petrol and wine making division in Woolworths have affected its brand image due to environmental issues that also affected its profits and performance in these divisions (Annual Report, 2015).

Legal Factors: The laws and legislation in Australia are significant for any business which operates in this country. Several laws like corporation act, competition act, consumer protection act, labour laws, etc. have a significant impact on the business operations of Woolworths. For instance, the carbon tax as the legal factor in Australia has made it mandatory for the retail businesses to focus on fair policy in business operations (Annual Report, 2015).

Power dynamics (changing power relationships) in the industry

Porter’s 5 forces model

This model is applied to determine power dynamics by evaluating power relationships in the industry. For Woolworths, Porter’s five forces can be as below:

Bargaining power of buyer: The bargaining power of buyers is high in the Australian supermarket because most of retailers provide homogenous products that can be differentiated based on discounts and offers. Woolworths provides quality products but it is lacking of competing with the discount retailers causing more bargaining power of customers. Switching costs are low that increase bargaining power of customers.

Bargaining power of suppliers: Woolworth’s sources from local organic farms like Bauer’s Organic Farm, Gibb Brothers Farm, Kalfresh Pty Ltd., etc. Bargaining power of suppliers is moderate in the Australian supermarket as Woolworths highly depends on local and limited suppliers, but due to having brand image, it is successful to reduce the bargaining power of suppliers (Annual Report, 2015).

Threats of Substitutes: The availability of substitutes in the local supermarket is moderate. There is moderate threat of substitutes for Woolworths in the Australian market. It is because Woolworths provide better quality that reduces the threats of large number of substitutes.

Threats of new Entrants: The barriers to new firms to enter the industry are low as this industry requires limited capital and high legal requirements. At the same time, costs on technology use also create difficulties for the new entrants to enter the industry. In addition, economies of scale and strong brand image of existing firms like Woolworths also reduce the threats of new entrants (Arli et al., 2013).

Rivalry among the Competitors: The rivalry among the competitors in the supermarket of Australia is high. Several brands like Woolworths, Wesfarmers (Coles) and Aldi are competing to each other based on price in terms of discounts and seasonal offers. These firms provide the same products including groceries, liquor, office supplies and hardware as Woolworths. Some firms also provide other product range like industrial safety, chemicals, and fertilizers. Woolworths also provides quality products at competitive prices that help to reduce competition in the market (Keith, 2012).

SWOT analysis

SWOT analysis for Woolworths is as below:

Strengths

˚          Market leader in Australian Retail Industry

˚          Wide product range

˚          Strong financial position (Woolworth, 2017)

˚          Better R&D and technologies

˚          Strong brand image

˚          Wide distribution network -More than 3500 stores across Australia and New Zealand (Woolworths Group, 2017)

˚          Effective supply chain (Arli et al., 2013)

˚          Growing customers base (more than 29 million)

Weaknesses

˚          Limited presence globally

˚          Increase in overhead cost

˚          Inability to reduce operational costs to compete with discount retailers

 

 

Opportunities

˚          Use of technologies in the supply chain management

˚          Better opportunities in Asian markets

˚          Improvement in consumer lifestyle

˚          Target health conscious consumers

˚          Use of technology in sales and marketing activities

Threats

˚          Fierce competition (Keith, 2012)

˚          Currency fluctuations in economy

˚          Rise in cost of non-food materials

˚          Increasing bargaining power of suppliers

˚          Strict government regulations affecting pricing policy (Shabanova et al., 2015).

 

Risks

For 2015, there was environmental risk for Woolworths. Its petrol, meat processing plants and winemaking businesses exposed to environmental liability for contamination. It could have an adverse effect on the operational results of the company, if no change was implemented. It could have damaged the brand image of the company because the people are becoming aware of environmental concerns and sustainability issues of the firms. If the firm does not adopt any change, it may cause a bad impact on the brand image of the firm and affect its revenues and market share in these divisions. If a new and improve strategy is applied to avoid such environmental risk by adopting better risk management plan (Annual Report, 2015). For this, company will focus on the quality management its products in these divisions to identify any contamination through this the firm can identify the root cause behind the risk and adapt better strategies to mitigate environmental risk. Apart from this, the firm needs to focus on the sustainability plan to avoid any impact of its operations on the environment (Jie, Parton & Chan, 2015).

Strategies to ensure that the internal and external analysis is consistent with the perspectives of other informed people

In order to determine the validity and reliability in respect to the other perspectives, the views and opinions of the management of the firm can be determined from the annual rpoert of the firm. From this, the views of management regarding the internal capabilities and external opportunities and threats can be verified. Apart from this, information can be reviewed from news papers online and published to check the same or different perspectives on the analysis. In addition, a primary study can be conducted with focus on interview and survey to know the views and opinions of the customers and management of the firm in relation to the internal and external environment of the company.

5. Strategic plan

 

Financial PerspectiveCustomer Perspective

 

ObjectivesGoals Measures ObjectivesGoals Measures
1.Increase the revenue in the global market

 

2. Decrease the overhead cost

To comes in the top companies on the basis of the revenue

To decrease overhead cost by 10%

 

To compare the financial statemnent with competitiors

 

To analyse the cost on next financial year

To deliver the best customer statsfaction in the terms of the qulaity and pricingAdopt concept of TQM and renew the pricing strategyEvaluate the compalint of customers

 

 

Internal Business PerspectiveInnovation and Learning Perspective

 

ObjectivesGoals Measures ObjectivesGoals Measures
To improve the efficiency in operation

 

To increase the customer base in the global market

 

Reduce the cost of operation to reduce pricing

 

To introduce new product to become point of attraction in the global marketDevelop the technology to get market share in the global marketTo measure time in devlivery of goods

 

 

Strategies recommended to Woolworth in order to overcome its threats and Weaknesses

In order to overcome the weaknesses it should expand its market globally and maintain its costs. It should follow all the rules and regulations implemented by the government in order to overcome various kinds of threats for Woolworth. Moreover, Woolworth can overcome the weaknesses with the help of strategy of sourcing or licensing of new product. For overcoming the weaknesses it should implement the investment, recruitment or training strategies. It should produce unique product for overcoming the weaknesses (Hitt, et al., 2012). It should also keep the price low and offer good quality products that would help in attracting the customers to the great extent. It should also implement innovative strategies for overcoming the weakness within the company. Hence, it should also focus in making changes in the quality of the product.

There are various recommendation given to Woolworth in the context of threat. Hence, the company can adopt various strategies such as proactive strategy in which the company should be remained prepared to face the threats if any in order to face the competitors. It should implement the strategy by developing customer loyalty program or it should increase certain barriers to entry for the competitors. Thus barriers to entry can be increased by forming strategic alliances with the suppliers of raw materials for restricting the entry of competitors. It would help in overcoming the threat faced by Woolworth. Furthermore, for overcoming the threat of currency fluctuations Woolworth should try to match the currencies which is sold or purchased. Traditional hedging strategy can be adopted in order to protect the business from future adverse currency movement (Wheelen and Hunger 2011). In order to reduce currency fluctuation in the economy it should establish an agreement if the company is dealing with more than one currency for global transactions. It should also set a baseline rate which includes upper and lower boundaries in the context of currency fluctuations. It should also coordinate with the finance team of the company. It should also be aware of certain surcharges. Moreover, in the context of rise in cost of non-food material threat Woolworth should implement low cost strategy in which it should provide the products at low cost with good quality. Woolworth also faces the threat of increase in bargaining power of suppliers. It should implement creating strategies like reduction in bargaining power of the suppliers (Wheelen et al., 2017).

6. Implement Strategic Plan

Communicating and implementing the unit’s strategy

It is significant part in the strategic management of the company. In order achieve the organisational goals and mission, Woolworth will implement the developed the strategies. In this, it will follow the different activities that will be helpful in the communication and implementing the unit’s strategy. Under this, company will establish the annual objective in order to reach at the vision and mission. It will help the company to short the unit’s strategy. The key people of the company also prepare the policies for execution of strategies. Under this, the developed strategies and goals will communicated in the organization. Along with this, under the next step, the company will allocate the required resources to the employees to make the plan successful. Furthermore, the different tasks and activities will be allocated in between the different employees according the management strategy and plan. At the same time, the management team will also develop the specific standard to monitors the performance of the strategic plan and suitable action will be taken (Ginter et al., 2018).

Communicate strategic plan to all relevant parties

In the success of the developed strategic plan, it is essential for the Woolworth that it will communicate developed strategies and goals with the different relevant parties and departments’ head. In this, the main parties are identified are head of the HR department, finance department, procurement department, research and development department and marketing (Steinbach et al., 2017). At the same time, department heads responsibility is that they will communicate strategies with their team member.

Review effectiveness of plan and consider methods for improving strategic planning processes

After the implementation of the strategic plan, the next process is to reviews the performance of the strategic plan. This process is also known as the monitoring the effectiveness of the plan that will be helpful to improve the strategic planning process of the Woolworths (Hill et al. 2014). In this, the company will take the help of the key performance indicator that is effective process to measure the performance of any plan in the business environment. Woolworths will use KPIs to evaluate their success at reaching targets.

Area of measurementKPIsTime
Increase in the revenue by global sales Increase by 10-15%In the one year
Number of the customer complaints Reduce by 40-50%In the six months
Delivering of the goods at store  In average 2 working daysIn the six months
To improve the efficiency in operationReduce the cost of operation by 10-15%In the one year
 

References

Annual Report (2015) Woolworths Group. [Online] Available at: https://www.woolworthsgroup.com.au/icms_docs/182381_Annual_Report_2015.pdf (Accessed: 14 February 2018)

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

Craig, T. & Campbell, D. (2012) Organisations and the Business Environment. UK: Routledge.

David, F. R. (2011) Strategic management: Concepts and cases. USA: Pearson/Prentice Hall.

Dos Santos, M. A. (2011) Minimizing the business impact on the natural environment: A case study of Woolworths South Africa. European Business Review23(4), pp.384-391.

Ginter, P.M., Duncan, J. and Swayne, L.E., (2018) The Strategic Management of Healthcare Organizations. John Wiley & Sons.

Hill, C.W., Jones, G.R. and Schilling, M.A. (2014) Strategic management: theory: an integrated approach. Cengage Learning.

Jie, F., Parton, K., & Chan, C. (2015). Australian beef supply chain integration: case studies of the two largest Australian supermarkets. International Journal of Supply Chain and Operations Resilience1(2), 121-138.

Keith, S. (2012) Coles, Woolworths and the local. Locale: The Australasian-Pacific Journal of Regional Food Studies, 2, pp. 47-81.

Shabanova, L. B., Ismagilova, G. N., Salimov, L. N. and Akhmadeev, M. G. (2015) PEST-Analysis and SWOT-Analysis as the most important tools to strengthen the competitive advantages of commercial enterprises. Mediterranean Journal of Social Sciences, 6(3), pp. 705.

Slack, N. (2015) Operations strategy. USA: John Wiley & Sons.

Steinbach, A.L., Holcomb, T.R., Holmes, R.M., Devers, C.E. and Cannella, A.A. (2017) Top management team incentive heterogeneity, strategic investment behavior, and performance: A contingency theory of incentive alignment. Strategic Management Journal, 38(8), pp.1701-1720.

Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., (2017) Strategic management and business policy.UK: pearson.

Woolworth (2017) About us.  [Online] Available at: http://www.woolworthsmuseum.co.uk/aboutwoolies.html (Accessed: 14th February, 2018)

Woolworth. (2017) [Online] Available at: https://www.woolworths.com.au/ (Accessed: 05-June, 2017).

Woolworths Group (2017) About Us. [Online] Available at: http://www.woolworthsgroup.com.au/page/about-us/our-approach/strategy-and-objectives/ (Accessed: 14 February 2018)

 

 

 

 

 

 

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