WOOLWORTH MARKET ANSLYSIS

PREPARED BY

GURPREET KAUR : 124085

MANJINDER SINGH: 124730

BUS 106 MARKETING PRINCIPLES

24 May2016
Executive Summary

The reason for this report is to give a key business sector investigation of Woolworths in its
Australian retailing and basic supply industry. There are some outside variables can be
influenced to Woolworths technique. To be investigated how these components effect to
Woolworths techniques we would utilize Porter powers five models as a structure for
examination. They are dangers of new contestants and substitute items, contention among
contending built up contenders, risk of substitutes and dealing force of Woolworths' suppliers
and clients.

This report additionally gives the organization circumstance investigation which will be
dissected the inward situations of Woolworths. In this investigation, we will utilize SWOT
examination which incorporates the qualities, shortcomings, opportunities, and dangers
Woolworths has. Woolworths' extent of operations, size of business is additionally one of the
interior examination Woolworths needs to dissect so as to snatch opportunities and dodge
dangers. Furthermore, it is additionally given a brief investigation of Woolworths current
methodology to reaction their rival's systems.

This report additionally gives a few suggestions to Woolworths with the goal it should stay
focused in its retailing industry, for example, building up steadfastness programs for its
clients and dealing with its productivity to manage its center skills for its long haul
achievement. It additionally give a few suggestions on growing new methodologies for its
new and existing items and markets.

At long last, breaking down the monetary execution and partner investigation by utilizing
diagrams and quantitative information have been utilized to bolster the report. The real
discovering this examination is demonstrating the stable money related states of Woolworths
and also the premiums of partners. , It implies that Woolworths have a decent economy
condition taking into account its money related position, so it brought on to the formal for its
partners.
Table of contents

Introduction & Background

Industry Overview

Environmental Analysis

 External Analysis

 Internal Analysis

Situational Analysis

SWOT ANALYSIS

Competitive Environment Analysis

Portfolio Matrix Analysis

Product/Market Strategy Recommendation

Conclusion

Table of figures

Table 2: BCG Matrix

Table 3: Ansoff Matrix

Introduction & Background

Since Woolworths' first store opened up in Sydney in 1924, it has a gigantic development and
turn into the pioneer family unit grocery store in Australia. Woolworths Home brand gives a
wild scope of basic need items over its retail locations in various areas. In 2012, Woolworths'
deals totalled some $56.7 billion in new nourishment, alcohol; stimulation, hardware, and
home things. Woolworths' showcasing methodology goes for give more prominent
assortment item decisions and shabby cost to their clients. Its long haul advertising
arrangement is to keep on developing multi-alternative retailing and online deals
(Woolworth, 2012). This report goes for the advertising methodologies of Woolworths
concentrating on the information of its circumstance in Australia including showcasing, item,
appropriation, contender, and full scale ecological circumstance; and through PESTELS and
SWOT investigation strategy to distinguish Woolworths' significant qualities, shortcomings,
opportunities, and treats and to highlight the rising issues Woolworths confronting. A finish
of Woolworths' advertising circumstance and a few proposals are given toward the end of the
report.

Industry Overview

The essential capacity of the general store industry is to go about as a middle person for
makers, and to give administrations to supplement its deals. The business in Australia has
encountered genuine development in income for each of the previous 4 years, with
development in 2008/09 being 4.1%, taking aggregate industry income to $68,500 million
(IBIS, 2009). Industry GDP development has likewise been solid the previous 5 years,
coming full circle in development of 4.4% a year ago to reach $7,850 million. There are right
now 3,760 undertakings working 4,340 foundations crosswise over Australia. The significant
players in the business incorporate (in no specific succession or request); Coles, Woolworths,
ALDI, CostCo, IGA, Foodland, SPAR Australia, Foodworks and Franklins.
Income development rate for Australian general store industry (Ibis World, 2009) The central
basic need retailer of this report is Woolworths1, particularly, its sustenance and retail basic
need business. Woolworths work 802 stores crosswise over Australia2, has taken its
aggregate deals to $49.595 billion in 2008/09, an ascent of $3.4 billion (or 7.5%), and now
controls around 42.0% of the business. Thus, Woolworths is the business sector pioneer, with
its closest rival, Coles controlling 23% of the business sector (Business Day, 2009).
Nonetheless, with major ecological changes coming soon it is begging to be proven wrong if
Woolworths can keep up such great numbers in future.

Environmental Analysis

With a specific end goal to succeed in its retailing industry, Woolworths need to investigate
and comprehend its outside industry environment. Sufficiently seeing about the outside
environment is critical for the accomplishment in upper hand of Woolworths. For this
situation, examining and comprehension of Woolworths' outside surroundings, coordinated
with the examination of Woolworths' inward surroundings will permit Woolworths to make
and build up its key arranging and activities to get the best result in piece of the overall
industry fight with different adversaries. At long last, outer data will likewise permit
Woolworths to adjust and change as needs be to its encompassing so as to stay aggressive.

 External Analysis

Outer Environment Analysis External environment is particularly vital as we can't or ought

not create systems in a vacuum. The methodologies must be receptive to the outside business
environment; generally the firm could turn into the most proficient maker of out of date
things which have no quality in business sector. Here we have clarified the outer environment
of Woolworth Limited.

• Political/Legal Environment: Government directly affects the general store industry

concerning administering exchanging hours, and through the observing and control elements
of the Australian rivalry and purchasers commissions (ACCC), the region government, the
exchange rehearses act (TPA) and the Foreign Investment Review Board (FIRB)

• Technological Environment: Woolworth was embraced another innovation. It was

the principal significant retailer to subscribe to GEMMnet (Global Electronic Marketing and
Merchandising Network) in 1994. It likewise contributed to enhance its inventory network
and conveyance framework which has huge effect in cost investment funds. It additionally
expanded the internet shopping offices and created organization site, which gave a
Woolworths a first mover‟s advantage.

• Global Segment: Woolworths has extended its business operation in New Zealand
and India to manage its development in retail industry and profit by its business sector
qualities.

• Economic Segment: The moderate development and instability in the Australian

organization as of late represents a risk for the retail players, as their development might be
stagnant in future if the circumstance wins for long. The developing unemployment rate,
conceivable expansion in fuel costs and wages are additionally a matter of extraordinary
sympathy toward the members in the business.

• Demographic Segment: Australia‟s populace was 21 million in 2008 and there is a

blend of ethnic and religious gatherings because of its migration arrangement. In Australia
those beyond 65 12% years old constitute around 12% of the populace and the estimate is a
25% development by 2051. The 85+ gathering is encountering the quickest development rate;
with the quantity of individuals in this age bunch anticipated that would verging on fourfold
to roughly 5% in 2051.

• Socio Cultural Segment: Changing social concerns, states of mind and ways of life
have brought about emotional changes in the general store industry in Australia. Individuals
are particularly worry about wellbeing and heftiness now a day. Consequently there is an
interest for low fat nourishments, simple to cook sustenance’s, natural and GM free
nourishments. The support of ladies in workforces has additionally expanded in late time.

 Internal Analysis
Interior environment examination is distinguished as dissecting the organizations' quality and
shortcoming in view of their accessible assets and abilities to facilitate assets for profitable
and powerful utilize (Hanson et al. 2005). Here, Woolworths' upper hand by utilizing assets
and capacities has been connected successfully.

Toward the end of the 2012 budgetary year, Woolworths worked 3,329 stores crosswise over
Australia and New Zealand, and utilized 195,206 individuals. It likewise has been a standout
amongst the most trusted brands in retailing industry. Woolworths discovered their center
skills by utilizing more experienced representatives, more in-store administrations and more
values for clients, as opposed to their real rivals.

More experienced staff utilized is the primary Woolworths' assets and capacities.
Woolworths Supermarket, for instance, has more effective laborers contrasted with its real
rival Coles. Rather than utilizing youthful specialists as Coles, the organization likes to utilize
moderately aged experience laborers and spotlights on preparing and creating workers. In
2011, $60 million was put resources into learning and advancement activities over the
association. Woolworths likewise has its perspective that "retailing is an exceptionally
engaged business which is the reason sourcing the best ability from Australia and the world is
critical to its prosperity.

In addition, in-store administrations are incredibly engaged in Woolworths' system need.

Various in-store administrations have been given to the clients, for instance, conveyance
administration for overwhelming items or numerous buys in one day with a moderate cost,
furthermore in-store butchers to get ready and pack clients' picked crisp meats at Safeway
Supermarket. One of Woolworths' new sustenance activities was to extend the new in-store
sushi kitchens to cook for progressively assorted tastes.

Situational Analysis

 Size and Scope of Operation

Woolworths constrained is the second biggest retailer in Australia which have essential
exercises in Supermarkets and Liquor. Basic need speaks to 85.6 percent of Woolworth's
business. Woolworths Ltd has yearly offers of $38 billion. Woolworths' significant brands are
as per the following: Woolworth's general store, Safeway, Metro, Big W, Dick Smiths
Electronics and Dan Murphy's. In addition, grocery stores are likewise worked in New
Zealand

 Target and Strategy

Woolworth's fundamental procedures are to build proficiency and be financially savvy. To

accomplish this Woolworths has been utilizing a consistently low value procedure

Woolworths' procedure is to offer clients low costs constantly, not simply deal specials. The
consistently low costs technique addresses this, and endeavors to offer clients regular lower
costs through value decreases on all items. For Woolworths Every-day lower costs
methodology to convey as it guarantees to client, while additionally making a generous
benefit from value cutting, a regular lower cost technique must be set up.

SWOT ANALYSIS
 Strengths

Woolworths has the upside of having the biggest percent of piece of the overall industry in
the Australian retail and crisp sustenance basic supply industry. Woolworths is a capable
retail mark and has a notoriety of low costs, accommodation, nature of administration,
extensive variety of items and in addition crisp sustenance

As per the Woolworths 2010 yearly report, Woolworths has more than 3000 stores general
stores and serve million clients in Australia and New Zealand. Woolworths is accessible in
verging on each significant metropolitan strip mall in Australia. Furthermore, countless make
a versatility, comfort and availability for clients.

 Weaknesses

Woolworths Ltd is exceptionally mainstream in Australia and New Zealand. It makes a high
upper hand for Woolworths when contrasted and different rivals in Australian and New
Zealand market (Datamonitor, 2007, p. 15). In the event that Woolworths need to have more
achievement, they need to open more stores in other new markets like Asian nations. In any
case, this is one of Woolworths' shortcomings. At the point when contrasted Woolworths and
other capable global contenders, for example, Wal-Mart, which are accessible in Asia,
Europe, US, Canada etc, Woolworths does not have any opportunity to contend unless it
additionally grow universally.
With the fast development of innovation, particularly is the Internet, Woolworths have
presented the Woolworths' Internet store, (e-business). In any case, it promptly brought about
to the decrease of offers in stores, particularly at Christmas.

Also, Woolworths offers numerous comparative items under one rooftop which may make it
harder for Woolworths to separate its "crisp" or "select" brands. Woolworth's size may
introduce potential shortcomings because of the colossal range of control.

 Opportunities

Woolworths is becoming quickly in the Australian retail and staple industry. They are
moving into new markets fragments inside Australia and also global markets, for example,
New Zealand and Asia. Woolworths are continually taking a gander at blending or shaping
collusions with other worldwide associations for instance wow joint endeavor with the Tata
bunch in India (Datamonitor, 2007, p. 16).

 Threats

Woolworths encounters continuous rivalry dangers from other significant retailers, for
example, Myer or Coles. Keeping in mind the end goal to reaction to Woolworths' ordinary
low value procedure, Coles have presented the cost rewind technique. What's more, with the
goal to extend its business to other new markets like India, Woolworths will be confronted
with the high rivalry with effectively developing contenders, for example, Wal-Mart
(Datamonitor, 2007, p. 17).

Offering merchandise generally utilizing the Internet have a high rivalry. Woolworths have
an online store, however it doesn't offer everything in the shops. What's more, the items are
very costly and postage and bundling is far higher valued over different stores. Accordingly,
clients like to buy at other less expensive stores.

Competitive Environment Analysis

It is essential for Woolworths to comprehend and break down the impact of outside
environment on its benefit and accomplishment of business systems. Creators, for instance,
Hanson et al (2005) and Robbins, Bergan, Stagg and Coulter (2003), agreed that not just
outer components affect altogether on an association's business execution, however finishing
corporate vital is likewise influenced. Together with breaking down Woolworths' outer
surroundings, for this situation, the information of interior viewpoints will empower
Woolworths to enhance their present methodologies and to transform its key mission into
powerful activities. Also, recognizing its position in retailing industry permit Woolworths to
adjust and utilize their upper hands keeping in mind the end goal to succeed. Outer
environment is broken into two levels, including general impact elements called full scale
environment and the business environment which impacts outside the organization limits

The report will just assess Woolworths' industry-surroundings by utilizing Porter's five
powers investigation, including bartering force of suppliers, dealing force of purchasers, risk
of new participants, industry substitutes, and contention among contenders. The organization
ought to concentrate on actualizing their technique taking into account the five power
investigation.

 Bargaining power of suppliers

As indicated by Porter (1979), the higher vital suppliers are, the more grounded they are.
Consequently, Woolworths' business, especially Safeway Supermarkets, have their low
reliance on the suppliers, which means the feeble haggling force of suppliers. The
fundamental reason is the extensive measure of retailing piece of the overall industry in
Australia and New Zealand and the gigantic number of items being sold to the business.

 Bargaining power of customers

The greater part of Woolworths' clients are singular purchasers who have truly solid dealing
power. Miranda, Konya and Havrilla (2005) specified that solid force clients empower to
compel the organization diminishing the cost as the attribution of acquiring at the store. To
meet to client needs, conveying low-evaluated items is one of Woolworths' significant
systems.

 Threat of new retailers

The risk of new contestants for Woolworths is considered not altogether in view of a few
reasons. Firstly, setting up the business with countless and perfection sufficiently quality to
contrast and the association and its rivals, for example, Coles, needs a great deal of measure
of start-up capital, for altered offices, as well as for working the business. Moreover,
Woolworths and its current rivals are overwhelming players with variable gets to
appropriation diverts and trusted brands in retailing industry. Conceivable new contestants
need to confront with the dangers of losing their venture furthermore the high focused in the
business.

 Threat of substitute products and services

In term of industry contention, Woolworths' organizations need to confront the high rivalry,
especially Woolworths Supermarket or Dick Smith. Substitute items are offered to the greater
part of the Australian significant markets, so thus, the grocery store ought to think of
inventive and aggressive techniques to pull in their clients and assemble brand notoriety. An
aggressive value methodology, as Hill et al. said (2007), is the most imperative variable in
retailing industry. Their rival Coles additionally gave the rewind value system to customers.
To finish up, there is a high risk for Woolworths' organizations in term of substitute items and
administrations.

 Rivalry among competitors

The nearness of some solid rivals in Australia retail and basic need industry, for example,
Myer or Coles is liable to restrain the Woolworths' piece of the pie and contribute the
abnormal state of fixation. The power of those contenders is constraining the organization
constantly making focused and successful methodologies with a specific end goal to separate
themselves from contenders.

Portfolio Matrix Analysis

The Boston Consulting gathering's item portfolio network (BCG) is intended to help with
long haul vital arranging, to help a business consider development opportunities by
evaluating its arrangement of items to choose where to contribute, to suspend or create items.

The Matrix is partitioned into 4 quadrants inferred on business sector development and
relative piece of the overall industry, as appeared in the chart underneath in Appendix table 2

 1. Dogs: These are products with low growth or market share.

 2. Question marks or Problem Child: Products in high growth markets with low
market share.
 3. Stars: Products in high growth markets with high market share.
  4. Cash cows: Products in low growth markets with high market share

According to BCG matrix, Woolworth is classified as a STAR – Due to relatively high

market share and with a new surge in the market growth.

Woolworths was at their top in 1960's and they were the main organization having enormous
chains of stores in retail industry. Woolworths finished century and turn out to be the star of
the business. Business sector and business development rate chart was on its top in 1990's,
piece of the pie was even high and the stars of the past was ended up being the money
bovines and organization having the high turnover and income. Their business sector position
was inconclusive without any rivals in the business. In any case, today Woolworths is making
new arrangements and have come into business with new methodology to open couple of new
shops with various thoughts and they have gone into organization with re-propelling of the
organization as an online retailer with new product offerings which better addresses client
issues and they can without much of a stretch get to the business sector.

Product/Market Strategy Recommendation

The Ansoff item/advertise lattice is an instrument that helps organizations chooses their item
and business sector development procedure.

Ansoff's item/showcase grid proposes that a business' endeavors to develop rely on upon
whether it advertises new or existing items in new or existing markets.

The conventional four box lattice or grid Ansoff model is given in informative supplement
table 3

Ansoff's Growth Model

 Market Penetration

'The activity of expanding a current item's piece of the pie or new item prologue to get piece
of the overall industry by volume rebates, publicizing, lower costs, or packaging as a system

Woolworths Everyday Rewards Cards Extra Saver - Members get select rebates on items
Fuel Savings - For each $30 spent at Woolworths, individuals get 4c off each liter of fuel

Big W, BWS and Cellarmasters additionally incorporated into card

 Implement new rewards for loyal customers

 Differentiate from competitors
 Increase advertising efforts to communicate new offers
 Improve awareness and creates opportunity for customers
 Secure new celebrity endorsement and/or create new strategy through celebrity
endorsement

Conclusion

The report is an investigation about the components making accomplishment for Woolworths
in the Australia retail and basic supply industry. It demonstrates that Woolworths is one of
the top brand names in the Australia, and now is more prominent in different nations. The
initial segments of report are given a brief examination about the focused circumstance of
Woolworths in the business. Utilizing Porter's five strengths model as the system of the
examination have demonstrated that Woolworths have more upper hands than different rivals
in the business. Another area is accompanying the present circumstance investigation of
Woolworths. Inspite of confronting with more difficulties from different rivals in the
business, Woolworths ought to proceed with the present store picture as it meets the present
client's pattern. It ought to keep on supplying more quality products with the best cost so as to
make more clients appeal. Also, advancement and improvement of store structure ought to be
engaged. Additionally, comprehension of contender's methodologies and foresee moves of
countering keeping in mind the end goal to reaction their procedures is critical for
Woolworths.
Appendix

Table 3: Ansoff Matrix for Woolworth (Lancaster and Reynolds, 2004, pg141)
Reference List

 Ibis World, (2009), Supermarkets and Other Grocery Stores in Australia - Industry
Report [online], Retrieved 14 August, 2009, from HYPERLINK
"http://www.ibisworld.com.au.ezp.lib.unimelb.edu.au/industry/default.aspx?indid=183
4"
http://www.ibisworld.com.au.ezp.lib.unimelb.edu.au/industry/default.aspx?indid=1834
 Business Day. (22 July, 2009). Woolworths Reports Sales Growth of 7.5%. Retrieved
20 August, 2009, from www.smh.com.au: http://news.smh.com.au/breaking-news-
business/woolworths-reports-sales-growth-of-75-20090722-dslu.html
 Woolworths (2012), Annual Report,Retrieved from:
http://woolworthslimited.com.au/CRReport/2012/ceos-statement.html
 Hanson, D 2005, Strategic Management: Competitiveness & Globalisation, 3rd edn,
Cengage Learning Australia, South Melbourne.
 Woolworths, 2010, Woolworth annual report 2010, <
http://thomson.mobular.net/thomson/7/3022/4355/ >
 Datamonitor, 2007, “Company Profile”, Woolworths Limited, 23 March, pp. 15-17.
 Porter, M.E., 1979, ‘How competitive forces shape strategy’, Harvard Business
Review, Vol. 57, p. 137.
 Miranda, M.J., Konya, L. & Havrila, I., 2005 , ‘Shoppers’ satisfaction levels are not
the only key to store loyalty’, Marketing Intelligence & Planning, Vol. 23, p. 220.
 Hill, CWL. ,Jones, G.R. , Galvin, P. & Haidar, A. ,2007, “Strategic Management: An
Integrated Approach”, 2th edition, John Wiley & Sons Ltd, Queensland, Australia, p.
64
 Lancaster, G. & Reynolds, P., (2004), Marketing, New York, Palgrave Macmillan
OTHER READINGS

 Woolworths Limited, 2010, ‘Corporate Responsibility Report 2010

 Woolworths, 2010, Woolworth annual financial report
 Q & Majumder , N. A.2011. Woolworths Limited: Retail Leader in Australia. Cases in
Business and Management. 2nd ed: Tilde University press, Victoria, Australia.
 http://www.woolworthslimited.com.au
 Porter, M.E. 1996. What is strategy? Harvard Business Review, 74, 61-78
 Thompson, A.A, Strickland, AJ & Gamble, J.E. (2010). Crafting and Executive
strategy: The Quest for Competitive Advantage, 17th edition, McGraw-Hill/ Irwin,
New York.