Analysis of the Environment of Woolworths-Free-Samples for Students

Question: Write a report on your chosen firm/organisation which examines the key trends and dimensions of the internal contexts in which both the strategy and the strategy process of the company are embedded. Answer: Introduction This section is briefly introducing the details of the key performance indicators which are useful in measuring the performance of any organization. The study is focused on one of the most reputed retail chain Woolworths which is located in Australia. It should be discussing on the analysis of the internal environment of Woolworths. The three key performance indicators which are evident in Woolworths would be the culture of Woolworths, brand image and profitability of the company. The company is developing an embedded and store led culture within the team and develops goals which are fulfilling the requirements of the customers. The customer claims reduced by 19 percent in the year 2017 and the Lost Time Injury Frequency rate has reduced down to 6.76 and the Total Injury Frequency Rate of 12.97 (woolworthsgroup.com.au, 2018).It is also seen that the company has the dedicated and diverse team which has been bringing the culture into play and the culture is aligned with the goals of the customers. The brand image of the company provides an indication of how much the company is liked by the customers which is the second KPI for Woolworths. The next performance indicator for Woolworths should be the high profitability and sales of the company. There has been the growth of around 3.7 percent from 2016. There is the growth of say 4.5 percent and 4.3 percent in Australia Food and Endeavour Drinks. There has been the gross profit margin of around 28.71 percent. It is seen that the sales for the year of $36.4 billion has been incare4sed 4.5 percent on the previous year while the comparable sales has been increased by 3.6 percent (woolworthsgroup.com.au, 2018).There has been the online sale grew by 15.8 percent. It is also seen that the sales for the year has been enhanced in hotels. Internal Environment AnalysisResources and Capabilities Woolworths is considered as one of the largest and reputed retail chain operating in Australia. The resources are very important in bringing sustainability to the business. There are basically two types of resources which include the tangible and the intangible resources. A tangible resource is the resource which can be felt or touched wand that indicates that the resource is physically available (Evans, Stonehouse Campbell, 2012). The intangible resource is the one which is not felt but it is significant in developing the core competencies for any organizations. The tangible resource for Woolworths could be that they have around 3000 stores across Australia and New Zealand and have the employees of around 185,000. Woolworths has the effective management and the human resources. They also have the well designed and well equipped machineries inside the stores so that they can be able to provide high quality services and customer satisfaction (Keupp, Palmi Gassmann, 2012). One of the intangible resources could be that Woolworths should be developing and delivering quality and value driven products and services to the customers. It is important that there is the need of developing the high quality products and services to be given to the customers with the enhanced employee engagement practices and right kind of motivation to be given to them so that they can become customer centric and hopefully they will be achieving the requirements of the customers on a daily basis as well (Lasserre, 2017). The next intangible resource which they have is basically the high brand equity and reputation for their excellent quality fresh foods and their strong relationship with the alliance and partnering organizations they have been collaborated with. Capabilities are defined as the resources when come together in the achievement of the organizational objectives. One such capability for Woolworths is to be delivering high quality products and services to the customers. The next could be the development of the good compensation packages and incentive systems for their employees working in the respective stores helps them to improve their performance. The next could be the wide range of products and services along with the huge volume of stores they have which helps in enhancing their capabilities. Core Competencies of the firm A core competency is defined as the capability of any firm which helps in developing competitive advantage for that firm. The wide variety of food products and services they deliver it to the customers adds a competitive advantage. The effective culture as well the huge volume of stores helps in reaching out millions of customers providing them immense satisfaction (ausfoodnews.com.au, 2018).The innovation they make for example petrol retailing. They have also vertically integrated some of their suppliers in reduce their competition in the market. VRIO Analysis The VRIO analysis is the analysis where there is the identification of the resources which has been segmented into different categories. This explains that if the resources which are identified can be integrated then only it creates competitive advantage. Value- The Company has its dedicated and high skilled and talented staffs who can deliver high quality services to the customers. Rarity- They basically relies on the capabilities which are valuable but they are common in other retail stores like the quality and innovative products and the skilled employees (Stead Stead, 2014). Imitation- Woolworths has been adopting the green refrigeration technology which has taken several years to adopt and this is quite costly to imitate for the competitors. Organization-The company has been exploited the resources quite successfully within the retail market of Australia. This will help them to exploit the competitive advantage they are enjoying it now. Value Chain Analysis The value chain analysis is the tool which is useful in creating value for the activities they are doing for holding a high position within the retail industry of Australia (Rothaermel, 2015). So the value chain analysis has been depicted below Inbound Logistics- They have their own distribution centers and this results in added advantage of procuring huge volumes and reduce the cost price (Hill, Jones Schilling, 2014). They should also be taking the advantage from the suppliers by providing the discounts. Operations- Woolworths has owned local farmers who can be able to provide fresh raw materials and this result in the development of fresh products with cost reduction to the customers. Outbound Logistics-There has been the application of the in store vendor quality management system to be implemented so that the freshness of the products and its quality could be maintained for a long period of time (Slack, 2015). Marketing and Sales- Woolworths has been using advertisements and the social media marketing as the tool for promoting the new products (Evans, Stonehouse Campbell, 2012). They also provide discounts, customer loyalty cards in order to increase their sales. Customer Service- The use of the trolley system inside the stores and the refund policies has been useful in providing high quality customer service resulting in high customer loyalty. Discussion on the culture of the firm There is a transformation to be made in the culture of Woolworths. After the new CEO has been appointed, the new CEO is sending the staffs to the boot camp before they start their career in the respective stores of Woolworths (mumbrella.com.au, 2018).They are paying quite heavy in order to make them motivated and they are also organizing meetings in head offices for the staffs to identify themselves. They have also provided good working conditions to work on. Strategic Issues Explaining the major strategic issues of Woolworths The major strategic issues for Woolworths could be the decline in the sales and profit margins for the shareholders of the company. It should also be the prices of the products they deliver it to the customers and fostering of growth within the retail market of Australia as there was increase in competitors in the market taking place for Woolworths. In the context of the sales decline and less profit margin for Woolworths, there is some of the statistical evidence which justifies the issue for this company. The company has 190,000 employees working currently and it is needed to be increased. There is around net loss of $973 million achieved at Woolworths. The profitability for Woolworths is $925 million which is down by 33 percent in the year 2016 (ausfoodnews.com.au 2018).They have only made a profit of $1.3 billion which is less than its competitors like Coles and Wesfarmers as well. This could be improved with improved quality of products to the customers as well as innovation in the promotion of the products as well. In the context of the prices for Woolworths, the company is altering its pricing policies and developing new pricing strategies in order to overcome the pricing issue. The pricing issue is basically making it difficult for Woolworths to be able to compete with the new and small retailers coming in this retail market (Killen et al., 2012). It is seen that there is the around $125 million or price reductions for the customers to be taken place from 2015 and this helps in enhancing the value proposition for the business (the conversation, 2018). They are also trying to match the in store prices of the products with the online stores. In the context of enhancing growth and efficiency of the company, it is useful that they have been trying to introduce lean retail management model where the waste is eliminated and he wastes are recycled or make it consumed by the animals so that there is no wastage of food products took place. There is reduction in the level of inventory to be taken place as well for Woolworths. Conclusion From the study it is evident that Woolworths has been reinventing and changing their business strategies in order to become much more competitive within the retail market of Australia. It is concluded that there is the development of the high quality products and its delivery at the right time will help in enhancing the customer satisfaction. It is also concluded that Woolworths has a sound working environment and fresh culture to be developed in order to meet the customer expectations. It concludes that they have the quality and talented staffs who can provide high quality services to the customers. References ausfoodnews.com.au (2018).Ausfoodnews.com.au. Retrieved 9 April 2018, from https://www.ausfoodnews.com.au/2015/05/06/woolworths-announces-new-strategies-to-win-over-grocery-shoppers-afn-reveals-full-detail.html Evans, N., Stonehouse, G., Campbell, D. (2012). 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