Running Head: WOOLWORTH’S MANAGEMENT

WOOLWORTH’S MANAGEMENT

Name of the Student

Name of the University

Author’s note
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Woolworth’s Management

Introduction

The business environment has become largely competitive due to the rapid process of

globalization. The world has indeed embraced the concept of a “borderless global sphere” as

major corporations are making their mark in the international arena today. Such is the case of

Woolworths Limited, which has manifested itself from having humble beginnings to

spreading over as a multimillion dollar store chain. Established in 1924, the retail chain has

successfully expanded into various other subsidiaries such as electronics, liquor, shopping

malls and hotel chains. The company with over 2 million workforces has its headquarters set

in Victoria and operates internationally in locations such as South Africa, Singapore, New

Zealand and Hong Kong. Owing to the current business environment, there are various

challenges that erupt while managing domestic as well as international divisions. Therefore,

the paper seeks to comprehensively present the company’s strategy while holistically

assessing its macro-environment concerning its domestic as well as international holdings.

Organizational Structure of Woolworths

Woolworths' organizational structure is based on a flat hierarchy, commanded by the

directors and the CEO at the summit, followed by numerous departments that aid the

company in its expansion (Lozano et al. 2015). Human Resources are one of the several

departments. The department of human resources and marketing, which is in charge of

recruiting and provides assistance to workers, as well as the Accounts department, which is

largely responsible for accounting and financial reporting money to cover the costs of the

company's resources. Also available is the IT department. It aids in the management of data

necessary for future study and performance of the business (Bourne, 2016). Employees are
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hired for a variety of positions inside the firm. For example, the sales department will work as

needed and will include all firms in the project for the sale of products.

Marketing Strategy

The brand's position in relation to its marketing plan is quite obvious. It first focused

on maximizing sales and minimizing product costs as a means of reaching out to its

customers. However, as time has passed, they have shifted the concentrate on customer

satisfaction and developed an interest in making consumer-driven products based on

consumer behavior, preferences, and insights Additionally, with developing a Marketing

strategy with the advent of e-commerce, consumers have shaped market orientation and have

the upper hand in determining the brand's fate (Nakandala and Lau, 2018).

It also follows a market expansion strategy ruled by the “bottom of the pyramid”

concept where it caters towards the economically stranded population by providing its

products in a fraction of a cost. However, this is to be noted that the product quality may be a

bit compromised and therefore providing it a much lower cost also brings profit towards the

corporation. Furthermore, it also has ties with several non-profits where it provides its

supplies that are unfit for sale. An action as such has also generated a lot of goodwill to the

company and can be amassed as a definitive marketing strategy.

Domestic and International Management Strategy

Woolworths due to its popularity and profitability has successfully expanded itself

over the geographical borders of Australia. However, management strategies for both these

domains cannot have much commonality due to the geographical and cultural factors that

sway the sale percent. In the case of Woolworths, the domestic business is centered in

Australia. Any business, in domestic grounds follows simpler management guidelines as they

are well versed with the territory, legislation and governance. Furthermore, they face very
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less variations concerning language and culture and this is a major plus point for them. While

operating a business in any part of the world, preliminary market research is of the essence

but having a home market will significantly have an added advantage of being well aware of

the trends and situations (Nakandala and Lau, 2018).

However, the international scenario comes riddled with challenges from every front.

For instance, consumer’s purchasing habits tends to stand different in some other nation as

compared to theirs. For instance, if the Australian branch of Woolworth’s has a demand for a

particular product, the same may not be popular among its international counterparts. It is

also tough to function in an area with a different language, culture and social aspects.

Additionally, the legislation of the area may be completely new than what the organization is

used to as well as the diverse workforce that follows too need to be managed. Woolworths in

Australia has been known to follow the theory X system of management where authoritarian

managers tend to micromanage each aspect of the work due to the lack of trust on their

employees and this in the future can result in the resistance from the staff (Fuchs et al., 2016).

Therefore, a multinational corporation such as Woolworth has to come up with a fresh

strategy to navigate the international market. This will be done to ensure that the new

population is well targeted and also the social trends that might govern the precious HRM.

Modern management theory that emphasizes on both the capital requirement as well as the

soft requirements of the employees such as that concerning their job satisfaction, they can

very well experience growth and a good reputation in the international market (Fuchs et al.,

2016). In addition to that, fluency with the economic factors is also required in such a

scenario and not having so may result in a mighty loss of the corporation. Competitors are

another aspect that can be found in plenty in the international market and thus strategies to

stay ahead are also to be developed.

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Macro-Economic Analysis of the Industry

In this section, it is noted how external factors such as socio-economic, legal, political

and competitive factors influence the position of the organization.

Economic Forces

Both the nations of Australia and New Zealand can be hailed as being economically

secure that preserves a good standard of living that in turn aids to enhance the retail company

sales. As per 2018 IMF World Economic Outlook, the continent of Australia was been

identified among the globe’s top 20th of GDP, indicating substantial development

possibilities for retail ventures. However, owing to Covid-19 a significant downturn in the

economic situation in Australia has badly damaged Woolworth's capacity as well as its

results, as there has been a drop in the economic activity in the Australian markets and

Woolworths also fell prey to the same. (Rogers et al., 2015). Due to such a situation, various

economic variables such as foreign exchange rate fluctuations and devaluation of the

Australian currency have substantially damaged Woolworths' business in both the domestic

as well as the international market.

Demographic forces

According to the ,Australian Bureau of Statistics, Australia has depicted a population

of roughly 26 million, with the majority of the population comprising in metropolitan cities

such as Brisbane, Sydney and Melbourne which implies that the future retail industry

development will be constrained to these areas (Expert, 2018) Additionally, annual growth

was four million people, with 63 percent attributed to foreign migration and just 37 percent to

natural birth. Owing to the substantial development concerning urbanization and increase in,

Woolworths has great growth possibilities. Australia has been regarded to feature amongthe

lowest minimum wages globally, but a forward tax structure ensures that the gap between
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affluent and poor is quite small. Australia's disposable personal income increased to 323419

AUD Millions in the first quarter of 2020, up from 319157 AUD Millions in the fourth

quarter of 2019. All of these variables work in Woolworth's advantage. However, the tax

implications on the corporation from foreign nations have also resulted in carving a heavy

dent in their profits.

Political, Regulatory, and Legal forces

Australia's economical strength and stability, together with the importance of grocery

products in the retail sector and the economy in its entire entirety, has aided Woolworths in

establishing a significant competitive presence across the country. With the assistance of the

unique trading relationship, Woolworths has established as one of the most trusted retail

businesses to distinct populations, thus meeting the needs of a broader consumer base.

Additionally, the political context has a significant impact on the nation’s retailing industry as

well as the organization’s profitability. For instance, the Australian government has

implemented a trade policy that prohibits the formation of huge retails businesses such as

Woolworths and Coles in order to significantly curtail competition (Methner et al., 2015). As

a result of these incumbent merchants' expanding market dominance, smaller enterprises have

been pushed to face the industry's success problem.

Social and Cultural Forces

One of the most prominent characteristics of Australia is its commitment to equality.

This implies they believe in equal opportunity for all, in contrast to their ancient motherland,

England, which adheres to a class structure. Australia's publicly financed health and

education systems are excellent examples. Australia lacks a cohesive standard national

culture as a result of previous immigration, and contemporary social tendencies among

consumers indicate that they choose more socially stable businesses. A quarter of Australia's

population was born abroad, and the other quarter boasts of having at least one non
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Australian parent. Nonetheless, Australia's symbolic dinner consisting of steaks or sausages

known as kanga bangers (Smith, 2018). Similarly, Woolworth has catered to various cultural

cuisines by providing a variety of high-quality frozen meals ranging from Asian to Indian and

Arabic to European. This is also one of the major reasons for its success in oriental spaces

such as Hong Kong. Furthermore, Australia has regarded itself as the producer of the world's

greatest dairy products, and boasts of housing the world's best farms. Additionally,

Australia's main culture needs to be sports. Australia is a sports fan's paradise. Woolworth's

has devoted a separate department to "health and fitness" in each of their stores across the

country.

Forces of the Natural Environment

According to the analysis, Woolworths is impacted by environmental concerns in

such a way that the company's fuel and winery sectors face greater risks from environmental

circumstances. While innovative in-store concepts appear to be a challenge, increasing

building rents are now an added expenditure to help retailers like Woolworths reduce

operational expenses. Additionally, Australia has been hit by a series of natural disasters this

year, including bushfires, flooding, and now an unforeseen virus dubbed Covid-19, which has

stunned the globe to say the least. Throughout the covid time, Australia saw huge bulk

buying in many locations, and as a result, Woolworths benefitted significantly from the crisis.

Technological Factors

Woolworths has benefited significantly from technology, as seen by the fact that

Woolworths contemplated implementing green cooling technology (Woolworth.com.au,

2020). As a result, perishable products can be stored for an extended length of time. The

growth of Australia's economy has also benefited from technological advancements, since it

is now one of the world's biggest markets for imports and exports. That is why Woolworth

has offered such a diverse selection of alternatives in terms of customer preferences

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(McDonald, 2018). Woolworths has enhanced its innovation image by consistently creating

new technology to enhance customer service and maintain a consistent level of product

quality, for instance owing to a substantial consumer base Woolworths has installed self-

checkout equipment in all of its stores in both its national as well as international dimensions.

Conclusion

The research of the external market environment circumstances affecting the

Australian retail sector, and in particular, Woolworths, revealed that such external industry

conditions had a significant impact on Woolworths' strategy and operations. They have, in

turn, influenced Woolworths' approach for successfully operating its commercial activities.

The external environment has impacted the necessity for innovation to keep up with the ever-

changing social trends among customers.

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