Corporate Strategy

MCR008B
Class: 11:45am – 2:45pm
Topic: Big W
Lecturer: Dr Frank Alafaci

Group:
Naveen Kharl 1496024
Kazim Gilani 1496081
Hoang Tu Lam 1490243
Waqas Amin 1491696
 Overview

 This presentation is related to a popular shopping hub, Big-W

 It was found in 1964 in regional New South Wales
 This company is division of Woolworths
 Overview

 Big W has 182 stores across Australia with around 22,000 employees
 All types of products related to fashion and household are available
 David Walker is CEO of Big-w from 16 November 2016 up to now
 Source of the article

 A very popular news source news.com.au shows that Big w announced the
first three stores of 30 stores closing down due to some specific reasons
 This news source is number one Australian site
 It reaches more than 5.5 million Australians
 Source of the article

 This news website delivers the news in colour, life style, technology and
business
 Summary of the article

 Big W’s 180 stores lost millions as customers made their way to Kmart and
other fashion names as Zara and H&M
 Loss making stores are located in Auburn, Chullora and Fairfield
 27 of its other stores can be classified as dead shops too
 Summary of the article

 Cannibalizing sales: All stores were close to each other which led them
competing for the same customer
 Similarities: Stores shared similar characteristics as being retail or residential
hubs, such as Fairfield and Auburn
 Summary of the article

 Closing stores were located between the main profit zones of Big W
 Retail Doctor group agency did predict the downsizing
 As Australia is being analyzed as the third highest per capita intensity of store
 Summary of the article

 Stores are being reviewed on basis of their regulations and lease

requirements
 To continue improvements and save their brand name, Big W will offer
redeployment opportunities for the staff
 Adapt with the transformation in the retail industry
 How does the article illustrate the
event?
 Favourable for Big W
 Indicate the event from the company’s point of view
 No pointing out its failure
 No showing how it impacts and who will be affected
 Reasons for Big W’s loss

 Tough competition in the retail industry

 Changes in shopping habits and stagnant wage growth and increase in living
cost
 The real reason is the speed of the change in the industry
 Big W failed to respond to the change and lost its competitive advantage
 Changes after closure announcement

 Increase profit by cutting costs

 Approximately $370 million will be occurred due to the closure
 Massive sales up to 80%
 Only 3 of 30 stores were revealed to close
 It affects employees’ motivation
 Only promises to give alternatives employment options
 What happens next?

 Several circumstances may happen

 In positive circumstance, the profit will be increased
 In negative case, the company may move to online sale
 In the worst case, Big W may be sold
 Learning outcomes

 Demographic of a business is a key factors affecting its potential goals.

 To succeed and maintain a competitive edge innovation is a key ingredient.
 Transformation is required to be at par with the ever evolving circumstances.
 Learning outcomes

 Stakeholders are a prominent part of business structure.

 Their variability in financial circumstances should be accommodated
accordingly.
 Incident reflects the transformation retail industry is experiencing.
 Adoption of digital technology gives virtual presence which is more important.
 Future course & Recommendation

 Big W has tried to limit the damage.

 However, redeployment of staff, premises & inventory will require a concrete
plan.
 Incident has affected the reputation of the brand, its stake holders as well
e.g. staff, share holders etc.
 Future course & Recommendation

 Big W needs to invest more in CSR (corporate social responsibility) activities.

 Transformation to a digital yet innovative approach will help capture market.
 Invent better experience to attract more customers such as e.g. integrating
more activities within the outlet, different age group and gender based
preferences.
 References

 Brook, B 2019, ‘Smaller suburban centres could be in Big W firing line as

discounter announces first of 30 stores closures’, News.com.au, 19 July,
viewed on 29 October 2019,
https://www.news.com.au/finance/business/retail/smaller-suburban-centres-
could-be-in-big-w-firing-line-as-discounter-announces-first-of-30-store-
closures/news-story/c398718c53e5155986bf029b82116df1
 Mortimer, G 2019, ‘The trouble with Big W: don’t blame online for killing
discount department stores’, The Conversation, 3 April, viewed 29 October
2019, https://theconversation.com/the-trouble-with-big-w-dont-blame-online-
for-killing-discount-department-stores-114630
 Woolworths Group n.d., Portfolio Big W, viewed 11 November,
https://www.woolworthsgroup.com.au/page/about-us/our-brands/portfolio-
businesses/BIG_W