Woolworths is an Australian organization that operates in the retail area of business. The company operates more than 900 stores in Australia and has a large team of 115,000 employees in the distribution centres, the stores and the support offices. The organization is known in the industry for providing the customers with the highest level of services and wide range of products as well. Woolworths works closely with the various Australian farmers and growers so that they are able to ensure that best products are supplied to the consumers. Woolworths offers fresh vegetables and fruits that are sourced directly from the farmers to the customers in its stores. The organization has gained a position in the industry as one of the most innovative retailers. The company understands its consumers who look for the new and simpler ways to shop. Woolworths has also started its online operations which are helpful for the consumers to place orders from the comfort of their homes (Woolworths.com.au., 2018).
The report will be mainly based on the various organizational development activities that have performed by Woolworths and the issues that have been faced by the company. The changes that have been implemented in the organization will also be analysed in the report.
Woolworths was established in the year 1924 on the 5th of December. The founder of the company was Percy Christmas. The company has been showing immense growth in the Australian retail industry right from the time of its establishment. The company started growing its operations and forming a chain of its stores from the year 1927. The management did not start the business thinking of building a chain of stores. However, they were able to extend their operations in New Zealand in the year 1929 and opened around 16 stores all across Australia. The next phase of development and growth of Woolworths was related to the advertisement related operations that were conducted by the company (Alvesson & Sveningsson, 2015). The company started placing its advertisements in various new and improved tools that were introduced in the year 1937. The organization placed its advertisement on the radio which was a part of the new phase of development. Woolworths had started growing and the warehouse space of the organization was also increasing in the process. The company than opened its self-service stores in the year 1955 and further completely changed the shopping experience of the various loyal customers. The first self-service store of the company was located in Sydney. The organization further opened its dedicated stores only for food in the year 1957 (Bertram, Blas? & Fixsen, 2015). The stores mainly offered fresh fruits and vegetables to the various customers. The fast expansion of Woolworths led to the opening of the 300th store of the organization. The organization had experienced unexpected growth within just four years of its operations in the market from the year 1955 to 1959.
In the year 1960 Woolworths became the first retailer of the country to have nationwide operations. The organization had become a huge brand after the year 1960 and was finally successful in achieving its major objective that was related to provide value and quality to the various consumers. The company was further able to expand its operations and become the largest retailer of drinks in Australia. The organization started launching its own brands from the year 1973 which was named “Own brands”. The offerings of the products of Woolworths were improved further and were produced with the name of “Woolworths Select” (Bolden, 2016).
The development of Woolworths also consisted of many important acquisitions by the organization, which included the acquisition of Dick Smith Electronics in the year 1981, the acquisition of Safeway in the year 1985. The organization was able to extend its operations in many other areas of Australia within a short span of time which was the major development that was shown by Woolworths in the various years of its operations in the industry (C?ndido & Santos, 2015).
Changes made in the organization
The major goal of Woolworths has been to achieve the five major priorities which are,
- Building the team and culture of the customers and the stores.
- Generating momentum in sales of food that is sustainable in nature.
- Evolving the drinks related business so that more convenience and value can be provided to the customers.
- To empower the portfolio business and pursue the strategies so that shareholder values can be delivered.
- To become a lean retailer with the help of systems excellence and end-to-end process (Chumg et al., 2016).
The company has aimed at fulfilling these objectives by building a retail team listens to the concerns of the customers, the suppliers and the various members of the team. Woolworths has always aimed at providing the maximum levels of satisfaction to the customers and thee organization has put them at the highest priority as compared to the other aspects of organizational operations.
Woolworths has been fighting a serious price war with another major retail organization of Australia named Coles. The company had to make major changes in its pricing related policies to provide the best products to consumers at the least prices. In the year 2015 Woolworths announced new strategies which were aimed towards winning the trust of the consumers. The company formulated a three-year strategy to increase the number of customers related to Woolworths Food Group (Davidson, 2017). The strategy included the major steps like, increasing the share that the customers spend in buying food. This was done by achieving all the major objectives that were related to the improvement of aspects that are related to the shopping experience of the customers. The organization is placing the customers at the top of everything that they plan and do. The strategy is based on the lower prices of products related to food that are offered to the various customers. Woolworths aims at beating its major competitors with the help of their lower prices and providing similar quality products (Frank, Penuel & Krause, 2015). The online operations of Woolworths have also been a major change in their activities. The strategy of the company was focussed on three major principles which are,
- Improving the core offerings so that consumers of the company are put first.
- The innovative activities that are undertaken to meet the needs of the customers.
- Creation of the value of customers with the help of lean retail model.
Woolworths is focussed on creating a new value and pricing related strategy so that it is able to neutralise the impact of Aldi and Coles on its sales. The various measures include better ranging of products, targeting the customer offers and further using an improved and revised system of loyalty. The own products of the company have further played a major role in the competing with the other retail organizations in Australia. The strategy of Woolworths consisted of the rebalancing of the capital expenditure between the existing stores and the new stores of the organization (Goetsch & Davis, 2014).
Internal analysis of the organization using SWOT framework
Strengths – The company is a pioneer and one of the oldest retail trading organization in the market. Woolworths is the market leader in the retail industry of Australia. The leadership position of the organization has helped in exploiting the potential of the entire market in which it has its operations. The resources that are required for the successful operations of the company are available and are used to the fullest capability.
Weaknesses – The growth related strategy that has been formulated by Woolworths has been one of the major weakness that has been faced by the company. The external conditions of the company further affected the ability of Woolworths to dominate the Australian retail market (Haffar et al., 2017).
Opportunities – The retail industry of Australia has shown huge potential of growth and various factors that are related to computerisation, changes in the lifestyle of the consumers and advancements in the supply chain of the organizations have provided huge opportunities to Woolworths. The organization is also aiming at adopting the theory of multi-option retailing which helps in coping up with the changing needs of the various consumers.
Threats – The threats that are faced by Woolworths are mainly from the high levels of competition that are provided by major retail organizations like Coles. The prices of the products that are offered by Woolworths are also affected by the huge competition in the industry. The price control related factors by the government have also posed major threats to the organization (Hammer, 2015).
External analysis of the organization using PESTLE framework
Political factors – Woolworths is a recognisable name in the Australian retail industry, which mainly fulfils the needs of the customers with the help of different retail outlets. The political environment in the country further affects the performance of Woolworths and the prices that are offered to the consumers. The political condition of the countries has been able to influence the operations of the various retail organizations that operate in Australia. The Australian retail market is comparatively stable as it is a developed country. This helps Woolworths in carrying out its operations in a successful manner (Kuipers et al., 2014).
Economic factors – The different economic factors of the country and rates of unemployment have adverse effects on the profitability of retail organizations. This further affects the financial performance of the country which can lead lower amount of sales. The conditions of Woolworths have faced serious issues after the economic recession period that had occurred in the in the year 2008. The crisis in the financial environment has further affected the overall sales of the company. The retail industry of Australia has however maintained much more stability as compared to the other areas of the world, which supports Woolworths in operating in the environment profitably (Li, S., & Chen, 2014).
Social factors – The customers of Woolworths are considered to be the major source of the revenues that are earned by Woolworths. The social factors are thereby related to the needs and the demands of the customers who belong to the various parts of the society. The organization has also further introduced new methods related to the fulfilment of needs of the consumers.
Technological factors – The advancement in technologies have led to the usage of new and improved technologies by the organization for the purpose of improving the services that are provided to the customers. The new technologies have also helped in the better management of the inventory of the company. The self-service checkout related facility is another major change that has taken place in the technologies used by Woolworths (Niedderer et al., 2016).
Legal factors – The policies that are related to recruitment and taxation have also been a major part of the operations of Woolworths in the Australian retail market. The license related requirements of the company are important factors that affect the revenues.
Environmental factors – The ways by which the external environment is affected by the operations of Woolworths are a major part of the environmental factors. Woolworths has invested the various resources in the process of minimizing their carbon footprint on the environment (Nilsen, 2015).
Strategies used by the organization to implement changes
Woolworths has set many short term and long term goals to reach the objectives that have been set by them. The short term goals are mainly related to the products that are offered by Woolworths. The quality of the products and the prices are a part of the various short term goals of the organization. The improvements that can be made in the existing products of the company are also a part of the short term goals. The long-term goals of the organization are related to the social development and the focus that the organization has on the environmental needs. The customers are given highest priority by the company and the strategies are formulated based on the needs and demands of the customers. Woolworths has used various generic strategies for the purpose of achieving its goals (Petersen, Premchandran & Clayton, 2017). The organization has started focussing on the multi-retail business style as has been discussed earlier. The organization further differentiated itself and has undertaken environmental approaches towards the achievement of goals. The major changes that have been made in Woolworths are related to the pricing and the process of decision-making that is followed in the company. The company has been trying to formulate strong and effective strategies to compete with the major competitors in the retail industry (Prestwich & Kellar, 2014). The strategies have shown immense change in the years of its operations in the retail industry. The pricing policies have been altered and the company is now providing high quality products in lower prices to compete with the organizations like Coles. The decision-making process is being improved so that the major decisions can be taken within short periods of time (Waddell et al., 2016).
The internal growth related strategies of the company are also being changed so that Woolworths can retain its operations in the various markets in a profitable manner. The multiple locations of the stores of Woolworths have been a major reason behind the huge growth of the company within a short span of time. The organization has been immensely successful in penetrating in the new market areas and increase their revenues and sales in the process. The costs related to production of the company has been decreased by changing the technologies and methods that were being used previously (Soliman, 2017).
Role of the organizational structure in change
The hierarchical organizational structure is followed in Woolworths where many levels of management exist and the subordinates are answerable to the higher authorities for their activities. The decision-making process in the hierarchical organizational structure is quite slow as the decisions require the consent of various levels starting from the managers to the lower level employees. The structure of an organization affects the changes that are implemented in the various processes. The change management becomes quite difficult for organizations in which many hierarchical levels are present. This is a major issue that is faced by Woolworths in the industry when changes are implemented in the processes. The change management has therefore a complex process for Woolworths (Tam & Gray, 2016).
The report can be concluded by stating that Woolworths has been a successful organization in the Australian retail market and this has given the company the topmost position in the industry. However, the organization has gone through various changes in its years of operations to sustain its operations in the retail industry of Australia. Woolworths has made major strategic changes which have helped in the organization in gaining revenues in the highly competitive retail environment of Australia.
- Woolworths can aim at applying the method of market development to maintain its competitive position in the retail market of Australia. This is related to building the strategies based on its strengths and the skills of the employees.
- The internal growth strategy can also be recommended to Woolworths so that it can compete with other organizations based on the development of its products.
- The third strategy that can be implemented by Woolworths is related to innovation. The organization needs to search for fresh and new ideas that can be helpful in attracting more consumers. This will further help the company in increasing its customer base and increase its revenues.
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