Woolworths

5168 Words Feb 18th, 2013 21 Pages
1. Executive Summary

The purpose of this report is to provide a strategic analysis of Woolworths in its Australian retailing and grocery industry. There are some external factors can be affected to Woolworths strategy. To be analyzed how these factors impact to Woolworths strategies we would use Porter forces five models as a framework for analysis. They are threats of new entrants and substitute products, rivalry among competing established competitors, threat of substitutes and bargaining power of Woolworths’ suppliers and customers.

This report also provides the company situation analysis which will be analyzed the internal environments of Woolworths. In this analysis, we will use SWOT analysis which includes the strengths,
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There are some reasons can be explained for this reason. Firstly, Woolworths have a high market share in the industry. In addition, its business size is very big which includes Australian overall market and some other foreign markets. A lot of selling stores around Australia are good example. Moreover, the expensive start-up costs are another barrier for new competitors. Finally, the high annual profit of Woolworths is hard for others to enter the retail and grocery industry in Australia.

3.2 Rivalry among established companies

The Australian retail and grocery industry has a high level of concentration ratio because the available of some major competitors competing in the industry such as Woolworths Ltd, Myer or Coles (Beaumont, 2004). It means Woolworths have a high concentration of market share in the Australian retail and grocery industry. In addition, the intensity of those strong competitors is boosting Woolworths Ltd have been continuously creating a competitive advantage. Using effective strategy such as low price, selling fresh food, and 24 hour delivery service, Woolworths Ltd and its subsidiaries such as Safeway, Dicksmith and so on are continuously competing with other rivals for a strong position in the industry (Porter, 1979).

3.3 Bargaining powers of buyers

Woolworth’s customers have a highly powerful bargaining power. The reason is most of Woolworths selling goods are from individual customers. They can

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