Woolworths Analysis

woolsworth analysis

One of the primary challenges a new or an old business has to face would be an effective understanding of the market basics and fundamentals. Without a general knowledge of it, none of the business marketing strategies will be useful in meeting their objectives. The primary purpose of market analysis is to gain this insight. In Woolworths analysis, there is an attempt for understanding specific issues like:

  • What are the market sizes, such as the value of goods? The number of products which have been sold?

  • The pace of the market growth rate and problems with its potential growth both are the victims of this severe issue.

  • Similarly, the pricing structure are also be categorized in this analysis. 

  • The factors are responsible for bringing on a market change such as any technological advancements, political and economic issues, etc.

  • The penetration of branding and the loyalty of the customers to that brand in the market.

  • The process of adjustments are made in the market according to the needs of individual customers.

Here are the two principal market analysis approaches which are generally used by different organizations for their business operations.

Woolworths Analysis: Background of Woolworths limited

During the year of 1924, Woolworths was founded and was called as “woolies” in various larger retail supermarkets in Australia. It supplied fresh foods and consumables to the Australian supermarkets with the use of high-end refrigeration techniques besides an ethical supply chain. About 200k employees are working in this food supply firm, and its headquarters are at Bella Vista, Australia. The primary services which are offered by this company are food and liquor. However, they also provide fuel and insurance services, and without Woolworths analysis, their trading process would not be possible.

A SWOT Analysis of Woolworths Limited

SWOT is a market analysis method which defines the Strength, weakness, opportunities, and threats of a company. Here is an analysis of Woolworth limited according to it.

Strength-

  • Woolworths is one of the trusted and old retail brands. There might be certain positive sides in woolworths  business that are responsible for bringing it into a better market status.

  • Presence in the majority of supermarket besides a larger market share, which will set the business apart from its competitors.

  • A massive selection of products and easier availability of services could be an advantage Woolworths might have over similar companies out there. For example, the higher quality of goods/services, better access to raw materials, effective manufacturing, etc.

Weakness-

  • A lower degree of influence in the international market might be the drawbacks of Woolworths which could affect its profitability. Besides that there could be a lot of reasons for these drawbacks.

  • Compromises in its local market share due to poor availability of suppliers. Therefore the organization should be very proactive in finding ways to improve its business over this disadvantage.

Opportunities-

  • A large market share in current economic setups are the chances in context to Woolworths, which might pave the way for much more significant market growth. These changes might come randomly in marketing scenarios, and the individuals who are associated with an organization or a business should be vigilant about grabbing these excellent opportunities. 

  • An improved data analysis in recent years for an enhanced experience

Threats-

  • A slower growth rate in Woolworths online business could bring on certain situations or moments which could arise and affect the business/organizations in a negative manner.

  • Competitor pressures that could arise from the factors like low-quality raw materials, the market price drops, competitor market influences, etc.

Woolworths Analysis - PESTLE method:

PESTLE analysis facilitates Woolworths group to analyse the macro environmental factors of the Australian market which make some impact on the business of this giant retail sector. 

Political factors-

  • Australia-New Zealand Closer Economic Relations trade agreement(ANZCERTA) is one of the major supportive political factors for Woolworths to be the only operational player in both the economies.

  • The domestic and foreign shareholders of Woolworths are very much secure in both Australia and New Zealand because of the political stability in both countries.

Economic factors-

  • Woolworths has a sound economic environment in both New Zealand and Australia.

  • The GDP per capita of Australia is (699) and for New Zealand is (966) which is a great economic advantage for Woolworths

Socio-cultural factors-

  • Woolworths acknowledges the importance of customer satisfaction for its profitability and sales.

  • There are various discounted prices in Woolworths retail stores which the company has been implementing for its store visitors since 2015.

  • Its newly set up loyalty program has earned Woolworths around 900,000 members for the organization.

Technological factors-

  • Woolworths retail stores have been implementing the use of RFID tags for keeping a track record of the stocks for its store visitors besides proper management of its store inventory.

  • Service-oriented architecture (SOA) is another new technology that Woolworths has been using in its business operations for the past few years.

Legal factors-

  • The three major segments of Woolworths' retail industry are the taxation policies, employee management and the recruitment of new employees.

  • The quality of food items in Woolworths retail stores are actively checked by professionals in accordance with the food regulations of Australia.

Environmental factors-

  • During 2012 Woolworths has introduced new policies for reducing the carbon footprint of its organization.

  • There are lots of steps which is taken by Woolworths for reducing natural resources wastage.

Woolworths Analysis: A Case Study

According to a market graph from 2015 to 2019 for Woolworths darwin holding limited, we can see the prices of its stocks in the year 2015 were below $4000. However, under just 3 months, a rise in stock prices was observed, which went above $8000. From mid-2015 till 2017, the stock prices remained between $8000 to $12000. After 2017 a dip in its stock prices is observed, which went below $8000 again and remained stable between $4000 to $8000 until 2019. 

Woolworths Analysis: Conclusion

In the above article, an approach has been made to analyze Woolworths limited with both SWOT and PESTLE market analysis methods. Based on those methods, certain points about the positive and negative aspects of Woolworths limited have been drawn some of which are supportive and some of which are not. The drawbacks are what which is needed to be worked upon by Woolworths for becoming a global leader in the retail field.

 

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