Woolworths Limited is a major Australian company with extensive retail interest throughout

Australia and New Zealand. It is the largest retail company in Australia and New Zealand by market
capitalisation and sales and the largest food retailer in Australia,[1] and the second largest in New
Zealand.[2] In addition, Woolworths Limited is the largest takeaway liquor retailer in Australia,[3] the
largest hotel and gaming poker machine operator in Australia,[3] and was the 19th largest retailer in
the world in 2008.

Woolworths Australia is the largest supermarket chain in Australia. Australias Fresh Food
People is Woolworthss well-known slogan throughout Australia. Woolworths Australia is own
by Woolworth Limited. It has been launching in Australia more than 80 years and focusing on
providing quality products and services to its costumers by using different product promotions,
pricing strategies, and human resource management strategies. Coles Supermarket is the major
rival of Woolworths Supermarket in Australia. The big two supermarkets in Australia have
deep influencing consequences on food production and retail at the local level. As Australian
supermarket is in the growth stage in product life cycle, Woolworths Supermarket has to
evaluate new strategy to maintain its marketing leadership position, such as improve its logical
and costumer service efficiency by technology and innovation development. This report provides
a qualitative and quantitative analysis of Woolworths supermarket contemporary condition and
forecast its performance in Australia in the future with some recommendations.

1.0 Introduction
Since Woolworths first store opened up in Sydney in 1924, it has a huge growth and becomethe
leader household supermarket in Australia. Woolworths Home brand provides a wild range of
grocery products across its retail stores in different sections. In 2012, Woolworths sales totaled
some $56.7 billion in fresh food, liquor, entertainment, electronics, and home items (see
Appendix 1 for financial information).Woolworths marketing strategy aims at provide greater
variety product choices and cheap price to their costumers. Its long-term marketing plan is to
continue to develop multi-option retailing and online sales (Woolworth, 2012). This report aims
at the marketing strategies of Woolworths focusing on the data of its situation in Australia
including marketing, product, distribution, competitor, and macro environmental situation; and
through PESTELS and SWOT analysis method to identify Woolworths major strengths,
weaknesses, opportunities, and treats and to highlight the emerging issues Woolworths facing. A
conclusion of Woolworths marketing situation and some suggestions are provided at the end of
the report.

2.0 Product-line Overview

Woolworths HQ in New South Wales Australia and operate as a retailer through supermarkets,
petrol stations, common merchandise stores, liquor stores, and hotel serious. The retail products
generally comprise fresh food, grocery, beverage, home items, electronic products, and
petroleum. Currently there are 3,329 retail stores under different banners such as Woolworths
Fresh Food, BIG W, BWS, Dick Smith, Countdown, and Dan Murphy. The company mainly
focuses on Australian and New Zealand market, but also has develop its subsidiaries in Hong
Kong, China, Africa, and India (Woolworths, 2012).

3.0 The Market Situation

3.1 Target market and consumers
Woolworths domestic market is basisindifferent Australian regions. Inapproximately 830 stores,
there are at least 14 million customers shopping in the stores every week.The product positioning
of Woolworths is providing wild range of choices of fresh food, grocery, liquor, general
merchandise and other varieties. Fresh Food and liquor is the largest driver of the Woolworths
business and makes up approximately 85 percent of the companys revenue. Woolworths works
with grower farms in Australia to ensure the quality of their products on shelves. The sales
volume regards to different regions see Appendix 2.
Figure 1: Woolworths General branding strategies

Souse: Woolworths annual report (2012)

Loyalty programs have long been used by general retailers and grocery retailers alike both to
increase customer retention and also for the valuable customer insights that can be gleaned from
loyalty program data. Despite some consumer skepticism regarding the value of loyalty
programs, membership and the number of programs have grown and remain extremely relevant
in Australia. Woolworths Total Rewards program is estimated to have almost 6 million
members.
3.2 The size and growth of target market
In the last 80 years, Woolworths has grown from a single grocery store to the most recognized
supermarket brands with stores across most of metropolitans in both Australia and New Zealand.
Its total employees are 195,206 by the end of 2012, and its sales reached $56.7 billion in 2012,
EBIT increased to 3.1% to $3,377 billion compared to 2011, direct economic contribution $6.6
billion in wages and benefits for employees, $2.1 billion in taxes to government, $36.6 million
investment in local communities (GlobalData, 2012). In addition, its average customer served
weekly is 28%, net profit after tax increased to $ 2,200 million, indirect economic contribution
729,900 full-time equivalent jobs, contributes to Australian GDP $108 billion
(GlobalData).Since 1993, Woolworths has been listed on the Australian stock exchange with
shareholders 416,638,earnings per share increased to $1.79. Its Global-retailingranking is at 18th
in global retailing, which is the highest ranking of Australian retailer.
Woolworths major competitors
The major competitor of Woolworths is Coles owned by Wesfarmers Group in Australian
supermarket industry. Estimations are that Coles has 37% of the Australian market share while
Woolworths holds of which 43% (GlobalData, 2012)

Objective
The objective of the Wool Worth Retail Company is to answer the following questions with a
short internal and external environment analysis.
a. Identify the main characteristics of the industry in which Woolworths operates.
b. What is a business model? Critically examine the principal features of Woolworths
business model.

c. Which important competencies did Woolworths use to add value to its strategic
management practices to ensure its sustained growth?

External environment analysis

It is important for Woolworths to understand and analyze the influence of external environment on its
profitability and achievement of business strategies. Authors, for example, Hanson et al (2005) and
Robbins, Bergan, Stagg & Coulter (2003), concurred that not only external factors impact significantly on
an organizations business performance, but accomplishing corporate strategic is also affected. Together
with analyzing Woolworths external environment, in this case, the knowledge of internal aspects will
enable Woolworths to improve their current strategies and to turn its strategic mission into effective
actions. Moreover, identifying its position in retailing industry allow Woolworths to adapt and use their
competitive advantages in order to succeed. External environment is broken into two levels, including
general influence factors called macro-environment and the industry-environment which influences
outside the company boundaries
The report will only evaluate Woolworths industry-environments by using Porters five forces analysis,
including bargaining power of suppliers, bargaining power of buyers, threat of new entrants, industry
substitutes, and rivalry among competitors. The company should focus on implementing their strategy
based on the five force analysis.
3.1. Bargaining power of suppliers
According to Porter (1979), the higher important suppliers are, the stronger they are. Therefore,
Woolworths business, particularly Safeway Supermarkets, have their low dependence on the suppliers,
meaning the weak bargaining power of suppliers. The main reason is the considerable amount of retailing
market share in Australia and New Zealand and the huge number of products being sold to the industry.
3.2. Bargaining power of customers
The majority of Woolworths customers are individual buyers who have really strong bargaining power.
Miranda, Konya & Havrilla (2005) mentioned that strong power customers enable to force the company
decreasing the price as the attribution of purchasing at the store. To meet to customer needs, delivering
low-priced products is one of Woolworths major strategies.
3.3. Threat of new retailers
The threat of new entrants for Woolworths is considered not significantly because of several reasons.
Firstly, setting up the business with a huge number of stores and excellence quality enough to compare

with the organization and its competitors such as Coles, needs a lot of amount of start-up capital, not only
for fixed facilities, but also for operating the business. Furthermore, Woolworths and its existing
competitors are dominant players with variable accesses to distribution channels and trusted brands in
retailing industry. Possible new entrants have to face with the risks of losing their investment and also the
high competitive in the industry.
3.4. Threat of substitute products and services
In term of industry rivalry, Woolworths businesses have to face the high competition, particularly
Woolworths Supermarket or Dick Smith. Substitute products are offered to all of the Australian major
supermarkets, so hence, the supermarket should come up with innovative and competitive strategies to
attract their customers and build brand reputation. A competitive price strategy, as Hill et al. mentioned
(2007), is the most important factor in retailing industry. Their competitor Coles also provided the rewind
price strategy for consumers. To conclude, there is a high threat for Woolworths businesses in term of
substitute products and services.
3.5. Rivalry among competitors
The presence of some strong competitors in Australia retail and grocery industry such as Myer or Coles is
likely to limit the Woolworths market share and contribute the high level of concentration. The intensity of
those competitors is forcing the company continuously creating competitive and effective strategies in
order to differentiate themselves from competitors.

Internal Environment Analysis

Internal environment analysis is identified as analyzing the firms strength and weakness based on their
available resources and capabilities to coordinate resources for productive and effective use (Hanson et
al. 2005). In this case, Woolworths competitive advantage by using resources and capabilities has been
applied effectively.
At the end of the 2012 financial year, Woolworths operated 3,329 stores across Australia and New
Zealand, and employed 195,206 people. It also has been one of the most trusted brands in retailing
industry. Woolworths found their core competencies by using more experienced employees, more in-store
services and more values for customers, rather than their major competitors.
More experienced staff employed is the first Woolworths resources and capabilities. Woolworths
Supermarket, for example, has more efficient workers compared to its major competitor Coles. Instead of
using young workers as Coles, the company prefers to employ middle-aged experience workers and
focuses on training and developing employees. In 2011, $60 million was invested in learning and
development initiatives across the organization. Woolworths also has its point of view that retailing is a
highly-focused business which is why sourcing the best talent from Australia and the world is important to
its success.

Moreover, in-store services are greatly focused in Woolworths strategy priority. A number of in-store
services have been provided to the customers, for example, delivery service for heavy products or many
purchases in one day with an affordable price, and also in-store butchers to prepare and pack customers
chosen fresh meats at Safeway Supermarket. One of Woolworths fresh food initiatives was to expand the
new in-store sushi kitchens to cater for increasingly diverse tastes.
5. SWOT Analysis
5.1. Strength
Strong financial performance
Woolworthss most businesses (for example Safeway Supermarket, Big W, Dan Murphys and Dick
Smith) have presented greatly financial status in the past of few years with the increase in sales growth
rate. Together with reducing overall business costs, Woolworths has reached a 7.96% growth in revenue
for five years, a higher number in comparison with other competitors such as Coles and Bi-Lo.
Woolworths ability to generate capital in the case that they have plans to expand their market by opening
more stores and updating more facilities is one of the companys strengths. For more information, five
year financial report summary will be showed in Appendix 1.
Trusted brand name and reputation
According to a survey conducted in 2005, Woolworths was ranked as the first retailer in overall leadership
and responding innovatively to customer needs (Rees & Westlake, 1994). At the end of 2012,
Woolworths was voted the sustainable retailer of the year by BRM AMP Australian retailer and ranked as
the largest online retailer in Australia and New Zealand in term of business size, range of products,
services and prices.
Better relationship with suppliers
Woolworths has focused on developing strong long-term relationships with producers and suppliers.
Some pricing action initiated by other retailers, for example private label milk reductions, has caused
considerable concern among suppliers that long-term profitability will be impacted. Woolworths are pretty
proud of their relationship with supplier. In 2011, Woolworths has worked with the Federal Government in
a Green/White Paper process to develop National Food Plan, and also with other major retailers and
suppliers to develop a Charter of Fair Trade that can encapsulate the key principles of supplier/retailer
business relationship. In addition, in 2007, Woolworths Fresh Food Future program was implemented to
help farmers in order to promote sustainable agriculture.
5.2. Weakness
Significantly increasing debt

Woolworths debt rate has gone up considerably at the end of 2012 in comparison with five previous
years. In the end of the 2012 financial year, Woolworths debt was increased from AUD$513 million in
2008 to AUD$4,316, as the result of many acquisition Woolworth made in the first months of 2012.
Although the sales growth is still high, the increase in debt rate will cause the financial risk for
Woolworths.
Limited geographical market share
Obviously, most of Woolworths businesses have operations only in Australia and New Zealand. To win
the competition with international retailers, for example, Wal-Mart, which operates in Asia, Europe, South
America, US, Canada, Mexico and UK, Woolworths have to consider their limited share in global market
and expand internationally.
5.3. Opportunities
Expanding online retailing
Over the decades, the future of retailing industry has been reshaped significantly by the presence of
computerization; the development of technology and supply chain, manufacturing innovations, and the
change of consumer lifestyle changes. Retail industry now is approached differently driven by a digital
commerce and Internet development. More than ever before, the consumer is put at the heart of
Woolworths business. After applying online shopping for all Woolworthss business across Australia and
New Zealand, a significant increase in Woolworths profit was seen in the years. By downloading
available applications in iphone, customers can access to Big Ws online shopping and the 10% of
transactions during 2012 promotion time was the result.
Growth opportunity in the health food sector
According to The United Nations Food and Agriculture Organization (UNFAO), global population is
possible to reach 9.1 billion in 2050, meaning that to feed them requires a 70% increase in food
production (UNFAO, 2009). Instead of expanding the land used for agricultural production, growing yield
and cropping intensity are preferred on existing farmlands to achieve 90% of grains in production
required. However, the consequence of boosting crop yields is environment pollution and climate change
also impacts on the achievement. Woolworths Fresh Food Future programs success provides an
opportunity for innovative farming, productivity and long-term sustainability.
5.4. Threats
Woolworths is facing with firm competition threats from other major retailers in Australia. Woolworths
everyday low price strategy is responded by the price rewind strategy of Coles their major competitor in
Australian retailing industry.
In addition, with the plan to approach to other new markets like India, Hong Kong, Woolworths will
experience the high competition from existing international retailers.

The other threats for Woolworths are the slow growth and unpredictable in Australian uncertainty, and the
increase in diseases related to consuming alcohol caused the pressure from Government to reduce
alcohol production, which limit their sales and market share.

Question 1:- Identify the main characteristics of the industry in which Woolworths operate?
In June 2001, Australias 10,673 clothing retailing establishments were distributed
across thenation in rough proportion to population densities that is, concentrated in
the key cities of Sydney, Melbourne, Brisbane and Perth (ABS 2006c). The structure of
the Australia garment retail sector reflects its historical development. Under industry
protection before 1990, clothing retail markets were dominated by the firms that
controlled access to import quotas and therefore the supply of imported garments.
When quotas were abolished in 1993, retailers quickly re-organized their supply chains,
jettisoning relationships with local manufacturers and shifting to direct or sub-contracted
importing. Consistent with overseas trends in retail management, retailers also
increased their investments in brand identity and customer loyalty. Often they became
more involved in micro-managing subcontracted production to ensure that garments
reflected (or, more exactly, became a material form of) retail brand identities.
Changes to the scope of retail operations were facilitated by technological advances
that have enabled retailers to accurately track sales, more actively manage their supply
and distribution chains, reduce inventories and limit (end-of-season) stock mark-downs
(Greig 1990). These innovations have also enabled multi-store firms to consolidate and
centralize their warehousing functions. Overall, since the early 1990s many firms that
were formerly pure retailers have either incorporated their wholesaling functions or
formed close alliances with quasi-independent wholesalers. Although subcontracting
has been the dominant sourcing model, albeit with varying degrees of retailer control,
some smaller volume specialized retailers have established their own verticallyintegrated production facilities in the Benetton model.7 These trends have in part
produced and in part reflected the shifting competitiveness of different forms of retailing.
In Australia, clothing retailing takes four main forms: Department stores, specialty retail
chains, boutiques and other retailers. Since liberalization, the configuration and market
shares of different forms of clothing retailing have altered with the changing
competitiveness of different garment sourcing strategies. In 1998/99, the last year for

which detailed data is available, dedicated clothing stores (that is, specialty chains and
boutiques) held a 40% share and Department stores held a 34% share of Australias
clothing market. The remainder comprises of sales in supermarkets, lifestyle stores and
other outlets. It is likely that the Department store share has increased in recent times.
The main characteristics of the industry which Woolworths operates are given below.
1. Direct government influence and monitoring
2. The entry barriers are moderate.
3. Changing of Customers demographics, societal concerns, attitude and facilities of
lifestyles.
4. Highly investment to run these business.
5. The bargaining power of buyers is very high, with exception of specialized stores.
6. The bargaining power of suppliers in supermarket retail industry is high to moderate.
7. The retail industry in Australia is mature and intensely competitive due to the population
size 21 million and the presence of multiple supermarket gain in the market.
8. The availability of industry substitutes in supermarket industry is moderate to high.

So retail industry in Australia is not attractive to invest

Question 3:- Which important competencies did Woolworths use to add value to its
strategic management practices to ensure its sustained growth?
According to the analysis in the assignment, Woolworths has kept a leader position of
supermarkets in Australia for many years. Therefore, the primary marketing objective is that
Woolworths need to keep this strength for the future 12 months. Woolworths needs to find
ways to strengthen the strong position of local market first in order to lower the risk when
doing other investment during the future 12 months. In addition. Woolworths may consider to
expand its overseas market as a second marketing objective. Since some oversea market has a
great demand for daily use high quality product, Woolworths has an advantage entering into a
new market with its good reputation in the industry. Besides, Woolworths can take the benefit
of lower labor cost in some overseas market such as China and India.

Target Markets and Positioning

Market segmentation involves dividing a market into groups or segments with distinct needs
and wants. Consumers within a given market segment are similar to one another in terms of
needs and wants and different from consumers in other market segments.
Customers and organizations purchase and use the products provided in Woolworths only for
daily use. So customers will not spend quite a long time on choosing and comparing the quality
of the products provided by Woolworths, because these are for daily use, and these goods are
easy to find a substitute goods. Woolworths can segment the markets by both consumer and
business type. Since the online business has developed fastly during recent years, Woolworths
may consider to focus on the online B2C market. In addition, the oversea markets such as
Chinese market will attract a lot consumers. Woolworths will select on-line and traditional type
in China as the targets. Our core product is food, laundries, fruits, and some other goods for
daily use, and our actual product is the good quality, and the augmented product is the goods
with services.
Consider the situation, Woolworths plan to use market penetration and market development
strategy. Since Woolworths already has a good reputation in Australia, it can using the highquality exported from Australia and New Zealand to do advertisement to attract new customers
in China.
Marketing Mix Strategy
In a practical way, Woolworths may consider to transform the analytical findings from the past
year into marketing objectives for next year.
Marketing strategic planning
A matrix called Product- Market Growth Matrix, known more as Ansoff Matrix (Igor Ansoff,
1957) is a basic tool to clarify what is marketing strategic planning and how to use it. Ansoff
Matrix proposes four strategies between offer (products) and demand (markets) with some
recommended paths for a controlled development.

Market Penetration
To continue penetrate in the current markets, Woolworths must control the manufacturing
costs and operating expenses, promote branding force, improve customer services, and
enhance sales and marketing force. This strategy is suitable considering the great potential of
growth in both Austrlia and exports to overseas such as Chinese markets.
Retailing industry is a capital-intensive industry with a big proportion of fixed cost and a high
marginal income so it is fit for low-price strategy. Woolworths can streamline the
manufacturing and operating operations as well as improve the logic management to control
the overall costs to develop a cost advantage over its competitors to attract more pricesensitive consumers.
Branding can be achieved through extensive advertising campaigns and promotions. In
Australia, Woolworths has kept a leadership position for a quite a long time, but in order to
enhancing products' economic value in the mind of the consumer, Woolworths needs to
maintain a good reputation and upgrade after-sales service quality.
Woolworths should try to focus on selling daily shopping goods such as food and laundries to
the public, for instance, it needs to lower cost in order to boost sales volume.
Good supply chain management is really important for Woolworths, because it can lower the
cost effectively. For instance, Woolworths may consider using just-in-time inventory policy,
which means booking the inventory when ordered. This will lower the storage cost, but it needs
a strong supply chain support. To build a strong supply chain management, Woolworths need
to earn a good reputation in order to improve the creditability with the logistic companies.
Providing prompt and high quality customer services not only strengthen the customer loyalty,
but also provide an additional source of revenue with high margin.
Dealer bridges the manufacturers and consumers. Therefore, a strong dealership increase the
coverage of Woolworthss products, deliver better services to consumers and provide timely
feedbacks, which in turn, boost the sales volume of Woolworths.
Market Development
According to bureau of Statistic China (2012), the amount of the elderly people between 50-70
years old will increase dramatically during the following 10 years. This is a new market with

great potential and little competition. Given the fact that aged people are cautious in spending,
Woolworthss products are attractively to them plus little improvement, because it has a highly
recommended reputation.
Next year, Woolworths will target and emphasis on entering into a wholely new market like
China. Woolworthss goods and services can totally attract the customers in China comparing
with the other oversea enterprises such Wal-mart and Carrefour.
Cost Leadership
First, Woolworths may adapts Just-in-time production, a Japanese philosophy that components
are not stockpiled months in advance, but ordered when required. It removes storage costs.
Secondly, production activities are in diverse countries and regions to pursue the lowest cost,
for instance, vegetables and fruits from Japan, milk from Australia and rice growing in China.
Lastly, Woolworths may use its R&D center to find a more effective way to corporate with
different logistic company. In addition, Woolworths also need to integrates global research
resources, addresses financial issues and insufficient technical people in specific areas with the
help of R&D centers in order to lower the cost.
Localization
Localization makes Woolworths catch taste of local people and takes advantage of local
resources. For instance, in order to transfer core competency and specific organization culture
to subsidiaries, Parent company send technical people to subsidiaries to teach local employees
core technology or require senior technical people to learn the core competency in overseas
factories. Moreover, Woolworths should respects local traditions and beliefs. Based on that, it
promotes Woolworthss philosophy and concepts of operation and management. This strategy
is more likely that core competency leak out. Change is only consistent thing. As long as
Woolworths keeps changing its strategy and product versions to follow the trend, the risk will
be reduced. By the way, employees from overseas specially should be given a lot of trust and
responsibility, and they can be trained to be multi skilled. This leads to a high level of job
satisfaction which makes employees work better.
World Class Supply Chain: Woolworths have been able to develop a very efficient supply
chain network through investing in latest technology and distribution centers. These distribution

centers are both resources and capabilities in its inbound and outbound logistics. Woolworths
have very much focused on efficiency and cost cutting unnecessary expenses. Woolworths have
always been the industry first mover when it came to use of technology and with the
technological capabilities and strong supplier relationships, Woolworths supply chain will be
difficult to imitate by its competitors.
Conclusion
Woolworthss influences on the local economy are great. The transnational strategy creates
employment in the local areas. Local people become wealthier and spend more and therefore
local services and economy benefit. These effects create the money needed to enhance the
infrastructure and image of the area, therefore more industry is attracted. In this report, our
purpose is to analyze the operation of Woolworths and set the target market and position for
Woolworths. In order to identify the best strategy of Woolworths for next 12 months,
marketing analysis and strategies are really important for Woolworths. This report have faith
that these strategies will help Woolworths effectively to stand out in the supermarket industry
in both local Australia and overseas market.
. Recommendation
As discussion earlier, the price strategy is the most important factor in retail industry. It is supported by
Miranda, Konya & Havrila (2005) that the convenience and the price of goods are taken in account firstly
in customers decision process in Supermarket industry. The Safeway Supermarket is in the middle of the
chain between the producers/suppliers to consumers, so that the difference of products among
competitors in the industry is not significant. Therefore, to achieve their strategies, Woolworths should
focus on:
- A cost-leadership culture
- Strategic alliance
- Product proliferation
- People-focused development
A Cost-Leadership Culture
Hanson et al. (2005) identified a cost-leadership strategy as an integrated set of actions designed to
produce or deliver goods or services at the lowest cost, relative to competitors, with features that are
acceptable to customers. In order to gain the maximum outputs at the lowest costs expensed,
Woolworths have implemented the sale-up/costs down policy for many years which was designed to

reduce the costs related to production. Woolworths have been successful to apply the policy and lowered
their prices.
Woolworths should consider the other cost-leadership schemes to cut down their operating costs such as
the just-in-time strategy. The strategy is utilized in managing products in supply chain to decrease the
costs of wastage and storage by making and arriving products at retailers at retailers at the time they are
required (Anonymous, 2004). To accomplish the strategy effectively, it is necessary to have a stock
replenishment program to forecast the amount of products demanded. The advantages of the strategy, of
course, reduce the overall costs by cutting the wastage and storage, and also increase the profit margin
(Mudgil, 2004). However, the long distance between the stores and suppliers is the challenges as the
Woolworths suppliers are located around Australia. In addition, the cost of storage is likely to be higher if
the predication system is poor performance.
Strategic Alliance
The second suggestion is that Woolworths should continue and develop their strategic alliance between
the core businesses with different operations. The strategy has been applied in both Woolworths and their
competitor Coles as they have started correlation with companies such as Caltex and Shell, respectively.
Drainer (2004) explained that both of participators are beneficial from such alliances by gaining excess
profits that the companies themselves could not achieve. An example for the alliance between Caltex and
Woolworths is that a discount is applied for the Woolworths customers if they purchased the amount of
petrol for their cars with petrol prices rising. Woolworths also have agreement with Visa International and
Caltex to provide a discount for Caltexs customers who pay more than AUD$30 by Visa card in any
Woolworths stores.
To take full advantage of the strategy, Woolworths is recommended to combine the alliance with a reward
program. This program has a short-term impact on Woolworths sales and revenue, and also builds the
long-term customer loyalty by offers the customer to collect reward points.
Product Proliferation
The strategy can be considered as product diversification that Woolworths should continue to develop in
the years to come. For example, Woolworths were successful before to take acquisition with Dan
Murphys Liquor Stores in order to provide a new range of products and services at the same market to
attract new consumers and meet the existing customers needs. Amber (2006) has his point of view that
the strategy is suitable for entering the mature industries such as Australia.
In term of product proliferation, McDonalds case is a good example for Woolworths. McDonalds have
create a everyday products strategy as they sell bread, eggs and milk only in one day and employ foodfor-now program, instead of food-for slightly-later which is driven by the increase of demands in using
fresh food nowadays. Broaden Woolworths target market by entering the pharmaceutical market and
continuing unrelated diversification process are also the good recommendation for Woolworths.

People-focused development
Woolworths have found the importance of their human resources and capabilities in achieving the goals
that retailing is a highly people-focused business. Staff diversity was an agreement of Woolworths with
the Australian Government in 2012, in which Woolworths are committed to employ people from different
backgrounds in term of nationality, ages and so on. It is no doubtable that diverse background employees
are necessary in a multi-cultural country like Australia.
However, the quality of services in all Woolworths stores might be influenced because of the gap in staff
qualification. And also the difficulties in controlling and managing people from different cultures are the
biggest challenge for Woolworths.
CONCLUSION
The report is an analysis of Woolworths currency strategy and practical advances for future improvement.
Woolworths has been ranked as one of the most trusted brands in Australian and New Zealand retailing
industry. As it can be seen from Porters five forces analysis, Woolworths have faced with the high
competition in the industry as the consequence of high threats of substitute products and services.
Woolworths customers are mainly individual consumers so that the influence of customers is great. The
next part of the report is internal analysis. Woolworths find themselves having the core competences of
using resources and capabilities. There are some internal strength and weakness, and also external
opportunities and threats that Woolworth should consider in creating an innovative and competitive
strategy. Finally, the set of recommendations is made. There are four main suggestions for Woolworths,
including cost-leadership strategy, strategic alliances, product proliferation, and people-focused
development.