Strategic Information System Of Woolworths Company In Australia
Sales of Woolworths
Information system has been an important field for all the business organization in the market. Information technology has been helping in maintaining different operations of the organization. It helps in achieving different goals and objectives of the organizations. The strategic information system has been helping in gaining competitive advantages in the market.
Woolworths is home-grown Australian company which was founded in 1924. Woolworths has been one of the largest employers having over 180,000 Australians including 60,000 employees in rural areas. There are over 426,000 shareholders of the company in the market. The company has been growing over large area all over the world (Zalengera et al. 2014). There have been 3000 stores located in New Zealand and Australia. The growing market of the e-commerce industry have led the company to reach up to peak height. However, the company remain only supermarket to offer MSA certified lamb. The company has unrivalled track record for providing training and development skills their employees for providing their best performance to the company. This has helped in reaching Australia’s largest employers and economic contributors in the market.
Figure 1: Sales of Woolworths
(Source: Atighechian et al. 2016, pp. 307)
The retail industry in Australia has been a growing industry in the market. There has been a rapid growth in the retail industry with involvement of large companies. There have been a competitive market for the retail industry in the market. Different companies have been entering in the market for selling their goods and services to the customers.
Figure 2: Revenue growth rate for Australian Industry
(Source: Zahari and Romli 2018, pp.2018)
This report helps in understanding the basic concept of the strategic information system of Woolworths Company in Australia. This report outlines on environmental analysis of the company in the market. The Porter’s Five Forces model has been implemented on the company fir understanding various factors for development of the company (Zahari and Romli 2018). SWOT analysis has been done on the Company for measuring opportunities and threats of the company in the market. A core competency analysis has been performed on operations of the company.
External environment analysis has been an important for the development of the business implementation plan in the market. Various strategies are responsible for the development of the business in the market. However, there are some mistakes dine by the organization by not mentioned and analyzing the external environmental factors before establishing their business in a particular area. These factors include Political, Environmental, social, technological factors, Economic and legal factors.
The Retail Industry in Australia
Political: Political factors have been playing a significant role in determining factors for long term development of the company in the market. Political situation of the Australian government in a particular region is necessary for the development of Woolworths. Political stability is an important factor to be analysed during expansion of company in the market. Taxation policy of the political leaders and government need to be analyzed in the region (Racz et al. 2018). This help in maintaining a long term stability for the company in the market. Legislation trading hours need to be maintained and monitored by the Australian Competition and Consumer commissions (ACCC) under the Trade Practices Act (TPA).
Economic: Various economical factors including inflation rate, savings rate, foreign exchange rate and interest rate need to be properly analyzed by the management of the company. The company have to analyses economic system of the local government in that region. The inflation rate and exchange rate of the market have to be researched by the management of the company. This might help in maintaining a perfect price of the products and services ordered by the company in the market. Labor cost and productivity cost plays an important role in hiring new talents for the company from that region.
Social: Various social cultures have helped in drastic changes in the supermarket industry in Australia. Sale of a product has been totally dependent on the socio-cultural activates in the region. The demographics segment of Australia has been changing continuously. In recent years, people are concerned with health and obesity. Therefore, demand of fat and oily foods have been decreased in the market. The company have to focus in non-oily, low fat and easy to cook foods in the market (Pestle, Crowley and Weirauch 2014). The participation of female employees have been increased in the recent years. The HR department of the company might have look into recruiting female employees for the company.
Technological: Technology has been a great boom in the retail industry all over the world. The Australian retail industry have been benefited by the technological aspect in the market. Woolworths have been using new technical advance in their delivery of products and services (Aithal 2016). The company has been investing on improving supply chain management system of the company.
Demographic: The population of Australia has been increasing in a constant rate. There are various ethnic and religious group living in the region. There are 12% people are over 65 years age. However, the 85+ age group is growing at a fast rate (Manzaneque Corona 2014). Therefore, the company have to look after the old generation products and provide them a quality services.
Environmental Analysis of Woolworths Company in Australia
Bargaining power of suppliers: All the companies in the retail sector have to take their raw materials for suppliers. Therefore, the power of the suppliers in this industry is high. Woolworths has able to maintain a strong supply chain management in the company. This have helped in maintaining a proper relationship with suppliers of raw material to the company.
Bargaining power of Buyers: Expectation and demand of buyers are always high in the market. They always a good quality product under low prices. Therefore, it become difficult for companies to meet their demand in the market (Barba et al. 2016). Therefore, the power of buyers is moderate to high. However, Woolworths has been able to maintain a proper strategies in maintaining demand and expectation of customers in the market.
Threat of substitute: In case, a new product is able to fulfill the requirements of customer in different, it creates difficulties for the companies. For example, online storage have been a substitute for hardware drives companies (Grigg 2015). Therefore, in case of Woolworths, the company have to develop innovative ideas and products for the development of the company in the demand.
Figure 3: Porter’s Five Forces
(Source: Yudha, Tjahjono and Kolios 2018)
Threat of new entrants: The retail industry in Australia has been offering low price to the business in the market. Therefore, new entrants are not focusing on this industry as the ratio of interest and profit is very less in Australia. There has been scarcity of land and high prices of land in Australia (Stavropoulou, De Vuyst and Leroy 2018). These factors have been working as barrier for new entrants in the retail industry. However, there has been conflict between big companies including ALDI and Coles in Australia.
Rivalry among competitors: Rivalry among existing players in the retail industry has been beneficial for the customers as they are reducing the prices of the products in the market (Yudha, Tjahjono and Kolios 2018). The quality of the products and services have been increasing due to remain in competitive advantage in the market.
SWOT Analysis has been consisting of four factors that help in acknowledging position of the companies in the market. This analysis consists of strengths, Weaknesses, Opportunities and threats of the company in the market. The SWOT analysis of Woolworths has been provided below:
|
Strengths |
Weakness |
|
· Variety of products · Brand Image and reputation · Leader in the market share · Proper financial condition |
· Operating cost is high · Increase in debt · Overall manufacturing cost is high · Reduction in petrol margin |
|
Opportunities |
Threats |
|
· Potential for increasing customer base · Potential for increasing market share · Opportunity in health food sector · Increase in population and diversity · Technical advances in ICT implementation |
· Slow growth of retail industry · Recession and unemployment · Dominating power of suppliers · Technological limitations |
Strengths: Woolworths has been one of the oldest company in Australia. Therefore, it has been gaining a lot of trust for the customers in the market. The company has been providing a large variety of products to the customers with a wide range (Aithal, Shailashree and Kumar 2016). Therefore, customers have freedom of selecting products form large variety. The brand image if the company has been good in the market has been helping in attracting customers to the company. The market share in the company has been increasing in the market. The financial condition of the company has been good in the market as they are employing over thousands of employees in the country.
Political Factors
Weakness: Apart for strengths, weaknesses of the company have been affected by the external influence son the company. The price of products have been high all the time that has been creating awful condition for customers. Manufacturing cost of the products have been high in the company (Kolios, Read and Ioannou 2016). The company has been charging high rates as delivery charges. The debt cost of the company has been increasing in a daily basis.
Opportunities: There have been many opportunities of the company as the retail industry has been in growing stage. There has been huge possibility of increasing the customer base for the company in la liver the world. The promotion and marketing of product of the company over the social, media has been increasing in the market (Bohari, Hin and Fuad 2017). There is an opportunity of increasing their product range to health food sector. As the population of Australia is increasing, there has been increase in diversity of people. Therefore, wide range of products might help in increasing the sales of the company in the market. The use of the technical aspects of the company in ICT field has been maintaining the support of advances in the market (Dobbs 2014). The website of the company might be redesigned to include several attributes including making it perfectly responsive for the customers.
The mission statement of the Woolworths has been specifying to strive for providing customers with fresh products and experience with purchasing. There are three main value creating functions:
In-bound logistics: Woolworths has been a retailer. Therefore, it does not produce the products it sells. However, it helps in controlling the distribution of products in the network. The company used to produce goes directly for producers to regional distribution center (Yunna and Yisheng 2014). The warehouse management has been maintained by the company in order to store the products for delivering to customers.
Operations: There are mainly two kinds of operations in the company including the equality assessment and inventory management. These two functions in a way that helps in maintaining the operative control over the distribution of the products to customers.
Marketing and Sales: Woolworths has been working on shirt term sales goals that helps in increasing the revenue of the company in the market. The short term goals helps in maintaining the inventory control of the company (Mathooko and Ogutu 2015). The quality of the products sold by the company have been properly assessed by the quality assessment control department of the company. Therefore, this capability of the company has been helping in providing an extra edge to the development if the company in the market.
Economic Factors
Woolworth has been working for the integrated competitive strategy to maintain its resources on the company. It has been using both cost leadership and differential elements for competing in the market with other giants in the retail industry (Indiatsy et al. 2014). The distribution chain of the company has been maintaining both in-bound and out-bound logistics. Woolworths has a positive brand image in the market.
Figure 4: Summary of Woolworths Significant resources and capabilities
World class supply chain: Innovative and competitive advantage has been gained by the company with the help of world class supply chain management system (Bhatia 2016). It has focused on the significant changes in efficiency and cost cutting budget model.
Branding and market: Woolworth has been following its slogan creating a differentiated image and quality of the products in the market (Zhao et al. 2016). The use of healthy product range has been maintained by the company in the market.
Innovation: The Company has been looking for new innovation in the market.
Integration: Woolworths has vertically integrated some of the supplies by producing its own imputes in market power and respond to the private level trend.
Conclusion
It can be concluded that the use of the strategic information system in the company has been grate step towards the benefits are constant in the market. The background of the company has been discussed in the report. The Pestle analysis of the company has helped in highlighting the external environment analysis of the Woolworths. The political and legal factors have been constantly affecting the growth of the company in the market. The porters five forces model has been used in the company point of view. The buyer and supplier power has been high in this context. However, there is low chance of new entrants in the industry as there are very low profit margin in this industry. The company has able to make $58.5 billion sales in 2013 and still increasing in next years. In 2012, the company has become first national supermarket for offering certified Meat Standards Australia (MSA) graded Australian Beef to customers.
In short term recommendations, the company need to invest more in advertising and branding. The company need to create advertisements depicting healthy meal foods to customers. Therefore, thus might help in increasing the brand image of the company in the market.
The company need to focus on the convenience and shopping experience for long term experience. The company need to focus in the social media marketing that might help in increasing the data base of the customers in the market. The customer base of the company helps in increasing the sales of the company in the market. The company need to diversify the business model that helps in increasing the sales of the company in the market.
Social Factors
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