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HI6008 Global Business Model Assignment Help
The topic of this research is “An analysis of the factors responsible for attracting customers towards Woolworths in Mosman, Punchbowl, and Blacktown”. Global Business Model Assignment Help covers the analysis of various factors which helps in attracting maximum customers towards the largest supermarket of Australia i.e. Woolworths. Three suburbs (Mosman, Punchbowl and Blacktown) are been taken for the critical evaluation of the factors and to study about them in depth. Also, the global business model of the supermarket will be discussed with the business model adopted in Australia. The strategies will be discussed with respect to the competitors Coles and Aldi.
Part 1: Global and local business model of Woolworths
I identified that Woolworths being the largest supermarket in Australia believes in providing a vast variety of goods and services to the customers. They also provide products to the customers as per their changing needs and requirements. Woolworths tries to follow the unique business model which is same in Australia and in other countries.
As per Keith (2012), Australia is the country which has the most focused and rigorous supermarket industry. The biggest supermarket in Australia is Woolworths which was founded in 1931. Woolworths own more than 840 supermarkets in Australia and the revenue of the brand is more than $3.5 billion which makes it stand on the second position in the country in terms of revenue. Supermarkets have a tough competition to gain maximum no. of market share in Australia. The supermarket industry of Australia have many big players like Safeway, Coles, Big W and more but Coles and Woolworths together contains 80% of the market share (Keith, 2012). According to Mohan (2013), in the retail supermarkets, customer satisfaction is the main aim and goal. Without customer satisfaction, the stores are not able to sustain in the competitive markets.
Woolworths ensures that it ensures customer satisfaction and retains the customers and their loyalty so as to maintain their number 1 position in the global markets and in the domestic markets of Australia. Woolworth adopts a global business model in which it responds to the continuously changing needs and trends in the world. The business of Woolworths operates in here big geographies which are South Africa, Sub-Saharan Africa and in Australia which is its home country (Woolworths, 2015). Woolworths moulds its business practices as per the requirement of the nation in which it operates. Like the government laws and policies are followed in order to perform successfully in different countries. Woolworths also source the opportunities so that more competitive pricing can be delivered to the customers. Global retail is a modern concept which is going through the period of changing consumer expectations. Many big retailers are expanding their business to other countries through digital marketing channels and also by opening physical stores so that they can bring growth to their business and meet the global level of competition. Woolworth not only sells its home products but also offers several products in order to provide variety to the global customers. It has a wide product range in order to allure customers. Woolworth also provides remuneration to its human capital so that it can get the efforts by the top talents in the industry and it can be globally competitive. As a food retailer, Woolworth forms a good supply chain which operates at a global level. The business also builds up strategies which help it to face the challenges on the global level (Woolworths, 2015).
Woolworths have one strategy of designing its stores same everywhere, whether it is in other country or in Australia. It provides the same feeling to the customers in every store they visit. It also eliminates the extra efforts by the company in designing stores and their layouts. But the store provides different products at different places so that eh local needs and requirements of the customers can be met. Woolworth integrates its functions with the help of different suppliers who can sit in the middle and help the organisation to integrate different operations at the global and local level (Woolworths, 2008).
The difference between the global and local business model is not much. Woolworth is committed to providing best services to its customers. On the global level, it first analyses the Political, economic and technological factors along with the socio-cultural factors which help the business in knowing the needs of the people and to know the potential no. of customers. In Australia, the supermarket is well known about the people and their needs but they keep on conducting surveys to know the changing trends. In Australia, it combines its business with Coles, another big supermarket and together gains 80% of the market share (Woolworths, 2008).
In short, it can be said that Woolworth has expanded its operations in different countries and it tries to fulfil the needs of global and local customers. Woolworths is making use of network technologies and innovation in order to set up its operations in new markets and to retain the customers which are already connected with Woolworths. When the needs and requirements of the customers have fulfilled appropriately, satisfaction and loyalty from the customers are gained.
Part 2: Critical evaluation strategy of Woolworths with Coles & Aldi
I realised that the retail industry is highly competitive in Australia and in the world. The strategies adopted by the supermarkets need to be evaluated in order to know how they enhance the performance of the business. I analysed that Woolworths adopts the strategy of focussing on its customers and their changing needs and requirements in order to provide satisfaction to them.
The two biggest players in this industry in Australia are Woolworths and Coles. Then Aldi follows both of these supermarkets with the growing share of the market because it is establishing itself as a discounted supermarket which is attracting customers because it is providing low priced goods. Customer satisfaction is a very important aspect for Woolworths and it aims at maximum customer satisfaction and customer loyalty.
According to Mohan (2013), in the retail supermarkets, customer satisfaction is the main aim and goal. Without customer satisfaction, the stores are not able to sustain in the competitive markets. Woolworths tries to ensure maximum customer satisfaction and retains the customers and their loyalty so that they can lead the retail markets of Australia and beyond. As per White (2013), Customer Satisfaction refers to the degree of satisfaction which is been provided by the business to the customers. Customer satisfaction is important because it leads to the customer loyalty, repeated purchase and success of the business (White, 2013). So, customer satisfaction is very important for Woolworths to sustain in this highly competitive market of retail and grocery in Australia. To achieve its goal, Woolworths adopts various strategies in order to maintain its position in the market. It adopts differentiation strategy which leads the company to focus on providing highly differentiated product and product line to the customers. It also believes in adopting different marketing strategies in order to connect with the larger no. of people. Woolworth has adopted “Fresh Food People” as its slogan with help and supports it in the differentiation strategy. The organisation focuses on providing fresh food to its customers because quality matters the most according to the organisation. On the basis of providing quality products, the company has reached this level and is a market leader in the industry.
On the other hand, Coles has a strategy of simplifying their business and reducing the costs. It believes in good relationships with the suppliers and conducting regular surveys in order to keep the business up to date with the changing demands and requirements. Coles focuses on improving its supply chain so that the overall business can be improved and the business can gain competitive advantage. Aldi follows the different strategy of providing the lower priced goods by selling more of the private labels and a lesser variety of goods which ultimately reduces the costs of the organisation.
Woolworth designs its stores as per the convenience of the customers. In accordance with Waja (2013), Woolworth’s store in Mosman, Punchbowl and Blacktown is designed according to the population residing there. As per Hosseini & Jayashree (2014), different suburbs are reflecting on the designs and store layouts. These are important to be considered for attracting the local customers. The stores of Woolworths use its window displays and store entrance for attracting the local demographics of the place. It also includes music, wall posters, product displays and lightening in a way which attracts the local population of the suburbs of Mosman, Punchbowl and Blacktown (Hosseini & Jayashree, 2014).
The supermarket decides its prices as per the demographic situations of places like Mosman includes the professionals such as doctors, lawyers and others who mainly look for quality of products. These are the people having high knowledge about the hygiene in food and quality of products. These professionals consider society in purchasing the products. Prices do not matter to these customers if they are provided with quality products. The company is providing with the excellent quality products to the customers of Mosman so as to gain satisfaction from the majority of the population out there.
According to Lynn (2011), the success of any business is dependent upon three factors i.e. segmentation, targeting a particular class of customers and differentiating your product from that of your competitors. The target market of supermarkets consists of many groups whose demands and needs are different, so Woolworths prepare its strategies in accordance with these needs. Differentiation of customers is done on basis of location, income, profession, age group, etc. Woolworth categorises their customers as per most the appropriate method. For e.g. In Mosman, most of the customers are Australian, so most favoured products by Australians is categorised into one head. Another category for customers in the punchbowl and the black town is created where there is a cultural diversity in the population.
To summarise, Woolworths adopts price strategies, store displays, promotional strategies and the relationship is maintained with the stakeholders to significantly compete with the competitors in the industry. It shows how the supermarket moulds its strategies with the different characteristics of customers in different suburbs. It provides customer satisfaction and helps Woolworths in gaining customer loyalty as well. Customer loyalty provides a competitive advantage to the company over the other organisations.
Part 3: Competitive advantage of Woolworths
I found that Woolworths lead the market of Australia because it takes care of the changing needs of the customers. It provides a wide variety of products which develop interest among the customers for the brand. If segments its customers to target them better by fulfilling their needs. The supermarket company have the good reach of business in comparison to other brands in Australia which creates a competitive advantage to the supermarket.
Being the leading supermarket and having tough competition with Coles and Aldi, Woolworths is considering the prices of its products as its main competitive advantage. Singh (2012) stated that prices in different suburbs provide the company with the advantage to attract the customers without restricting them by income, culture etc. (Singh, 2012). The Punchbowl being the suburb having settled and wealthy people provides Woolworths with the chance to attract major earnings from these areas. The wealthy customers of Punchbowl are majorly targeted by the company in providing the high prices for increasing its profits. The lifestyle of people in this suburb of Australia has the exclusiveness as they belong to the richer and wealthier sections of society. The prices of the products are not considered by these people while shopping. The company because of wealthier customers get the benefit of providing high prices of their products so as to get maximum benefits.
According to Kumar (2013), not only the prices affect the profits and attraction of customers of the company but the cultural aspects of the areas also play an important role in getting the customers. For the maximum customer satisfaction, Woolworths focus on the culture and social needs of the customers. For e.g. The Blacktown suburb of Australia includes half of the population of Australia and others from different countries. Because of this, the place has the multicultural factor which gives it a benefit of attracting the people by providing them with the different festivity schemes, offers etc. the prices of the products also get change due to different seasonal factors. This is the competitive advantage for the company over Coles and Aldi as people get attracted with the company pricing policies and cultural factors (Kumar, 2013).
According to Mattsson (2009), customer satisfaction is how products of a company satisfy the needs and demands of customers. The best way to increase customer satisfaction is to provide customer value of their money. It enables the organisation to maintain a long term relation with the customers. Woolworths provide monetary and non-monetary incentives to best employees and selection of best employees are done by taking the opinion of customers. After recruitment, employees are given proper training regarding their behaviour at workplace and knowledge about the products. If any new product is introduced then every employee is given adequate knowledge about it.
As per the views of Cristobal et. al. (2011), In order to be competitive, segmentation of online market is for the customer who shops online. There are many factors which influence the online users like the appearance of a mobile application or website, nature of services provided online, online security, etc. Woolworths implement online activities for the users of Mosman as people there are highly educated and have high earnings. The online store is also useful for people of punchbowl as it is situated at a distance of 17 Kilometres from the main business district of Sydney and online shopping may attract new customers as well for Woolworths. This provides a competitive advantage to the organisation.
In short, Woolworths should follow these strategies and methods so that they can be competitively stronger than peers in Australia. Customer satisfaction is dependent on factors like location, product quality, additional services, product quality, value for money, facilities etc. additional services like membership cards, free delivery of goods, parking, membership offers, music, etc. and these are provided by Woolworths to their customers for gaining their satisfaction and loyalty.
Topic 4- Evaluation of demographic profile of three suburbs
I analysed that there are various factors which are responsible for attracting the customers towards supermarkets. These are store design and ambience, marketing and advertising, customer handling and behaviour of employees, prices of products and the types of products it offers to the customers. I found that Woolworth modifies its services, products and other factors according to the places where it operates.
The demographic characteristics of the three suburbs of Australia are given below:
As per Domain (2016), Mosman is located at the lower North shore of Sydney in New South Wales. The place is 8 Kms away from the central business district of Sydney. The average age of the population is 40 where 52% are families and 48% are singles. Most of the people are engaged in professions like Doctors, lawyers and others which show that the population is wealthier than the other parts of the country (Domain, 2016).
As per Domain (2016), Punchbowl is 17 Kms west of the main business district of Sydney. The average age of people here is 20- 40. The suburb has many immigrants from the Italian and Greek origin. Only 46% of the residents in Punchbowl are born in Australia. Rest of them are from Lebanon, Vietnam, China, Indonesia and Greece (Domain, 2016).
According to Domain (2016), the black town is the home to more than 180 nationalities. That is why there are many festivals celebrated and have cultural diversity. The average age is of 20-39 and it is the most multicultural place. Around 505 of the people are native Australians. Rest of them belong to India, Brazil, China, Philippines, etc. (Domain, 2016).
The factors which are responsible for attracting the customers towards the Woolworth stores in different suburbs of Australia are given below:
Store design, facilities and ambience
According to Phoebe & Nyongesa (2015), it is often seen that the first impression of the store creates the last impression on the customers. If the stores are well designed and have pleasant ambience, it will attract the customers and they would like to visit the store again and again (Phoebe & Nyongesa, 2015). As per Tlapana (2009), if the products are not well placed and improper facilities are provided in the store, the customers will not be attracted and will not even enter the store. The customers always prefer a store which is nicely displayed, the products are assorted properly, and ambience is pleasant and has beautiful or attractive store entrance.
Woolworths also take care of the local population while designing the stores. This helps the supermarket in increasing the store traffic and shopping behaviour of the customers. In Mosman, the store is located in a good area where it is accessed by maximum no. of people. On the other hand, in Punchbowl, the store of Woolworths is designed in the way which attracts a young population of the suburb. The store displays products at the entry which attract younger population like sports equipment’s, colourful apparels, etc. In Blacktown, Woolworths makes it store multicultural to attract the population which belongs to different cultures.
Prices of the products
Price is considered as the payment of something in return. As per Haron (2016), the people living in different suburbs are different in terms of income, lifestyle, culture, mentality and society. The prices of goods and services differentiate in every suburb according to people, a society living and income (Haron, 2016).
Marketing and promotional activities
According to Obonyo (2012), major variables included by supermarkets in their market strategies are promotional, price variation, location and customer services. As per Matamalas & Ramos (2009), using promotions as marketing strategy have increased rapidly in recent times. Factors like location, target age group, the purchasing power of people, etc. are considered before formulating the promotional strategies. Promotional activities may not result in increased revenue if it is not implemented effectively. According to Mohan (2013), while doing promotions with the help of social media, hoardings, sponsorships etc., Woolworths include total information of the product.
There is the difference in income earning levels of people in these suburbs. Discounted promotional offers can be started for people in Punchbowl. In Mosman, the average age of the population is 40 and most of the population is engaged in the professions like doctor, lawyer and others. Woolworths use promotional activities like putting hoardings near corporate offices, sponsorships of events and conferences, etc. to attract these customers. As the population of Black town has cultural diversity, Woolworths provide sponsorships in arrangements of different festivals held in these suburbs.
Customer handling and employee behaviour
According to Beatson et al. (2008), Main objective of any business is customer satisfaction and personalised services must be provided to them to retain them with the organisation. Retention of current customers is more profitable for the organisation than attracting new customers (Beatson et al., 2008). Woolworths tries to provide better customers services to attract frequent customers in supermarkets. There is cultural diversity in punch bowl and Black town, so, Woolworths provide training to their employees to talk to them in their native language. The company also try to employee people from these areas so that customers will be able to associate themselves with the company.
As per Larsen (2010), market segmentation on basis of gender can also be advantageous as needs and wants of male and female customers can be very different. Woolworth determines the needs and expectations of both genders separately. Demands of different age groups are determined with the help of survey or questionnaire and Woolworth segments its customers on the following basis:
- Demographic segmentation includes age, gender, occupation, education, nationality etc.
- Psychographic segmentation includes interests, the opinion of population, attitude of people etc.
- Behavioural segmentation includes Loyalty of customer toward the company, Customer preferences etc. (Goyat, 2011).
It can be summarised that Different suburbs are different in terms of their needs, requirements, choices, behaviour, and lifestyle and so on. That is why; this research focuses on how different locations (Mosman, Punchbowl and Blacktown) are considered by Woolworths for meeting the demands and requirements of the local people (Domain, 2016). Catering to different needs of the people residing in different areas/ suburbs creates an advantage for Woolworths which provides it a competitive advantage.
In Global Business Model Assignment Help, It can be concluded that Woolworth is the largest supermarket of Australia which is committed to providing valuable services and products to its customers. These services and products are provided keeping in mind the needs and requirements of the local population of three suburbs considered in the research. These suburbs are Mosman, Blacktown and Punchbowl in which the population is different in terms of choices, age, behaviour, lifestyle, status and many other factors.
The expansion of Woolworths in different countries shows that its global model is successful. Woolworths have different price strategies, marketing and promotional strategies and display strategies to match the demands of the customers which ultimately satisfy them and bring customer loyalty for the brand. The competitive position and advantage have been systems analysis which shows that the organisation leads in the Australian supermarket industry and still striving to get success at the global level. It is much ahead of its competitors like Coles and Aldi in Australia.
Beatson, A., Lings, I. & Gudergan, S. 2008, “Employee Behaviour And Relationship Quality: Impact On Customers”, The Service Industries Journal, 28(2). pp. 211-223.
Cristobal, E., Marimon, F., Daries, N. & Montagut, Y. 2010, “Spanish E-Consumer Segmentation and Positioning in Virtual Supermarkets Sector”, International Journal of Marketing Studies, Vol. 3, No. 2, pp. 16-31.
Domain, 2016, “Suburb Profile”. [Online] Domain. Available at https://www.domain.com.au/suburb-profile [Accessed at 28 Dec 2016].
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