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PRJM6005 Developing a Business Strategy Assignment Help
Report is developed in relation with analysis of the internal as well as external environment of the company. Analysis of external environment of the company will include PESTLE analysis and analysis of Porter five forces which could affect the process of the company. For the analysis of internal environment value chain analysis will be done. For company example Woolworth is taken in which information related with the internal and external environment of the company will be done. Woolworth is a supermarket chain in Australia which is owned by the Woolworths Limited. Company operates approximately 1000 stores across Australia and was founded in 1924.
Part B1: External Strategic Analysis
Porter 5 Forces
According to porter’s five forces model there are various forces available in the market which could have a direct impact on the market of Woolworth supermarket.
Threat of New Entrants: Retail sector is a very big sector in which people have freedom to enter, many new entrants enters into the retail market. It could be possible that various new entries could affect the market of Woolworth (Nieman, et. al., 2014). Coles is the new entrant in the market which could affect the sale of Woolworth, but it is required that Coles will have to open lot many outlets so as to give tough competition to Woolworth.
Bargaining Power of Buyers: Due to high competition in the retail sector customers have a very effective bargaining power. Customers bargaining could directly affect the revenue of the company. It is necessary that Woolworth should insure to provide effective strategies with which company could deal with the bargaining power of the customers. Majority of the customers of Woolworth are the independent buyers who have a strong bargaining power for which the major strategy that is being adopted by the company is to provide low priced quality products (Fung, et. al., 2014).
Threat of Substitutes Products or services: There are many substitutes available in the market of retail sectors which attracts many of the customers. These substitute products directly affects the revenue as well as profit of Woolworth (Ryzhikova, 2014). There are many competitors available in the market like Coles and TESCO who are availing substitute products at lower prices. Hence, to deal with this competitive strategies are adopted by Woolworth like advertising the products and providing attractive offers to the customers so that they could get attracted towards the products and services.
Bargaining Power of Supplier: Suppliers have the bargaining power as they provide services to the businesses which avails effective set of commission to them. It is necessary that company should provide effective commission to the suppliers so that they could provide continuous services to the company. With the analysis with Woolworths the information was gathered that the Safeway Supermarkets of Woolworth has low dependence on the suppliers due to which the bargaining power of Woolworth with suppliers is not effective. Company has developed the strategy of providing fair incentives to the dealers and suppliers so as to develop strong relationship with the same (Nieman, et. al., 2014).
Rivalry Among Existing Competitors: Competitors are the biggest threat for the company. There are various competitive strategies which have a direct impact on the process of the company. Company should focus on the competitive strategies which could help the company to attain success in the market (Smirnova, 2015). There are certain competitors in Australia like Myer and Coles who are giving tough competition to Woolworth. Intensity of the competitors is creating a continuous force so in order to differentiate the competitors Woolworth has adopted the competitive strategies in which company will be able to provide quality products at low prices.
Political Factors: There are various political factors which have a direct impact on the processing of the company. Company should focus on the policies which could help it to work smoothly in the market.
Economical Factors: Economy of the countries keeps on changing, when economy comes down buying power of the customers gets affected. It is necessary that Woolworth supermarket should focus on the economic aspects and provide support to the people so that they could get attracted at the time of crisis ("Woolworths", 2017). Financial crisis is one of the most affecting threats for Woolworth in which harsh decisions are being taken by the company. Like in the financial crisis of 2009 Woolworth has to fire around 30,000 employees which affected the image of the company. Such kind of decisions affects the whole process as well as goodwill of the company in the competitive market.
Social Factors: For Woolworth it is important that the company should work towards to help the society to grow. Working towards the society will help the company to build positive image in the market with the effect of which people will get attracted towards the company and will prefer to buy the products and services of the supermarket. Woolworth keeps remaining indulged in the charity programs and provides better support to the society. A loyalty program was launched by Woolworth in which organisation earned a set of 900,000 members which is really a very huge number ("Woolworths", 2017).
Technological Factors: Technology in present scenario plays a very vital role for the businesses working in the competitive market. It is necessary that Woolworth should remain up to date and should apply new technologies to the workplace so that it could avail effective services to the customers (Alrawashdeh, 2012). RFID is the technology that is being used by Woolworth so as to manage the inventory and the stock available with the store for the visitors. At present company has integrated service oriented architecture (SOA) in its operations in which company aimed to support the supply chain management of the company across different retail stores? Hence, it could be seen that company is technologically up to date so as to manage the services in an effective manner.
Fig: Showing competitors analysis of Woolworths
(Atighechian, et. al., 2016)
Legal Factors: There are various legal aspects like Discrimination Act and various other acts which could affect the company’s progress in the market. It is necessary that Woolworth should develop the policies which could help it to maintain the decorum. Woolworth has the policy to provide equal opportunities to the people of different diversities. Company prefers to take all the approvals related with the new retail stores so as to maintain the legal decorum (Fung, et. al., 2014).
Environmental Factors: Environmental factors can also affect the process of the company. Woolworth should work towards to help the environment and maintain the ecological system. Such type of activities helps the company to sustain and grow in the competitive market (Atighechian, et. al., 2016). Woolworth is known for maintaining the ecological system because from many years company has been participating in the recycling practices so it could help in the reduction of the pollution and make a contribution in the sustainable environment.
Part B2: Internal Strategic Analysis
Firm Value Analysis
Firm Infrastructure: Woolworth has a proper infrastructure which provides better and effective services to the customers coming to the supermarket for shopping. There are various people working in Woolworth for which company has provided a proper infrastructure to work in.
Human Resources: There are various people working in Woolworth, human resource management of the company ensures that all the people working should get proper support so that they could work comfortably at the workplace.
Fig Showing Percentage of Expenses made by Woolworths in it Internal processes
(Nieman, et. al., 2014)
Technology Development: Technology is another aspect that is being managed effectively by the company. Company has an information technology department which ensures to manage all the technological up gradations at the workplace so as to provide continuous services to the customers and employees (Fung, 2014).
Procurement: Company focuses on the acquisition of the new companies. To ensure that the company could cover whole market share, it focuses on procurement and prefers to indulge in the innovative activities which could help the company to grow in the market.
Inbound Logistics: Company has its own transportation system which could help in transferring its products and services in a proper manner. Inbound logistics of the company has a great capacity to transport its products from one place to another which helps the company to process the work in a smooth manner (Nieman, et. al., 2014).
Operations: All the operational process of the company are managed by the backend office in which people provide proper support system to the customers and help them to make effective set of decisions (Smirnova, 2015).
Outbound Logistics: Outbound Logistics of the company is also strong. Company transfers its products and services to other countries with the help of cargo ships and planes. With the help of outbound logistics company provide effective set of services to the people available in various countries.
Marketing and Sales: Company has a marketing department and sales department which ensure that all the products and services could be delivered to the target customers. Company advertise its products and services on televisions and is planning to advertise on the social networking sites so as to attract effective set of customers towards the products and services of the company.
Services: Woolworth is the company which has the policy to provide after sale services to its customers. There are various services like after sale support and home delivery system so that company could avail proper services to its customers ("Woolworths", 2017).
At the end it could be concluded that companies should indulge in some or the other market survey analysis aspects so that it could understand the market situations. Analysis of the external environment helps the companies to gain information related with various external aspects which could affect the process of the company. Analysis of internal environment helps the company to gain information related with internal aspects which could affect the process of the company. With the help of the analysis of external as well as internal environment company could ensure to manage the internal flow of work and help it to gain competitive advantage in the market.
"Woolworths". 2017. Www.Woolworths.Com. https://www.woolworths.com.au/.
Alrawashdeh, Rami. 2012. "The Competitiveness Of Jordan Phosphate Mines Company (JPMC) Using Porter Five Forces Analysis". International Journal Of Economics And Finance 5 (1): 67-72.
Atighechian, Golrokh, Mohammadreza Maleki, Aidin Aryankhesal, and Katayoun Jahangiri. 2016. "Are Macro And Micro Environment Affecting Management Of Fresh Water Resources? A Case From Iran With PESTLE Analysis". Materia Socio Medica 28 (4): 307.
Fung, Han Ping. 2014. "Using Porter Five Forces And Technology Acceptance Model To Predict Cloud Computing Adoption Among IT Outsourcing Service Providers". Internet Technologies And Applications Research 1 (2): 18.
Nieman, Gideon, and J. A Bennett. 2014. Business Management. 1st ed. Pretoria: Van Schaik Publishers.
Ryzhikova, T. 2014. "THREATS TO BUSINESS: THEORY, METHODS, ASSUMPTIONS". Business Strategies, no. 1: 73.
Smirnova, D. D. 2015. "PROBLEMS OF SUSTAINABLE BUSINESS DEVELOPMENT INDUSTRIAL ENTERPRISES". Business Strategies, no. 1: 5.