Woolworth Retail Supermarket
Background of Woolworths
Woolworth is an Australian retail supermarket, that deals with a range of products streaming from foods, homeware, beauty products, groceries among others. This chain of business has dominated the Australian markets, and together with Coles take about 80% of the market share(Woolworth,2018). The enigma of Woolworth is primarily recognized from its strategy of adopting high qualified employees, and the proliferated efforts of diversifying their operations in different geographic regions. According to the report released by Forbes, the supermarket has a revenue base of around $56.73 billion, which is contributed to the direct sales of the products to the consumers.
Founded in the year 1924, the retail supermarket has been able to open branches in more than 995 locations, and employed an estimated number of 115,000 people(Woolworth Group,2019 ). The figures illustrate that this is a considerable investment, whose strategy of management require succinct understandingof the various available models. For example, in advertising the brand name, every premise that hosts Woolworth ensures the uniformity in terms of press releases, and even in the products and services, they offer to the customers. Due to this, they have been able to penetrate both the local and international markets(Woolworth,2018). Much of the revenue, is not generated from the mother company in Australia, but the outlets that operate outside this state. Therefore, managing a vast labor force, and understanding of the culture of the people from where the business is located is the center point that differentiates Woolworth from others.
Woolworth primarily specializes in selling groceries, although it retails other products such as cosmetics, clothes etc. In Australia alone, it has one thousand stores, that have raised the brand of the company high. Similarly, they recently introduced Woolworth online, where an individual can order the products, while at home and receive the delivery within the specified number of days. The move was adopted as part of transformative strategies, that the company has been adopting to heighten their revenue base. Similarly, by the year 2012, they operated under the slogan of “Australian Fresh Food People” but later changed in the year 2014 to “Fresh Food People.” The transition was a way of globalization, which has earned the company much more profits than before (Woolworth, 2018).
According to Fife (2013) branding is the center option that can make a company stand out amid the stiff competition in the world. In his research, he noted that most of the increasing number of retail businesses lower the market share, but those that offer quality products, and understands the needs of the customers retains the market command. Further, his observation is supported by Fife(2013) who affirms that globalization is not only viewed in the form of the number of outlets a company opens but instead, continued improvement of services to meet the needs of the modern clients, whose requirements are guided by the changing lifestyles.
The report will, therefore, give an analysis of the Woolworth that will give insight regarding the issues of globalization. The paper will show that globalization is not only about exporting the products, or finding new ventures in the international market, but also entails convenience, variety, customer-centered among others.
Value Chain Paradigms
Value chain according to Holweg&Helo(2014) is a set of activities that a company performs, to improve the quality of the products that they offer to the customers. The sole purpose of this strategy is to increases the potential of the customer base, and override the competitors in the same line of operation. The illustration is quite evident in the retail market, that had recently been populated by different startups poising to solve the needs of the people. Woolworth has been focusing on winning the consumer’s trust by ensuring that anything they do is concentrated on the health of the people, ethical and does not destroy the environment. For quite some time, the company received some criticism from the Australian market, for failing to increase the contact with the suppliers and for being invisible in the market (Holweg& Helo,2014). To address this challenge; therefore, the management improved the supply chain management system. The company has been focusing on two prime value-creating functions, discussed in the following paragraphs.
One of the areas they have capitalized on is inbound logistics that involves direct relationship with the suppliers. As Woolworth is a retail company, it does not involve in the business of primary production (Kitamura & Hayashi,2012). Instead, it relies on suppliers, who bring varied products for the company to resell at a profit. In such a situation, any rogue supplier can significantly affect the brand of the company negatively. To streamline the area of logistics, therefore, the management aimed to improve procurement and logistics. In this case “Trandestone’s Merchandise Lifecycle Management” was chosen as a platform, that would enable in managing a broad base of suppliers-around 60000(Abdi et al.,2018). Also, this platform has revolutionized the finical management of the company and improved business to business relationship. For the product part, the company is performing completeaudit of all items supplied, to ensure that they are of high quality for the customer’s benefit. This is also complemented by the certification of the suppliers. Such, the company has managed to condense the cost by $2.5 billion, thus offering prices that are attractive to the customers (Eunsung& Scott,2018).
Furthermore, the company has adopted in-store promotion to increase the volume of sales. For useful promotion activity, the company uses slick marketing, which aims to change the perception of consumers from it being a rich person retail supermarket to the one that provides quality products. In a bid to make its brand rise above the competitors, the company usually hold weekly specials where some products are sold at reduced prices, that encourages people to buy in bulk(Woolworth,2018). By this process, Woolworth has been able to evaluate the market environment and determine the needs of the customers from an informed point of view.
The pre-service view of the value chain models discussed above is guided by first evaluating the market environment to ascertain the needs available. This is followed by actualizing the strategies, like in this case, holding the weekly specials to increase the volume of sales. With the amplified improvement of technology, Woolworth has leveraged on online selling and advertisement, to reach out totoo many customers in different locations (Abdi et al.,2018). Through this, they can collect feedbacks and complaints, that enables the company to make decisions.Similarly, the company can update the customers on the offers on their website and provide product description for individual products, which primarily helps the buyers to make the right decision. Therefore, technology has continually lowered the cost of operations and improved brand image(Frederick,2008).
Importance of value chain design
The design of the value chain is defined by Walid et al. (2009) as the necessary elements that make the company stand out as the option in the list of the consumer. For a brand to emerge the top among the competitors, a plethora of innovativeness have to be injected, from the point of sale to where the product is targeted to go. Operations of the Woolworth entails the activities that aim to improve customer satisfaction, quality assessment, and inventory management. The company has enhanced a standardized procedure to manage the supplies. From the point of delivery to the time the products are displayed on the shelves, a lot of auditing is done to ascertain the suitability of the item for human consumption (Doyle & Broadbridge,1999). With some highly qualified personnel in the quality assurance department, Woolworth has tenured in rejecting the defective products from reaching the shelves of their shops. Also, the use of point of sale technology has assisted the planners, to know the number of items on the shelves, and determine when to reo-rder the products. Such, at no time the shelves are found empty or lack of a particular product. Holweg&Helo(2014) noted that well-performing businesses ensure a constant supply of the products until they build customer loyalty. It is the confidence that the consumers gain towards a retailer, that makes them to continually remain part of the business. For Woolworth, their stringent insistence on quality has earned them accolade from diverse clients, which has proliferated the growth.
Similarly, use of the P.O.S system has changed the company’s traditional cash register. This has ensured error free data, that can be relied upon to make a future judgment regarding marketing and which products to introduce in the shelves, based on the customers’ buying patterns (Abdi et al.,2018). Overall, the value chain design of Woolworth has helped in quality enhancement, since the products undergo assessment before allowed in. Also, the use of technology has boosted space management, hence saving on cost.
How does the Organization’s Operations Strategy Best respond to Current Trend?
The company’s perspective must fit the order qualifiers and order winners to remain relevant in the market. Defined by Wijayanti et al. (2017),order qualifiers are characteristics of the products that are required, for the customer to make a purchase. On the other hand, order winners entail specific attributes of the product that wins the bid. The two are highly related, and the business has to strike an equilibrium between them, to compete favorably with the others in the market. For Woolworth to retain its command in the market, it has to consistently maintain the quality of the product, which has been its order winning(Woolworth,2018). However, with time, other retailers have adopted the same strategy, hence making it no longer a selling point. The ever-increasing demand has converted the perceived winning plan for Woolworth into order qualifier (other companies offering the same service). Therefore, a more recent development that can be adopted is studying customer behavior and making decisions from the findings. In modern times, demand is being faced away, as a study conducted by Fife (2013) reveals that buying is controlled by an individual’s emotions. He affirms that a company that knows the consumers well can understand their needs as well as the challenges they are facing in regards to the products offered.Woolworth, therefore, can remain competitive by studying the customers.
The major challenge that faces Woolworth is the ever-changing technology and data security. Currently, the company has automated most of the services, and the safety of this huge information is prone to online attackers. This trend could reveal the confidential information of the company, which might halt its operations. In the same vein, data analytics and the internet of things are emerging developments in the field of technology(Ivanov,2015). The tools help the companies to analyze massive data, using the online software and make informed decisions. If the company does not develop the capacity to interpret such information, it would be masked by others, that are relentlessly competing within the same line of operation.
