Strengths and Weaknesses of Woolworths NZ

The purpose of the report is to enlighten the reader with the information about the issued by a well renowned company present in the retail market of New Zealand. The report details the information about the Progressive Enterprises, grocer chain that is subsidiary of Woolworths in the market of New Zealand. Woolworths New Zealand is the second largest grocery company present in the market of New Zealand. The company earned a revenue of NZ $ 6.2 billion in the year 2018. The supermarket industry of New Zealand works in duopoly market structure that is ruled by Foodsuffs along with Woolworths in the environment. The company has 184 supermarket stores, 40 convenience stores and 30 quality stores in the market of New Zealand. The company also operates online grocery store in the name of Countdown in the environment. The market of Woolworths NZ is decreasing due to high degree of competition the market. The organization is struggling to maintain their level of market share in New Zealand against Foodstuffs. Below mentioned report, highlight the reader with the details of the rivalry issue faced by the company Woolworths NZ and elaboration of several theories in respect to the given case. The role of manager in the dynamic business environment of Woolworths is also discussed in the report. The manager of an organization is a person who leads the business in times of difficulty and helps the organization to succeed as well. The dynamic role of Woolworths manager in solving the NZ issue is discussed below:

Woolworths is a strong organization therefore, it has several strengths in the market of New Zealand. The company has several weaknesses in the environment that increases their difficulty to attain sales in target market. More details about the potential strengths and weaknesses of Woolworths New Zealand are discussed below:

Strengths

• There are numerous supermarkets present in the worldwide market but none of them gained the competence to succeed in the tough market of New Zealand. The variety of products offered by the company in the environment help the organization to succeed and initiate sales in NZ market as well. Consistency the quality is the key for the sales of products in the environment and the company never compromises in delivering such quality in the target market (Scherer, 2010).
• Further, it should be noted that the organization has a strong brand portfolio that helps them to attain competence over its competitors in the market. The brand loyalty of the customers towards the NZ branch helps the organization to attain reputable sales in duopoly market. The company offer diversified products to the customers under single head that helps them get interest of customers in their business and build strong brand portfolio as well. The cost price of the business is also its strength in the marketplace as the organization focuses on reducing the costing of the product that subsequently help them to increase profits and give valuable offers to the customers in target market of NZ (Bailey, Price, Pyman, & Parker, 2015).
• Thirdly, it should be noted that the company has efficient and skilled labour that helps them to attain sales and compete against Foodstuffs in the target market. An organization is nothing without its employees in the market, therefore efficient and skilled labour are also an asset for the company.
• Strong distribution channel is crucial for large scale organizations as it helps them to expand appropriately and deliver the goods to the customers on the time. Along with this, expansion in the online market also require efficient distribution channel in the environment so as to circulate the products in the environment. Therefore, strong distribution channel helps the organization to effectively satisfy the requirement of the customers in the business environment (Luiten, Steenhuis, Eyles, Mhurchu, & Waterlander, 2016).

Weakness

• High degree of competition is the most important factor that is the biggest weakness of Woolworths in the market of New Zealand. Competition is one factor that makes it difficult for Woolworths New Zealand to initiate sales in the target market. Foodstuff is also a strong organization present in New Zealand that is constantly working to initiate monopoly in the market of New Zealand and completely eliminate the presence of Woolworths from the market (Parsons, & Wilkinson, 2015).
• Further, it should be noted that the face difficulty in analysing the demand available in the market due to which they lose several opportunities as well. The company is inefficient in analysing the demand of the customers and forecasting other aspects present in the target market due to which they lose the opportunities present in the market. Lack of demand forecasting makes it difficult for the organization to progressively increase its sales in the environment (Humayun, 2016). Further, it should also be noted that the company is facing difficulty to manage the inventory as the inventory ratio of the company is higher than its competitors in the environment. Resulting in which the company raises more than required capital so as to invest in the inventory. This aspect can affect the long term growth of the company (Jones, & Mowatt, 2016).
• In addition, it should be noted that company faces difficulty in managing adequate relations with its suppliers. The company faces difficulty in maintaining constant relationship with the supplies due to fluctuations in the environment and the trends. Resulting in which, the interest of suppliers also changes in the NZ environment. Ineffective relations with the suppliers are making it difficult for the organization to attain the material at cost effective rates in the environment. The organizational structure of the company does not relate with the future opportunities that the company might get in the business environment. The organizational structure only relates with the current business model and it will not support the future expansion of products of Woolworths (Chen, Flint, Perry, Perry, & Lau, 2015).

System theory of management is one of the most dominant theories present in the environment that focuses on the approaches to interact with the internal and external environment using inputs and outputs. This type of theory helps the organization to open up with the environment and attain efficiency in it by using all the available resources. The focus of this type of theory is laid on the concept that initially the firm should understand the environment and the system in which they are working. A system is a set of distinct parts that works together to create a whole complex thing for the business (Morgeson, Mitchell, & Liu, 2015). A system for a business can be either closed or open; the environment does not affect a closed system whereas an open system is affected by all the attributes present in the environment. According to the system approach, the environment keeps on evolving and emerging on the basis of several attributes. Further, this theory also states that arrangement of and relationship between the parts that connect the pieces into a whole work is crucial (Rutherford, & Meier, 2015).

System Theory of Management

Mutual interaction is the key that focuses on the structure and functions of the system. Presence of mutual interaction in an organization on the basis of business structure can easily help them to evolve and attain profitability as well. The systems of an organization are directed towards the goal and initiate feedback in the environment. Each and every part of the system is interdependent and all these parts should work together to help the organization attain their maximum level of benefits in the environment. This theory assumes that the organization in the business environment grow due to collective work and efforts of the employees. Mutual relationship is the key in making the organization successful in the business environment (Joyce, & Paquin, 2016).

Business model canvas is a strategic management model that helps the business in quickly analyse the business functions and circulate effectiveness in the environment. There are several aspects explained in the business model canvas of an organization, these aspects are partners, key activities, value proposition, customers relationships, customer segments, key resources, channels, cost structure and revenue stream. This model helps the organization in filling out all the important details of the business so as to analyse the weak areas or the areas where there is scope of improvement (Dudin, et. al., 2015).

This canvas helps the business to create connections between different departments so as to drive effectiveness for the customers of the company. This model helps in analysing that what kind of customer decisions influence the organization and how they make use of such information in their business. The canvas has several segments under which all are equally important and give crucial information about the company and its practices. The canvas helps in solving the business problems and analysing the resource that are unused and hold the capacity to improve the conditions of the business. The business should make use of these theories and models to improvise the position of Woolworths in New Zealand (Antikainen, & Valkokari, 2016).

Management refers to the process of doing the things right in the environment and leadership is the process of doing the right thing. Therefore, it emerges as the responsibility of the leader to do the right thing in the environment and at the same time make the employees perform right actions as well. Woolworths in the current environment of New Zealand is facing struggle in succeeding its market share because of the duopoly market structure (Matthews, Carsten, Ayers, & Menachemi, 2018). The company Foodstuffs is emerging in the market and is using new opportunities to increase the profitability of the business. Therefore, it is important for the leader of the company to initiate actions that help them to succeed and maintain growth and profitability in such strict competitive environment as well. The initial role of  manager in the dynamic business environment is to plan the future actions while forecasting the demand in such a way that growth is attain and opportunities are availed by the organization. It is the role of the manager to plan the actions in such a way that the business efficiently makes use of all the available resources in the environment (Reina, Rogers, Peterson, Byron, & Hom, 2018).

Mutual Interaction in Woolworths

Secondly, it is the role of the manager to organize each and every action in such a way that no employee feel burden of work and the manager makes all of them to perform their duties effectively. Thirdly, it is the role of the manager in dynamic business environment to lead and control the ineffective activities from happening. The leader of Woolworths need to delegate authority and responsibility in the environment so that the employees can work effectively, further, they are need to manage the actions in such a way that there is presence of no wastage of resources and energies of the employees. It is important for the leader of Woolworths New Zealand to control the actions of the employees so that they can stick to the business objectives and perform only those actions that upgrade the level of profitability of the company in NZ environment (Chiu, Balkundi, & Weinberg, 2017).

Conclusion

Thus, in the limelight of above mentioned events, the fact should be noted that the report highlighted information about the company Woolworths and the struggle faced by the organization while working in the market of New Zealand. The company works in the duopoly market structure that shows high degree of competition in the business environment. The company is constantly facing this struggle to settle in the environment of New Zealand because of tough competition and the organization has started to lose its position. Therefore, it was time for the organization to initiate actions and management strategies that can help them to implement growth in the business environment. Application of management concept and strategies would help the organization effectively make use of strategies to succeed in NZ environment and initiate competitiveness as well. Application of system theory will help the organization accurately make use of all the resources and introduce it in the system to increase its competitiveness in the environment. While the application of business model canvas for Woolworths would help the organization to relate all the functions of the company and increase the efficiency by using them effectively. Thus, with the help of below mentioned recommendations, Woolworths should aim to eliminate issues in the business environment.

Below mentioned are the recommendations for the company Woolworths that the leader should use to succeed in the dynamic environment of NZ:

• The leader of the company should analyse actions implemented by the competitors in the business environment and them implement business actions accordingly. This will help the organization to effectively initiate market research activities to find out the details about the opportunities available to the company.
• Further, the business should also make use of business model canvas and value proposition model to eliminate the level of competition in the environment. These management models would help the organization to successfully initiate activities to let the customers know about the products and services that the business offers to the customers in the external environment. This would help the organization to attract the customers and offer differential services to them in the business environment (Plenter,  Fielt, Hoffen, Chasin, & Rosemann, 2017).
• Lastly, it should be noted that the business should also make use of system theory in the environment so as to formulate relations between all the functions of the company and make use of all the available resources to drive success for the business. This theory would help the organization to eliminate the issues by addressing the interest of clients by providing them products and services accordingly.

References

Antikainen, M., & Valkokari, K. (2016). A framework for sustainable circular business model innovation. Technology Innovation Management Review, 6(7).

Business Model Canvas for Woolworths

Bailey, J., Price, R., Pyman, A., & Parker, J. (2015). Union power in retail: Contrasting cases in Australia and New Zealand. New Zealand Journal of Employment Relations, 40(1), 1.

Chen, E., Flint, S., Perry, P., Perry, M., & Lau, R. (2015). Implementation of non-regulatory food safety management schemes in New Zealand: a survey of the food and beverage industry. Food control, 47, 569-576.

Chiu, C. Y. C., Balkundi, P., & Weinberg, F. J. (2017). When managers become leaders: The role of manager network centralities, social power, and followers’ perception of leadership. The Leadership Quarterly, 28(2), 334-348.

Dudin, M. N., Lyasnikov, N. V. E., Leont’eva, L. S., Reshetov, K. J. E., & Sidorenko, V. N. (2015). Business model canvas as a basis for the competitive advantage of enterprise structures in the industrial agriculture. Biosciences Biotechnology Research Asia, 12(1), 887-894.

Humayun, S. H. (2016). Merchandising operation of Woolworths Global Sourcing.

Jones, G., & Mowatt, S. (2016). National image as a competitive disadvantage: the case of the New Zealand organic food industry. Business History, 58(8), 1262-1288.

Joyce, A., & Paquin, R. L. (2016). The triple layered business model canvas: A tool to design more sustainable business models. Journal of Cleaner Production, 135, 1474-1486.

Luiten, C. M., Steenhuis, I. H., Eyles, H., Mhurchu, C. N., & Waterlander, W. E. (2016). Ultra-processed foods have the worst nutrient profile, yet they are the most available packaged products in a sample of New Zealand supermarkets. Public health nutrition, 19(3), 530-538.

Matthews, M., Carsten, M. K., Ayers, D. J., & Menachemi, N. (2018). Determinants of turnover among low wage earners in long term care: the role of manager-employee relationships. Geriatric Nursing, 39(4), 407-413.

Morgeson, F. P., Mitchell, T. R., & Liu, D. (2015). Event system theory: An event-oriented approach to the organizational sciences. Academy of Management Review, 40(4), 515-537.

Parsons, A., & Wilkinson, H. (2015). Retailing in New Zealand: Where Are We and Where To Next?. In European Retail Research (pp. 141-160). Springer Gabler, Wiesbaden.

Plenter, F., Fielt, E., Hoffen, M., Chasin, F., & Rosemann, M. (2017). Repainting the business model canvas for peer-to-peer sharing and collaborative consumption.

Reina, C. S., Rogers, K. M., Peterson, S. J., Byron, K., & Hom, P. W. (2018). Quitting the boss? The role of manager influence tactics and employee emotional engagement in voluntary turnover. Journal of leadership & organizational studies, 25(1), 5-18.

Rutherford, A., & Meier, K. J. (2015). Managerial Goals in a Performance?Driven System: Theory and Empirical Tests in Higher Education. Public Administration, 93(1), 17-33.

Scherer, A., (2010). Big two supermarket chains locked in fierce food fight. Retrieved from < https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10637239 >