Approaches undertaken by Woolworths Australia

Strategic management of organizations aims at undertaking different activities like planning, implementing, monitoring and controlling as per the different dynamic changes in the business environment. The competitive nature of the organizational functioning is based on the strategic planning and its implementation through an assessment of the different capabilities and competencies of the firm. In this connection, the research will be focusing on the study of the different strategic management approaches that are undertaken by the organization Woolworths while operating in the competitive markets.

The different approaches that will be discussed in the research are the stakeholder approach, dynamic capabilities and the sustainable approach of the business. The approaches will be helping the organization in planning the necessary steps that will be helping the same in maintaining the sustenance of the firm in the highly competitive markets. The identification of the approaches will be helping the organization in framing the different set of policies and implement different modifications as per the needs of the business to make progress in the competitive markets. The identification of the different capabilities and competencies of the organization in the planning phase assists the business’ management in undertaking different steps to avoid different uncertainties that might hamper the sustainability of the same.  

The major purpose of the research is to identify the viability, benefits, implementation issues and limitations that are faced by the organization through the implementation of the approach in the organizational context. It will be helping to understand the effectiveness of the approaches in the organizational context.

The Australian supermarket industry is highly volatile and based on the customer requirements predominantly. Therefore, all the retail business companies like Woolworths, Coles, Aldi and Metcash want to develop their business based on the customer preferences. In fact, the rivalry between Coles and Woolworths in the Australian supermarket industry is not a new phenomenon. In several times the Coles Supermarket outplayed Woolworths in the competition and monopolised the Australian retail market. However, every time Woolworths succeeded to overcome their failure and brought new strategies to the Company policy and operation.

In case of the sustainable approach price of the products considered to be an important aspect. In case of the Australian retail market low pricing strategy has been beneficial for Coles to dominate the market since 1980s. To keep retain its business in the high competitiveness, Woolworths keeps an eye on the product quality along with the log pricing strategy (Arup, Beaton-Wells and Paul-Taylor 2017). The tagline of the Company was ‘fresh food people’. This strategy was quite effective for Woolworths in the long run. Besides this, Woolworths also kept focus on its unique marketing policies. For an instance, they appoint celebrity chef Jamie Oliver as the brand ambassador for their promotional campaigns (Knox 2015). Those are highly beneficial for the company to retain its market image and compete strongly.

As a result of the measures taken by Woolworths, the company became able to attract more customers to buy their products. Moreover, the sustainable approach also incorporates the attitude of the business organisation towards Corporate Social Responsibility (CSR) and Green Business environment. As far as the CSR is concerned, Woolworths are known for their benevolent approach towards the local communities. For an instance, the organisation organised Drought Action Program for the affected farmers and raised a fund of $7 million in which the company donated the initial $1.5million in 2018 (Woolworths.com.au 2018). This helped the company to create a good image and at the same time build a strong supply relationship with the farmers.

Competitive Australian retail market

According to Hockerts (2015) there are a number of issues regarding the implementation of sustainable approach for an organisation. In that case, most of the issues related to the environment sustainability and CSR. The major problem regarding this is the huge expenses. In his research, Klettner, Clarke and Boersma (2014) proved that the sustainability measures are massively expensive and it causes some trouble for the organisations to maintain its sustainability practice. For an example, in case of the Woolworths, the company is compelled to stepped down from the cheap pricing policy due to its high expenditure in maintain environmental sustainability and donations to the local communities (Mortimer, G. and Grimmer 2018).

Moreover, Zhou (2018) argued that the sustainability measures also put a great impact on the existing organisational framework and practices. There can be both positive and negative impacts but the negative impacts are so intense that it can halt the natural growth of the company. In case of Woolworths, the company has succeeded to build a retail empire in the Australian retail market but the recent sustainability issue in terms of banning the plastic bags is seemed to be posed a detrimental impact on the operations of Woolworths. In fact, the company was supposed to use the 15c thick reusable plastic bags that are under the close observation of the environmental agencies and alleged to damage the environment more rapidly.

As per the study conducted by Pulker et al. (2018) it can be argued that most of the corporate organisations seeks to opt for the short term benefits and profits. Therefore, it leads to environmental degradation, employee exploitation and other cognate issues (Richards and Devin 2016). In fact, the low pricing policy of Woolworths also paved the way for sustainability challenges for the company in long run. Rather than taking more responsibility in order to shape an unique image Woolworths always tried to compete with its rivals directly. Therefore, the creative strategy and its effectiveness are missing in case of the sustainable approach of Woolworths.

In the retail sector stakeholders are considered to be placed in an important place that will help the companies to make a firm future establishment. In case of Woolworths, the organisation identified its major stakeholders in the form of the customers, the suppliers and government agencies. In case of the suppliers, the supermarket giant always tries to make a good relationship and effective supply chain management so that the supply will be uninterrupted (Grimmer 2018). Tight contract with the farmers is one of the major features that are followed by Woolworths. The Company is very specific about the size and quality of its products. Therefore, the farmers have to manufacture or cultivate products accordingly. Moreover, in case of the delivery of the products Woolworths maintains a time-specific delivery contract with the trucking companies. It is pertinent for the stores to get the delivery on time and maintain a professional attitude. On the other hand, Woolworths also follows the government regulations on the question of quality of the products and the workplace environment. By employing more workers in their new stores Woolworths helped a lot to the Australian government in dealing with unemployment issues for several years.

Sustainability and Corporate Social Responsibility

As a result of that the Stakeholders management will provide additional advantage to Woolworths to retain its growth in the intensely competitive Australian retail sector. In fact, putting emphasis on the stakeholders facilitates the company to conduct effective marketing analysis that will lead to expanding the business profoundly. For an instance, Woolworths always change its marketing strategies on the basis of current customer demands. Recently, the company shifts its gaze from the price preferences to the shopping convenient set up. The result was also emphatic and interesting. As per the report, it can be seen that 30% of Woolworths customers are stopped buying products from Coles because now they can easily get it from the convenient Woolworths stores nearby.

However, there are some issues that Woolworths have faced while incorporating the stakeholders in the process of their operation and marketing strategies. According to Willis (2015) involving stakeholders in the process of business fosters strategic advantage to the organisations but over representation of the stakeholders’ leads to affect the natural development of the company. In fact, Gross (2015) argued that it is the role of the business organisations to make the customers get used to with their products and convince them to buy the products rather than dominated by the consumers and do whatever they ask for. In case of the Woolworths, the company also follows the same line by procuring more thrust on the requirements and demands of the customers rather than freely take some bold decision and let the customers follow it. As a result of that the Australian retail market always felt the same volatile for Woolworths though it implements a number of new approaches on the basis of the customers’ demands.

Lack of understanding of the needs and demands of the stakeholders is considered to be a major flaw for Woolworths in order to establish a better relationship with them. It is true that high competitiveness in the Australian market restricts the company to go for some bold moves or firm decisions (Grimmer 2018). Nevertheless, Woolworths always treats the demand of the customers as the most valid point. Therefore, the interests of the farmers and other stakeholders remain silent and create grievance against Woolworths. In addition to this, the company should take into considerations the problem for the farmer to stick with the enlisted size of the products.

Dynamic capabilities refer to the organizational strategies, which assists in the different functions that are undertaken by the management teams of the business. It covers all the different aspects relating to resource allocation and assessment of the competencies and capabilities of the ventures (Wilden  and Gudergan  2015). This section refers to the different viability, benefits, implementation issues and limitations that might be faced by the organization- Woolworths, while undertaking the dynamic capabilities approach.

The viability of the approach is based on the identification of the radical discontinuous change in the business markets helps the management in implementing different favorable strategies for supporting the goal of organizational sustenance. The inter- trust factors and coordination among the employees and the management of the business helps in enumerating different strategies to support the dynamic capabilities of the organization to stand unique in the market. As per the case of the concerned organization, Woolworths, coordination of the employees with the management and the other departments of the business has helped in enhancing the productivity of the venture. On the other hand, the different strategies that are formulated by the managing boards of Woolworths also accounts for the active participation of the employees in the decision making process which results to the change readiness among the employees (Teece,   Peteraf  and Leih 2016). The viability of the approach is based on the long term objectives of the organization to achieve competitive advantage in the globalized markets. The key objects of the organizational functioning are based on the strategic planning based on the analysis of the competencies that are faced by Woolworths while operating in the globalized markets.

Challenges faced by Woolworths Australia

 The benefit that might be gained by Woolworths through the application of the approach in the globalized market scenario is due to the growth in the competitive edge of the business through suitable resource allocation and different dynamic strategies. The strategies will be helping Woolworths in balancing the functions as per the needs of the same to change in the international markets. Wilden  and Gudergan (2015) stated that the competitive advantage of the organization is dependent on strategic planning and resource allocation attributes, which affects the suitable operations of the  business.   Woldesenbet,   Ram  and Jones (2012) also added that the concept of dynamic capability in the organization context is based on the identification of the competencies  and thereby utilized in order to create short term competitive edge of the business.   The dynamic capabilities of Woolworths will be helping the organization in identifying the competencies more clearly and thereby assist the same in working on them to build on their long term objectives.

The different implementation issues that might be faced by Woolworths are due to the assumptions that are made by the organization while operating as per the objectives of the business to sustain in the international markets.  Denford (2013) stated that the assumptions play an important role in identifying the different competencies that might be faced by the business while operating in the different markets. Teece,   Peteraf  and Leih (2016) added that the identification of different competencies helps the organizations in identifying the probable ways through which the issues might be resolved in order to support the organizational goal of sustenance. Therefore, identification of different issues that might be faced by the organization while implementing the dynamic capabilities are through lack of proper assumptions on the competencies on which the organization will be framing its strategic systems.

The limitations that might be faced by the organization, Woolworths, while implementing the dynamic capabilities approach is due to the lack of suitable models and frameworks that might define the links between resources and capabilities of the business. It will be affecting the organizational decision making on the design of the strategies that might help the management in adding competitive advantage to the trail of the business. Teece (2016) stated that the lack of theoretical model affects the design and processes that might be considered by the business. Wilden et al. (2013) stated that the concept of dynamic capability in the organization context is based on the identification of the competencies  and thereby utilized in order to create short term competitive edge of the business.   However, Alegre (2017) argued that building on the short term objectives might often affect the organizational objectives of sustainability through short term financial gains. It affects the growth of the business. Nevertheless, Priem,  Li  and Carr (2012) noted that the application  of dynamic capabilities approach in the business functioning will be helping the organization in overcoming the different issues through strategic implementation of resources  which supports the long term objectives of organizational sustainability.

Conclusion and recommendations

Therefore, from the above discussion it can be concluded that the report rightly pointed out different approaches for a corporate organisation in order to establish its business profoundly and effectively. Moreover, the stakeholders approach, sustainable approach and the dynamic capabilities are detailed topics on which the organisation should have clear idea. It is also pertinent for Woolworths to have in-depth conceptualisation on those factors. However, it can be asserted that there are always be problem in several aspects that can perturb the healthy growth of the company but it is the responsibility of the organisation to take adequate measures and effective strategies to mitigate the challenges.

Based on this understanding, there are some recommendations that Woolworths must follow for its business growth. The recommendations are as follows,

1. Woolworths must focus more on environmental sustainability by putting emphasis on the energy saving techniques.
2. It will be better for Woolworths to shape the online delivery practice more efficient and effective.

• Engaging the stakeholders more extensively will lead to strategic advantage for Woolworths in the high competitive retail market in Australia.

1. The supply chain management needs to be more extensive and widened.
2. The high competitiveness is a major threat to Woolworths but the company should turn it into an advantage to introduce effective strategy with requirements. It will facilitate more flexibility to the organisational activities.

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