The paper 'Woolworths Finally Gets Incentives Right' is a great example of a Management Case Study. The strategy is a clear plan that provides companies with a chance to achieve competitiveness. The following report gives analyses the nature of strategy, its relation with value, industrial analysis, and resources and capacities with reference to Woolworths Limited. The report seeks to give an insight into the importance of strategy and various issues involved in its development. 1.0 Introduction The strategy is a clear plan that seeks to transform a company into the desired state in a definite period of time.
The strategy is normally focused on increasing an organization's competitiveness and ultimately sustainability. Ideally, strategic management is an important practice for both profit and nonprofit organizations (Singh, Garg & Deshmukh, 2008). In the wake of increased competition in the global business environment; it has become imperative that organizations develop and implement innovative strategies that enhance their capacity to edge out their competitors. Woolworths Limited is one of the largest and successful companies in Australia. The company has been able to venture into diverse industries and its retail business is key to its success.
The following report gives analyses of various elements associated with business strategy with reference to Woolworths Limited. 2.0 Woolworths Limited – Company Background Woolworths Limited was established in 1924 and opened its first store Sydney Australia. Back then, the company was headed by Percy Christmas; it’ s a founding chief executive officer (Woolworths Limited, 2015). The company was established with the objective of providing customers with an ideal place where they could purchase good things at a cheap price. Since then, the company has risen to be a major company in Australia in addition to global expansions in other countries (Woolworths Limited, 2015).
Currently, the company has operations in food, liquor, hotels, petrol, groceries, consumer products, and general merchandise. The homegrown company serves about 28,000,000 customers per week and has over 3000 outlets in its Australian and international operations (Woolworths Limited, 2015). Looking at the company’ s tremendous growth since 1924, it can be acknowledged that strategy has played a key role in shaping the company into what it is today. Its current strategies are expected to sustain this growth in addition to making it more competitive.
The following sections will give an in-depth analysis of various issues associated with a strategy with reference to Woolworths Limited. 3.0 Analysis 3.1 Strategy The strategy is a plan aimed at enabling an organization or individual entity to achieve a specific set of goals within a definite period of time (Peng, Wang & Jiang, 2008). As such, strategy normally takes into consideration the current state of an organization and develops a plan on how to organizational capacity towards achieving a specific target in a specified period of time.
On this point, it is important to give an insight into the ‘ double loop’ strategy as practiced by Woolworths Limited in the past decade during the leadership of the former chief executive Roger Corbett. The double loop strategy held more value on sales volumes and not margins. As such, Woolworths was able to compete effectively in the market using its low pricing strategy. During this period, Woolworth Limited enjoyed remarkable success with the company’ s share price increasing by 400% in addition to a high rise in dividends (Addis, 2015).
This strategy by Roger Corbert, regarded to be one of the most successful CEOs to lead Woolworths Limited in recent times, drove sales volumes and ultimately profits that were later reinvested into driving prices lower. Under this strategy, the savings made from the implementation of the strategy were passed on the customers (Addis, 2015). Therefore, it can be acknowledged that the ‘ double loop’ strategy was focused on achieving a specific set of objectives, low prices, high sales volumes, and increased profits, and outlined how the company would make use of its organizational capacity to achieve the goals of this strategy.
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