Woolworths’ Corporate Strategy Analysis 1.0 Introduction Corporate strategy can be defined as an overall plan of action developed by a leadership of a company to reflect its mission, vision and core values in its goals and business strategies to be adopted in achieving the goals (Colley & Doyle, 2002). It therefore means that a corporate strategy not only identifies the goals of a company but goes ahead to define ways in which the goals are to be achieved. The corporate strategy provides a clear path to be followed by all business units in an effort to meet shareholder expectations but also providing value to other stakeholders such as the customers and employees.
In light of this understanding, this paper discusses an article by Langley, (2013a) on Woolworths retail chain to analyze how the discussion by the article is brings out the application of corporate strategy by Woolworths. 2.0 Background information Woolworths limited is a big player in the Australian retail industry. It has its main interests in the retail industry being the largest retail industry in Australia in terms of market capitalization.
Woolworths was founded in 1924 by Percy Christmas and four other founding investors (Murray, 1998). Apart from the retail industry, Woolworths has also diversified into hotel and gaming industry. Since then it has been a story of perseverance as the company steered through tough economic times to become the retail giant it is today. Woolworths’ business unit consists of: Australian food and LiquorSupermarketsPetrolHotelBig W Consumer electronics In an industry where customer satisfaction is a primary focus of any company, Woolworths has been able to adopt many innovations to improve customers experience such as self-serve check outs, Woolworth shopping cards and discount programs.
The company has had to go the way of vertical integration in its supermarkets in response to stiff competition from it main rivals in the retail industry which are: Coles ALDIMetcash The vertical integration is mainly concentrated in food and dairy products (Burch, 2007). Recently the company announced plans to buy milk directly from dairy farmers in south Wales (Langley, 2013b). The plan will see the price of milk reduce and reflect in the final price to its customers.
According to Burch (2007), this kind of vertical integration is not new to the company nor in the Australian market since the company has been contracting farmers to grow its groceries in an effort to gain leverage when it comes to price based competition which is gaining root in the Australian supermarket sector due to increased competition. House brands of fast moving consumer goods is another way of ensuring lower prices for consumers while maintaining good profit margin for the company. The company is on a growth trajectory if it sticks to its strategy of using customer satisfaction as its center of focus.
Much of the company’s revenue is realized from its supermarkets sales. In the year 2012, the company made sales of $ 48,565.2 million. This is by far the most profitable of the groups operations since the total company’s profits in the same year totaled $ 56700.1 million (http: //www. woolworthslimited. com. au).