The paper "Woolworths Situation Analysis" is a perfect example of a marketing case study. Woolworths is an Australian company that operates in the retail grocery market controlling a considerable market share compared to its competitors such as Aldi and COSTCO who are rising rivals among others such as IGA’ s and Foodlands. Woolworths just like any other company faces competition and is affected by factors outside its environment. This paper seeks to present a situation analysis of Woolworths as the target brand and its strategies towards achieving a competitive advantage in the face of increased competition from rising ALDI and other rivals such as Coles Myer and COSTO.
In Australia, retailer’ s competition has enabled delivery for the consumers through reduced prices, rapid innovation, and better access to most goods. Different reforms in the market have created competitive and healthy markets which have been beneficial to consumers. This paper, therefore, discusses Woolworth as a target brand within the Australian market, analysis of the external environment, and an analysis of the Political, economical, sociological, technological, legal, and environmental (PESTEL) forces. Introduction Consumer needs have been rapidly evolving necessitating companies to develop innovative marketing approaches towards achieving a competitive advantage.
Woolworths experienced failed marketing strategies and a drop of 35% in profits in 2015 making the business establish innovative ways to compete effectively with its competitors Coles, rising Aldi, COSTCO, and Foodlands. Different factors contributed to these failures such as the low prices from other players like Aldi (Business Think, p.5). Consumers, therefore, chose the cheaper brand equivalents and Woolworths was no longer a shopping preference. A consumer group reported a great difference of over 50 per cent between ALDI and Woolworths.
Price is an important aspect of marketing that can greatly determine the overall success of a marketing campaign. For instance, Woolworths introduced an innovative program to bring back customers while at the same time retain the existing ones. The promotion of low prices was further aimed at promoting customer loyalty thus improving the brand towards gaining a competitive advantage (Australia Competition & Consumer Commission, p. 24). This paper provides a situation analysis of Woolworths by focusing on competition issues in the Australian supermarket retail industry. Statement of the Problem Woolworths needs to strategize in order to compete with both rising rivals and other major competitors to achieve a competitive advantage.
It is evident that Woolworths must ensure effective marketing methods to thrive in a highly competitive market. Rising competitors like Aldi and others such as Coles Myer, Foolands, and IGA’ s have launched similar marketing techniques focusing on the price reduction and therefore Woolworths must seek other innovative and unique approaches that will not only boost sales but also win back customers and develop their brand loyalty.
This would ensure the achievement of a considerable market share and sustainable growth in this highly concentrated retail grocery market in Australia. The giant supermarket retailers Coles and Woolworths have experienced criticism for their aggressive pricing tactics and market control over their fresh produce and foods. In fact, other competitors such as Aldi and COSTCO who have focused on meeting consumer needs appealing to them. This negative publicity has prompted some reaction from various quotas, including a defensive 2008 proclamation titled “ The Facts About Grocery Retailing” in which Woolworths notably emphasized their low-profit margin and a relatively small share of the fresh food market (Woolworths Limited, 2008).
Surprisingly, this statement also indicates customer dissatisfaction with Woolworths’ produce: this fact sheet postulates that 71% of their customers’ fruit and vegetable expenditure is spent externally from Woolworths (Keith, P.16).
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News.com.au 2015, Why Woolies is Failing in the Supermarket Wars, viewed 15 August 2016, http://www.news.com.au/finance/business/retail/why-woolies-is-failing-in-the- supermarket-wars/news-story/95ec07c0ab9b4c5c841ae489a4bd744f
Porter, M, 2008, The Five Competitive Forces That Shape Strategy, viewed 15 August 2016, http://www.exed.hbs.edu/assets/documents/hbr-shape-strategy.pdf
Woolworths Limited 2014, Response to Competition Review Issues Paper, viewed 15 August 2016, http://competitionpolicyreview.gov.au/files/2014/06/Woolworths.pdf
Woolworths Limited 2015, Afresh new offer in home Improvement, viewed 15 August 2016, http://www.woolworthslimited.com.au/icms_docs/128788_Woolworths_to_enter_24_bill ion_hardware_sector_-_Presentation.pdf