Design Environment And Principles In Businesses
Woolworths specializes in the sale of products in supermarkets. It operates in a very competitive environment where many companies are in the same field. Despite the odds, Woolworths has designed new models that have effectively improved its profitability, market share and expansion First and foremost the company has designed a new marketing methodology aimed at increasing the sales revenue/ turnover. One of the design principles it has adapted in relation to new marketing methodologies is promotions in form of free samples and trade offers.
The approach is setting their sales agents at strategic places who vigorously advertise their products in an open ground. At this point, prices are reduced for those who want to buy the products. The company has also modified the brands of some of its products to look attractive to the consumers. Customers are usually attracted to new brand names that suggest quality, and those with attractive symbols and logos. The other principle the company has used is how it does its packaging. New attractive packaging models are now being used.
They have various changes in the shape and physical appearance of the packaging materials, the colour mix of those materials. Lastly, Woolworths has moved from heavy reliance on the media for publicity purposes to other new principles. These include sponsorship of sporting clubs. In return the clubs print their items with the name “Woolworths”. The end result of this new marketing model is increased turnover rates as result of the created awareness. The other new model innovated by Woolworth is that of strategic planning.
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The company through its management is now reviewing its mission and objectives and defining the strategies which will accomplish the objectives. In order to achieve the objectives of the new model of strategic planning, Woolworths has identified various principles for this mission. First, the management is now analyzing both the internal and external environment with the aim of finding out how this environment affects its business operations. Through the analysis of the external environment, the company has now expanded by building more of supermarket chains.
It is also planning to enter into joint a venture with another company. With these principles of strategic planning Woolworth is sure of expanding its market share as well as improving on its profitability. The other principle geared towards strategic planning as one of its models is portfolio and risk analysis. Through the financial department the company has analyzed and obtained a new product mix that would reduce its risks like unsold products, product obsolescence etc.
This has been effected through an intensified market research on product use and consumer behaviour. Woolworth’s last new business model is service- profit chain. This is a model that emphasizes on people and their importance on the success of an organization. ‘People’ here means both the customers and employees of Woolworths. They have ensured that their employees are satisfied in terms of remuneration packages and the general working conditions, like safety and health.
The design principles behind realizing the objectives of the service –profit chain in regard to employees are: overtime payments, supply of protective cloth wear to employees, installation of additional fire – fighting equipments and proper safety and maintenance of machines. This has resulted into a motivated workforce and has seen the improvement of turnover from $m31354. 50 in 2005 to $m37734. 2 in 2006. The new model also focuses on the maintenance of loyalty of the customers. Every business must create and keep its customers.
This is the only way in which it can grow in terms of the profitability. The principles that Woolworth has designed for the service- profit chain in relation to customers are: selling high quality products and setting fair prices. The setting of fair prices has made customers to buy goods in bulk a factor that has improved profits. The company also ensures that there are no stock outs and that there is always a constant replenishment of goods. All these are geared towards maintaining the loyalty of their pool of customers thereby increasing its revenues.