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Woolworths analysis

The existence of Internet technology has provided many benefits for traditional companies since they can reach wider markets since Internet is virtually accessible by worldwide audiences. Taking advantages of the matured internet technology, Woolworths set up online stores at http://www. woolworths. com. au/. In order to analyze the company’s position in retailing market, this paper use several analysis tools; they are Porter’s Five Forces, SWOT analysis, and competitive strategy.

In Porter’s Five Force, the rivalry in Australian retailing industry put Woolworths in highly fierce environment since they face two types of competitors: general retailers and special retailers. General retailers include Coles Central, Franklins, and specialized retailers in electrical and electronic goods; gardening retailer. In terms of buyer powers, Woolworths face two kinds of forces; they are size of buyers, which is considerably high because customers have many choices; and number of buyers since customers has control to force retailers to sell particular products.

In competitive strategy, the company is found to possess eight competitive advantages; they are lean organization, enhancing customer prepositions, developing product availability and inventory management, low prices, revising unprofitable segments, developing and distributing retail expertise, strengthening the entertainment business, re-design e-commerce activities. 1. Introduction The invention of WWW (World

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Wide Web) in 1990s by Tim Berners-Lee becomes significant hallmark in information technology and also in commerce since the technology immediately adopted by business to increase their sales.

According to W3 Consortium (2007), the attractiveness of World Wide Web has driven business to regard it as the platform when conducting electronic commerce. Immediately, the matured Internet technology spawns many online or dotcom companies because the technology provide new entrants effective medium to target customers while minimizing or eliminating the needs to set up representative office that costs a lot. In addition, it also provides opportunity to reach customers in foreign countries since internet is virtually reachable by customers in any places in the world.

Also read about success factors of Woolworths

In Australia, to be precise, online commerce also shows good future that drives not only new entrants that purely become online companies but also current brick companies Coles Central, Franklins, to name a few. Figure 2 exhibits the major players of retailers in the Australia that directly compete with Woolworths. The companies are not pure online retailers since they grow from brick-type companies that already exist in many locations throughout the Australia. One of retailers in Asutralia that serve customers both online and through traditional stores is Woolworths.

The retailer, established in 1920s commenced their operation in 1924 where the company open first store in Sydney, Australia. After having sold various kinds of goods, about eight decades later in 1980s, Woolworths decides to focus on developing seven kinds of stores; they are supermarkets, liquor, convenience stores, petrol, general merchandise, consumer electronics, and former chains. The company is well known for their tagline, Fresh Food People, since the company is committed to continuously deliver fresh food to customers.

In order to compete with various kinds of competitors, the company also develops five brands; they are Woolworths, Safeway, Food for Less, Flemings, and Woolworths Metro. The vast products that the company serves put the company, Woolworths, to be a market leader in grocery retailing industry. To date, the company serves about 10 million customers weekly and incredibly, the company records outstanding performance by achieving profit from $8 million to $136 million in just two weeks.

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