An internal review of an organization is considered crucial as itdetermines its performance in the economy. The paper seeks to conducta SWOT Analysis of Woolworths Holdings Ltd, explain how the toolhelps to solve problems within the company and conclude by providingrecommendations for the management team.
SWOTAnalysis of Woolworths Ltd
One of the oldest and pioneers of modern retail trade model in the industry.
Strong brand name.
Cheapest retailers in the market
Operates various subsidiary companies.
Massive product recalls.
Limited global presence as compared to its competitors.
Slow in embracing new technology
Failure to sustain its competitive advantage in the market.
Focus on strengthening its online retail presence.
Ability to sell its commodities at low prices
Engage in brand promotion through advertisements.
Embrace growth through acquisitions and franchise in emerging economies.
Stiff competition from rival international firms such as Wal-Mart.
Increasing costs of raw materials that affect profit margin.
Unstable economic conditions such as recession that could limit its growth strategy
Woolworths Holdings long history in the retail industry gives thecompany adequate experience on how to conduct its operations since ithas endured varying market periods (Munson, 2013). The firm alsopossesses a strong brand that the management can use to increase thenumber of loyal customers. Since the organization is considered to beamong the cheapest retailers, it is capable of growing its clientbase. Woolworth’s subsidiary firms also allows it to expand itssales volume by acquiring more customers in the foreign countries(Munson, 2013.
Woolworths need to focus on the quality and standards of its productsbecause it has engaged in massive product recalls from distributioncenters, which creates a shortage in the market. The company hasfailed to open adequate branches across the world enabling itscompetitors to grow in the international platform. Woolworths hasalso been slow in embracing new technology. For instance, it enteredthe online market late which forced the firm to lower its prices toattract consumers (Brown, 2015). Woolworths has failed to sustain itscompetitive advantage because of poor leadership within theorganization (Munson, 2013).
The company is capable of achieving more growth by strengthening itsonline presence, promoting its brand through media channels, andengaging in acquisitions and franchise in emerging economies.Embracing new marketing techniques such as the use of social mediaand other online platforms can help to create awareness about thefirm in the developing markets (Brown, 2015). Besides, since theorganization has eliminated intermediaries by acquiring productsdirectly from farmers, they can afford to lower the prices of theircommodities to that of rival companies (Munson, 2013).
The primary threat affecting Woolworth is competition from otherinternational companies such as Wal-Mart and Tesco (Munson, 2013).The rival firms are likely to acquire a leading position in theretail industry if Woolworth fails to address its issues. Otherthreats include unstable economy, legal requirements, and increasedcost of raw materials that may affect the growth and profit margin ofthe company.
How SWOT Analysis tool Addresses Problems within Companies
Marketing and management teams of a company such as Woolworths needto have a better understanding of their firm. Therefore, when theystudy their internal environment, they get to comprehend severalissues better such as the performance of the organization. The toolpromotes discussion among the two teams, which enables everyone to beon the same page. The members can brainstorm on ways to tackle theidentified threats and weakness, thus driving the business to success(Fleisher & Bensoussan, 2015). The analysis tool focuses ondifferent sectors of a company. For instance, at Woolworths, itreviewed the sales and marketing, manufacturing, and the distributiondepartments. Therefore, solutions to the identified problems withinthe various sectors can be achieved through open information exchange(Fleisher & Bensoussan, 2015). The workers get to collaborate andeliminate any form of disagreements which creates a better workingenvironment within the organization.
Recommendations for the Management Team
Based on the findings of the SWOT Analysis, the management team needsto develop strategies for Woolworths that are focused on promotinggrowth and improving its competitive position. The company appears tohave many opportunities that it can explore that would enhance itsperformance in the global market. The management also needs to ensurethe firm abides by all business laws and product standards toeliminate the constraints that the company is experiencingparticularly from the commodities recall.
In conclusion, the analysis of Woolworth Ltd highlights variousstrengths, weaknesses, opportunities, and threats affect the overallperformance of the company. The management can overcome the problemsby using the tool to have a better understanding of the firm,fostering collaboration among the various sectors, and encouragingdiscussion among the team members.
Brown, S. (2015). Incorporating brand into your investing. Finweek,43.
Fleisher, C. S., & Bensoussan, B. E. (2015). Business andCompetitive Analysis: Effective Application of New and ClassicMethods. New Jersey. Pearson Education.
Munson, S. (2013). Woolworths – carving a resilient niche. Finweek,38.