ARTICLE: SWOT Analysis of Woolworths Supermarket

Situational analysis of a company is a prime concern for its proper functioning and success. For this, the strategic planning tool is to be used for the analysis and the best analysis which can be carried out is SWOT. It is done by the managers of a company, and Woolworths Supermarket also follows it. The company begins by identifying important aspects, such as Strengths (S), Weakness (W), Opportunities (O) and Threats (T) that it possesses in its current environment.

Only the analysis of the strengths and the other traits is not sufficient. Reviewing it is also of extreme significance, and Woolworths carefully practice these two steps. It is one of the leading firms in the industry, and it has reached that level by maintaining its dominant position in the market.

Effective coordination among various departments of the company is required to be carried on in the interactive process of SWOT analysis. All the sectors of an organization i.e. marketing, management, finance, operations, information systems, and strategic planning have to function in coordination.

WHY IS SWOT ANALYSIS IMPORTANT?

The interactive process of SWOT analysis aids in the identification of the-

  1. internal strategic factors- It includes strengths and weakness
  2. external strategic factors- opportunities and threats fall under this category

SWOT Matrix- Both these factors when combined lead to the generation of a 2*2 matrix known as the SWOT matrix.

Also, it helps in the development of four types of strategies by the managers of Woolworths-

  1. SO (Strength Opportunities) Strategies
  2. WO (Strength Opportunities) Strategies
  3. ST (strengths-threats) Strategies
  4. WT (Weakness-threats) Strategies

STRENGTHS OF WOOLWORTHS SUPERMARKET

There are a number of strengths which help the company attain the top position in the market. They also help in penetrating new markets in addition to protecting the market share of the company in the existing markets. Fern Fort University-Extensive Research has found the following strengths of Woolworths-

  1. Consistency in the quality of the products at the company due to automation
  2. Strong Brand Portfolio is one of its strength
  3. Good returns on capital expenditure
  4. Reliable suppliers of raw material
  5. The strong distribution network of the company
  6. Successful in the execution of new projects
  7. Skilled and motivated workforce
  8. The culture among distributors and dealers

WEAKNESS OF WOOLWORTHS

The company does have some weak points where it needs to focus and work upon. Some of the weak areas of the company are-

  1. Limited compatibility of the organization structure with the present business model. This leads to a limited expansion of the products.
  2. Gaps in the range of the products sold by the company.
  3. Lacks in product demand forecasting. Therefore, the company misses various opportunities.
  4. High investment due to high days inventory thus, generating hurdles in the long-term growth of the company
  5. Lacks the ability to tackle the challenge
  6. Could only manage to succeed in the core business, not outside it

OPPORTUNITIES FOR WOOLWORTHS

  1. Government agreement in opening new markets
  2. Increased profitability due to new taxation policy
  3. New customers from the online channel
  4. Decreased transportation cost due to lowered shipping price
  5. Increase in the customer spending and economic uptick due to the slow growth rate in the industry

THREATS TO THE COMPANY

  1. Irregular innovative products supply
  2. The increased cost of the raw material affecting its profits
  3. Continuous fluctuations and different laws of product standards that may lead to lawsuits to be faced in various markets
  4. Paris agreement’s new environmental regulations that are a threat to the existing categories of the available products

LIMITATIONS OF SWOT ANALYSIS FOR WOOLWORTHS

Despite the existence of a strategic planning tool for the company, there are some limitations of the analysis for the organization.

  1. There are certain features or factors which act as strength as well as a weakness for the company
  2. The analysis paves no way for the competitive advantage and its achievement
  3. It's just an overview of the discussion of the implemented strategies
  4. It offers only a few changes according to the perspective

This was the strategic planning tool of Woolworths. You might be interested to read: the marketing strategy of Woolworths.