Woolworth Business Report

Woolworths Business Report

Introduction

In order to describe and analyse Woolworths' environment in which the organization makes decisions related to marketing and management, we have to give consideration to the competitive environment that is in existence between Woolworths and Wesfarmers (Coles), the concept of rival duopolies and the role that managements of the competing companies play in this whole process. In a duopoly that exists between Coles and Woolworths, both firms compete and struggle for market share, so strategic thinking on the part of rival managements plays a crucial role in making marketing and management related decisions that ultimately affect the strategy development and the creation of a competitive advantage at Woolworths. The environment in which Woolworths operate hosts Coles, a major player that's why strategic management and marketing is imperative for Woolworths that allows the company's management 'to more fully analyze and capture the relevant forces crafting new business strategy requirements and market opportunities that eventually affect the marketing and management decisions al Woolworths.

Marketing Decisions at Woolworths to respond to its competitive environment

For many years, Woolworths has been a dominant player in the industry of Food and Staples Retailing but since Wesfarmers has been taken over by Coles, Woolworths management now find itself forced to be more in a defensive mode for competing better with Coles especially when it comes to the low-cost pricing strategy on many product items. The environment in which Woolworths operate, management team's quality and its ability to provide guidance for future to Woolworths has become the critical factor that differentiates and defines each firm's success and performance. When it comes to supermarket division, Woolworths' main weapon to successfully operate and compete in the industrial environment of supermarkets is cost leadership strategy. Woolworths sells standardized products (but with competitive differentiation level) that allows them target a wide-ranging customer segment. The competitive environment of supermarkets in Australia impacts the priorities of Woolworths when it comes to making decisions related to marketing and management. Through cost leadership strategy, Woolworths marketing endeavor is to offer better price to customers by lowering its costs in every area possible while maintain a competitive differentiation level from the products its competitors are offering (Beer et al., 2005).

Cost leadership strategy is a marketing decision on the part of Woolworths that allows the company to earn the above-average returns regardless of the existence of sturdy competitive forces. As company's major competitor Coles has also undertaken a similar marketing strategy within its supermarket division, a vigorous competitive rivalry has resulted that has made the business environment more intense for Woolworths as Coles is looking for nothing but to gain more market share and to take away the business from Woolworths. However, Woolworth is doing what it takes to stay competitive in every market it operates, not just in supermarket industry. For that purpose, Woolworths not just rely on its marketing strategy as traditional companies do whenever they face strong rivalry from another company or two. The company has designed its management framework that guides the ...