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Topic:

Woolworth's Strategic Analysis to Compete with Amazon in the Australian Grocery Market

Essay Instructions:

Please look closely at the red font section. The article needs to include theoretical knowledge and make a table. Some necessary links have been given. Also, the article needs least 10 references. Please feel free to contact me if you have any questions.

Scenario: Amazon is Disrupting Major Supermarkets

As a major player in the digital business space, Amazon has recently decided to enter into the Australian grocery market to compete with Woolworths and Coles. This is mainly done through a reduction in price to undercut the big supermarket chains. Some key facts and figures are presented below:

  • Amazon Australia is now undercutting the dominant supermarket chains by as much as 50 per cent on household staples and quickly capturing a foothold in the market

  • Some products are priced lower to consumers than the supermarket’s purchase price 

  • Supermarket giants are worried that brand owners are favouring Amazon as they can offer lower prices to customers (perhaps offering Amazon better terms)

  • Selling to Amazon at cheaper prices could adversely impact brands (pricing control and favour with major supermarkets)

  • Amazon has less than 1% of the online food and grocery market, which grew 39.7% over last 12 months (Nielsen 2018)

  • Amazon.com.au now has more than 2500 food and grocery products on its site

Your task

To adequately compete with Amazon and ensure that they do not take up too much market share, you have been hired as an external consultant by Woolworths to provide a strategy on how they can prepare and compete with Amazon appropriately. Provided below are several internal and external issues that Woolworths are grappling with that need to be solved. These are outlined below:

Several internal and external issues that Woolworths are grappling with that need to be solved. These are outlined below:

  • Social media ineptitude: Woolworths are worried that their social media interactions are insufficient and unengaging and that consumers do not have any desire to interact with the brand

  • Corporate staff insufficiently trained: The company has identified that not all their staff members are sure of how the online grocery ordering system works. This also extends to payment by suppliers

  • Price: Woolworths are unable to compete with Amazon on prices of particular products

  • Distribution: Woolworths has more effective distribution channels than Amazon already set-up in Australia but feel that Amazon is starting to make strong moves in this space. Not only that, but costs for the different buying channels for consumers is higher than simply operating online

    • As highlighted above, Woolworths have a number of worrying issues they need to deal with and that they see as a threat from Amazon. To assist Woolworths, you need to select 2 issues and develop innovative solutions to dealing with these issues. 

What does your solution look like?

  • Your solution needs to be innovative and draw on material and theory learned throughout the semester (e.g., we discuss the new consumer decision-making process… how can Woolworths use this?)

  • Your solution needs to be a step-by-step implementation guide with control measures highlighted along the process (control refers to different evaluative tools)

  • You need to consider costs and timeline (include a realistic budget based on evidence and a timeline of key activities)

  • Who in Woolworths should be implementing your solution (their role only…not their name)? Consider if a new role needs to be created, what would this look like?

  • Your solution needs to be based on evidence from both business and academic sources. In saying this, if you have a completely innovative solution to a problem that has not been thought of before, then this will be considered

What will you be marked on?

  • Two chosen issues and two solutions (one solution to one issue): Each solution is clearly and specifically stated. The solution is logically linked to the problem and is innovative. 

  • Implementation and control: A thorough and specific implementation plan is clearly identified for every solution.

  • Digital business theory: There is a clear integration of relevant digital business theory in solutions (i.e. systems thinking).

  • Sources of evidence: High-quality, credible, relevant sources to develop ideas that are appropriate for the development of solutions.

  • Writing style: Language is clear and expressive showing a strong writing style and without grammar, punctuation, usage, and spelling errors.

    • Other instructions

The word count for the report is 2000 words (+10%). You have a short word count which means you do not need to include an executive summary, introduction or conclusion. Instead, your focus needs to be on solutions and how you can best present this to Woolworths’ executives.

Additional Resources Business Analysis Report:

https://www.supermarketnews.com/issues-trends/survey-amazon-top-threat-disruptor-supermarkets

https://www.bloomberg.com/news/articles/2018-03-19/supermarket-casualties-begin-to-pile-up-in- amazon-fueled-battle

https://www.forbes.com/sites/christopherwalton/2018/08/03/in-the-era-of-alibaba-and-new-retail- amazon-go-may-have-a-fatal-flaw-that-limits-its-potential/#541a8c7824f0

http://fortune.com/longform/amazon-groceries-fortune-500/ https://www.marketingmag.com.au/news-c/news-amazon-grocery-pantry-australia/

https://www.news.com.au/finance/business/retail/how-big-an-impact-will-amazon-have-on-australia- maybe-we-should-look-at-what-happened-in-canada-rather-than-the-us/news- story/d546b7a0979f169f9b8160a7f549be0f

https://www.geekwire.com/2016/amazon-go-works-technology-behind-online-retailers- groundbreaking-new-grocery-store/

https://www.woolworths.com.au/shop/discover/shopping-online https://shop.coles.com.au https://www.amazon.com.au/b?ie=UTF8&node=5547635051

The issue

You list your issue and provide more understanding and justification around your solution, for example:

The issue at hand is poor perception of corporate social responsibility. According to Porter and Kramer (2011), CSR can assist in enabling shared value. The concept of shared value refers to generating a benefit to society and the business simultaneously (Crane et al. 2013). With this in mind, Woolworths should develop a partnership with a for-profit and not-for-profit organisations that address the issues of ethics around customer data collection. This innovative solution can then be communicated to customers to ensure transparency and subsequent social responsibility (Pomering & Dolnicar 2009).

Objectives

Here you highlight any objectives you think you want to address through your solution, for example:

Based on the above, the following objectives have been developed:


  • Objective 1: To develop a fully integrated partnership with 2 not-for-profit organizations over the course of the next 5 years addressing the areas of online bullying and secure customer data use.



Step 

Justification

Control Measure 

Role


1. Research whether consumers respond well to CSR communications from grocery chains

To gather insight into consumer sentiment towards CSR and the benefits this can bring

Sufficient evidence by way of secondary research has been developed to ensure knowledge of topic

Marketing coordinator


2. Investigate most effective communication mechanisms to reach large audience

This can assist in understanding the communication reach and best value for money 

Generate a list of 5 communication mechanisms and their reachability vs. cost

Marketing analyst


Here you would add in the step-by-step process

 

 

 





  • Objective 2: To increase awareness of social responsibility initiatives by 5% amongst the general public by end of 2022.


  • Objective 3: To increase CSR communication to one form of communication per fortnight amongst current loyalty card members.




Plan



To achieve these objectives, the following plan has been developed: 



 



Timeline







Activity

Dec-19

Jan-20

Feb-20

Mar-20

Apr-20

May-20

Jun-20

Jul-20

Aug-20


1. Research CSR perception

 

 

 

 

 

 

 

 

 

 


2. Investigate most effective communications mechanisms 

 

 

 

 

 

 

 

 

 

 


3. Here you would put in your steps and their anticipated timeline

 

 

 

 

 

 

 

 

 

 

Budget



Item

Cost

Justification


Radio advertisement production

$1250 p.w.

https://kissfm.com.au/media/kit


Here you would put in the items to develop a realistic budget 

Here you put in the costs of each item

Here you would put in your source where this cost was generated from
Essay Sample Content Preview:

WOOLWORTHS STRATEGIC ANALYSIS REPORT TO COMPETE WITH AMAZON IN AUSTRALIAN GROCERY MARKET
Student's Name
Course
Professor's Name
University
City (State)
Date
Table of Contents TOC \o "1-3" \h \z \u Woolworths Background and Competition PAGEREF _Toc40482558 \h 3Discussion PAGEREF _Toc40482559 \h 3Issue 1: Social Media Ineptitude PAGEREF _Toc40482560 \h 4Implementation and Control PAGEREF _Toc40482561 \h 6Issue 2: Corporate Staff Insuffiently Trained PAGEREF _Toc40482562 \h 6Implementation and Control PAGEREF _Toc40482563 \h 8References PAGEREF _Toc40482564 \h 10
Woolworths Strategic Analysis to Compete with Amazon in the Australian Grocery Market
Woolworths Background and Competition
With increasing competition, changing preferences of consumers and increasing population over the globe, retail industry strategically transform their outdated business operations and adopt innovation to be efficient and effective in the future. Similarly, Woolworths faces fierce competition in Australia from the giant online retailer; Amazon that urges the firm to execute modern marketing and distribution approaches to surpass in the market (Yang 2018). According to the report of Woolworth (2020), Woolworth has recognized name in the Australian retail market with 995 stores globally. Woolworths exceptionally maintain its quality of organic fruits and fresh meat by managing strong relationships with Australian farmers. Furthermore, identifying the shift from physical retailing to online retail, Woolworths adopted mobile application to target the market in Australia through online channels. In this rivalry, Woolworth faces complexities to boost its market share in the corresponding sector due to the involvement of other international brands in the market. Therefore, the company aims to formulate an active strategic plan to minimize its weaknesses and compete with Amazon to attain a competitive edge in the grocery industry.
Discussion
By overviewing Woolworth's performance dynamically, the company lacks in managing strong association with consumers through social media, has non-trained employees, high cost for distribution, and non-competitive pricing strategy to compete with Amazon. From the evaluation of Youl (2018), competition in the Australian grocery market is expected to incline further in the next five years, and for being competitive, Woolworths needs to expand its private-label products for attracting price-sensitive consumers. Additionally, the arrival of AmazonFresh can boost the sales in the grocery industry, and it is forecasted that the revenue margin will grow by 2.0% in five years that will reach to $114.4 billion in 2024. By focusing on the expansion of Amazon market in Australian with 2500 grocery and food products on the digital web, Woolworths aims to target the broader market than Amazon does with more attractive offers and digitalization by eliminating the identified weaknesses of the firm. With the concern on the digital transformation in Woolworths to compete with AmazonFresh online web in the Australian grocery market, Woolworths needs to focus on improving two weaknesses including lack of technical training among employees and limited engagement on social media channels.
Issue 1: Social Media Ineptitude
Weakness: In the contemporary retail sector, companies mostly concern about consumer's engagement with the company to target the appropriate market and attain high profitability. As per the research of Adaji and Vassileva (2017), Amazon actively uses social media tools to build a strong relationship with customers and update them about the latest products and services to offer them high value. However, Woolworths faces issues in dealing with social media campaigns and manage high engagement on social posts due to inactive accounts. Henceforth, it would be a threat for the company to lose its market share in Australian due to the lack of communication and resource awareness in the market because it urges consumers to shift their brand choice towards the more engaging one.
Solution: For resolving the issue of limited engagement through the social channels, Woolworths marketing team needs to take responsive actions in promoting secure communication with consumers by activating the social media accounts and using the appealing campaigns to inspire consumers. Hence, social media platforms and outlets are the most valuable, efficient and cost-effective measures to target consumers over the globe (Odoom, Anning-Dorson and Acheampong 2017). Therefore, concentrating on building social media engagement with customers and the formulation of creative pricing tactics are worthy of attracting the mass market.
Additionally, Woolworth creates social media outlet that helps the company to offer high accessibility and convenience to customers. Henceforth, the automated technology on social sites is extraordinarily useful for consumers to review the company and related products before buying. Besides that, Woolworth should create a robust digital community by engaging with its consumers through Facebook, Instagram, Snapchat, Twitter and other social links. Furthermore, Woolworths needs to prefer consumer feedback on social media channels to renovate the future services and products to value customers in the Australian grocery market. In this manner, investing in the social media campaigns that portray the quality of Woolworth's products and services to audience, engage with them and get their feedbacks to involve them in business activities for gaining attention from consumers. The following table highlights the objectives to resolve the issue of social media channels engagement.
Objectives

Justification

Control Measure

Role

Timeline

1. Create social media groups to build strong grocery chain community

The social media community is worthy of engaging with consumers and aware them about the latest products and services

Use secondary research to evaluate the influence of social media marketing in the e-commerce sector

Marketing Coordinator

Two months

2. Invest in the paid promotions of the group to attract more individuals and produce an online store through social media

This step is worthy of reaching more audience on the social channels and offering convenience and accessibility to consumers 

Generate three budget plans according to their reachability vs cost to manage engagement

Marketing Analyst

Four months

Budget
Item

Updated on
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