Strategic Analysis

 Introduction 

The idea of strategic analysis mainly refers to the different methods and procedures that are being used to research a particular company and the situation of the industry where the company is conducting its business operation. The report provided below provides a substantial amount of knowledge on the internal and external analysis of a company named Woolworths Group that specializes in the retail sector. The external analysis would shed light on the potential of the industry and the influence of the macro-environmental factors on the business functioning of the organisation. The report would also focus on the different opportunities and threats that the company is subjected to. On the other hand, the internal analysis of the company led to the understanding of the availability of the resources for their operations and in the proper analysis of the company’s core competencies.  

Part 1- External Analysis 

1. Business background 

2. What industry is it? 

 the current scenario, the retail sector of Australia is facing challenging circumstances mainly due to high levels of competition and because of increasing digital disruption. However, some of the major retailers have managed to ensure that they can transform the challenges and utilize them as one of their strategies by formulating a plan that would aim at enhancing productivity and profitability of the organisation. The retail sector of Australia will also be able to employ almost 8.9% of the population. It indicates that the industry will be accustomed to the growth of 1.7% per annum in the next five years. The retail industry highly contributes to the economic stature of the country. In the year of 2012-13, this particular industry contributed almost 4.5% to the GDP of the country (Growth, 2018). The retail sector has one of the youngest age profiles of all of the industries. In addition, the industry is also very diverse, and they have a coordinated approach to workforce development. 

4. The industry environment  

The strategic management tool that is being used for the understanding of the industry environment for Woolworth’s group is Porter’s five forces. It also allows the understanding of the influence of competitive forces in influencing the profitability of the company. 

Supplier Power 

For the operations of Woolworths Company, the supplier power has been identified to have a low impact on the functioning of the company as to ensure the proper management of their supply chain; the company can approach multiple suppliers of raw materials and for products from different brands as well. 

Buyer Power 

The power of the buyers has been estimated to be from moderate to high, thus implying that the customers can seek more offers and discounts for the products available in the stores. The customers are the key stakeholder of the company, and it provides them with the opportunity to ensure that they can avail products at best prices possible (Bamiatzi et al., 2016). 

Potential Entrants 

The threat of the potential entrants in the industry is low because the industry is already equipped with a sufficient amount of companies that have been able to gain a huge customer base. The company has, however, managed to eradicate the threat of these competitors and safeguard its competitive edge. 

6. Opportunities and threats 

The opportunities and threats are being identified as the external strategic factors of the company that allows them to identify the potential options and coercion that could influence their operations. According to Bailey et al., (2015), the opportunities and threats of the company are as follows:

Opportunities

a The increase in the prices of the raw materials poses a threat to the supply chain of the company

Part 2- Internal Analysis and Proposal 

1. The firm’s resources, tangible and intangible