Critical Issues of Business and Management

Question: Discuss about the Critical Issues of Business and Management. Answer: Introduction: The Australian retail industry has one of the largest amounts of employees; around 10.7% of the total working population are employed there. To examine the issues, regarding business and management, one has to assess the internal contextual factors that have an impact on a business decision making. In this essay, the Australian retail company Woolworths Limited, which is one of the key players of the industry, is critically analysed. The retail industry has always been competitive, which led to better access, lower prices and rapid improvement ("Woolworths Supermarket - Buy Groceries Online", 2016). Here, the essay analyses the emergence of the particular organization, the influence of the environment forces on the company, and the several risks related to a business in the light of the business practices of Woolworths Limited. Woolworth Limited is an extensive retail company in Australia that deals with the communities to attend sustainable livelihood, also provides the opportunities in empowering future generation. The first store of Woolworths was opened in 1924 in Sydney, as a basement outlet. Through the application of the right business policies, now it has a 31% market share and became one the largest supermarket chain in Australia. The company deals as a food, Petrol and Liquor Consumer and general commodities retailer and functions in the hospitality and graining region. There are over 800 stores and around 1, 90,000 employees to serve almost 13 million customers a day ("Woolworths Supermarket - Buy Groceries Online", 2016). The concerning aim of the company is to offer quality products in lower prices through the Quality Assurance Programme and by resourcing the majority of unprocessed materials from Australia and New Zeeland. The retail company has also expanded globally and it has joint venture agreement with an Indian superstore chain TATA and generated the sales revenue of $104 million in the financial year 2007-08 (Cant, Wild Sephapo, 2016) Woolworths is one of the few companies in the market that offers organic products to the consumer, and this company only has its nearest competitor Coles, and both controls 23% of the Australian market. The emergence of the retail company is due to few socio cultural developments affecting the awareness of the consumers. (Dwivedi et al., 2012) The influence of the internal and external environment has a deep impact on the companys work procedure. The impact can be illustrated with a SWOT Analysis, consists of the identification of the organization strengths, flaws, opportunities and threats both externally and internally, affecting the society in a large amount. The primary strength of Woolworths Limited is that, it is one of the pioneers in the retail industry and one of the oldest one to introduce the modern trade model, therefore, it is a well-known name on a global basis. It also deals with well-accepted brands like, Lady Bird, Chad Valley. Woolworths also operates several subsidiaries like Entertainment UK. The resources of the company is influenced by the external situation that implements a minimized Carbon Footprint and finds cost efficient ways to reduce packaging and achieved zero food wastage by 2015 ( Arli et al., 2013) Besides the strengths of the retail company, Woolworths also has few weaknesses that affect the ability of dominating the Australian market. The Australian Government restricted its movement to keep the higher price of the goods in association with Coles. This is the most important weakness, the brand has, in support with its higher development levels (Holt, 2013) The major opportunity with Woolworths Limited is that, the retail industry is a blooming one across Australia and has a good development potential. The factors like advances in supply management, computerisation, and consumer lifestyle have an effect on the abilities of the retailers and leads to better opportunities to expand in the market. Woolworths has already initiated few strategies of retailing to cope up with the changing requirements of the consumers (Cant et al., 2016). The threats that may hinder the Woolworths Group are the increasing costs of the raw materials from both food and non-food may have an adverse impact on the profit margin of the company. The economic recession may also hold back the overall growth policy of opening more stores; neck-to-neck competitions by other international companies like the Coles Supermarket, TESCO, ALDI, WALMART, Macro Wholefoods Ltd, etc. The major threat to Woolworths is the expansion of low-priced supermarkets such as Aldi and the escalation of other large international rivals (Zutshi et al., 2016). ALDI has more than 10 percent but Woolworthss is still ahead with its profit margin of greater than 5 percent in food and liquor. The rival companies have been operating in these markets for a long time and so it is obvious that there will be further margin pressure and price-cuts within the retail industry in Australia (Shine Lee, 2015). The Risk and Compliance Committee of Woolworths Group provides assistance to the board in ensuring that the management body has an effective risk management process acknowledge the company in an incorporated manner. The management is responsible for identifying and managing risks. Management forums are established to ensure that the management with proper and efficient skills and experience deals with the risks. The Group has formulated its 3-years growth strategy based on the new Lean Retail operating model. The program concentrates on three essential areas developing customers and market shares, improving efficiency and its cost position (Santos, Padin Hogvold, 2015). Woolworths revised its value and price strategy which involves lower pricing, improved ranging, new strategy for improving its own brands and improved offers to customers so that they put Woolworths first. In order to retain its position in the market, Woolworths has established a new segment namely, Woolworths Food Co. This new division is under the responsibility to develop categories of fresh and new products, improve the supply of fresh meat and improve the processing facilities, and rebuilding relationship with the primary industry partners of Woolworths Group. One of the strategies of Woolworths is to redecorate 8- of its stores per annum for the future. The refurbishment shall be designed based on the preferences of the customers and priority shall be given to areas where the customer potential is the maximum (Rollins, 2014). Woolworths Group has announced that its food strategy would enhance the existing strength of the company as the largest domestic online retailer in Australia and New Zealand. The online pricing has been associated with store pricing and locations will be established for the dive-through for the better convenience of the customers. The companys investment in the customer offer will be based on the cost management policies ( Methner, Hamann Nilsson, 2015). The use of advanced and greater technology and innovative offers shall make shopping more convenient and enjoyable for the customers. The company promised that by implementing the 3-years strategy plan it will be able to serve all customer sections with the aid of multi-channel approach. This will ultimately help the company to make decisions according to the tastes and preferences of the customers. The organisations need sustainable development to survive in the competitive market. The prime factor of sustainable development is, having a vast range of product, which will do justice to the brand image of the company. The company Woolworths Limited has a broad chain and brand under them, which shows that they have a good organisational structure. The organisational structure includes Woolworths Online, Safeway, Food for Less, Flemings, Thomas Dux Grocer and Macro Whole foods (Holt, 2013). The company has also diversified its production in Liquor, Petrol, Hotels, General Merchandise and daily services (Cant, Wild Sephapo, 2013). Woolworths has become the renowned superior market chain in Australia because of its acquirement and the capability of expanding the business. In a recent analysis it is seen that it hold a share market of 31% (Dwivedi et al., 2012). Woolworths having various brands and diversified organisations under them but its supermarket industry returns back the mos t revenue in terms of sale. It has a vast area of expansion of organisations that make the geographic coverage wide. Woolworths has 3200 stores opened in Australia and New Zealand. 80 of those supermarkets are running in Australia and 156 supermarkets are running in New Zealand (Arli et al., 2013). In the fiscal year 2011, Woolworths Earning before paying Income tax was around $3.3 billion. This analytical data suggested that Woolworths is financially stable, consistent and strong which made them the top class organisation in the world (Jie, Parton Chan, 2013). In Australia, retail is not a smart industry centre as it is highly competitive and has low profit. Woolworths still manages to have a sales growth around 10.7% due to its planned business model and great functionality of management (Lewis Huber, 2015). Woolworths through its organized process of business has widely expanded its business amongst its customer and suppliers. The company worked according to its strength and integrated multiple activities in an inventive ways. Woolworths emphasized on flexible operations by combining and coordinating the multiple activities. The company aims on providing innovative product, which helps them to achieve the growth in a highly competitive market. Woolworths laid emphasis on keeping the commitments to its customer and have goodwill with them (Rollins, 2014). They also have the employee satisfaction and can retain the experienced employees, which helps them to achieve the desired growth. The main reason behind the growth and getting hold of the market is having the policy of Fair price, which increases the footfall of the customers in their supermarkets. Woolworths should imply correct steps for support and skilled employees by adding personal development training for them (Arli et al., 2013). The company has certainly good growth in terms of sales and earnings revenue but it should have an objective to implement listening, thinking, acting process, which increases more satisfaction for the customers (Rollins, 2014). This learning process helps to develop innovative ideas in attaining the customer satisfaction. Woolworths certainly have the best policies for attaining growth in a competitive market but it should lay more emphasis on employee satisfaction and development. 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