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In today's highly competitive and sophisticated business environment, budget oriented planning or forecast based planning methods are insufficient for the large organisation. The reason behind is that when a company adopts a strategy which is focussing primarily on growth and management skills needs to have a progressive outcomes. Therefore, a firm must engage itself in strategic planning that clearly defines objectives and assess both the internal as well as external situations to originate strategy, implements it, evaluate the progress and make adjustments as necessary to stay in competitive world. A strategic plan should:
Serve as a framework for taking right decisions or securing support / approval.
Provide basis for more detailed planning and implementation for the same.
Explain the business to others in order to inform, motivate and involve.
Assist benchmarking & performance monitoring.
Stimulate change and become building wedge for next plan.
To rigorously follow strategic planning, company has to undergo with the process associated with it. In the process of planning mission and objectives are highly important because it describes the company's business vision, that include the static values and purpose of the firm and forward looking visionary goals that guide the recreation of future opportunities. Further guided by these business visions, the firm's management can define measurable financial and strategic objectives. The financial objective involves sales target and earnings growth. Sales and growth are interrelated as when the former goes up, the latter started to expand. Further, the second process in planning includes environmental scan. This process includes internal analysis of the firm and also external macro environment. The internal analysis can identify the firm's strength and weaknesses whereas external analysis reveals opportunities and threats. (Peter 2006)
The third process is Strategic Implementation. It starts by means of programs, budgets, and procedures. Generally implementation involves organisation of firm's resources and motivation of the staff to achieve objectives. Those companies which implement strategy, likely will be different from those who formulate it. For this reason, care must be taken to converse the strategy and the reasoning behind it. Otherwise, the implementation process might not succeed if the strategy is misunderstood and this results in downfall in the management of the company. The last but not the least is the process of Evaluation and Control. The implementation of the strategy must be monitored carefully and adjustments made as needed. Control systems should be developed and implemented to facilitate its monitoring. Standards of performance are set, and the actual performance measured, and appropriate action taken to ensure success and growth. (Robert 2008)
In conclusion, the strategic planning is a thought process as well as plan. The part of developing sound strategies is the ability to think strategically and thereafter implementing step bt step the procedures and guidelines which need to be followed. It is also very important to involve the people who are working and train them for the techniques used in the planning process so that they learn how to work more efficiently and give desirable results. Therefore, Strategic planning requires a significant investment of time and energy. For this purpose, organisations will also have to overcome certain barriers such as lack of time, things changing fast, casual behaviour towards work etc. A visible commitment from top leadership is required for effective strategic planning. (Fleming 2009)
STRATEGIC PLANNING OF WOOLWORTH-PRI MARK
Woolworth Company formed in 1879 by Frank Winfield Woolworth was largest retail company that was one of the original American five and dime store. It was founded with the loan of $300 in the 20thcentury. Retail chains using Woolworth name mainly survived in Germany, Austria, Mexico and South Africa, and until the start of 2009, in the United Kingdom. The Woolworth name was changed to Venator Group in 1997 and later to Foot Locker in 2001 due to some issues between the partners associated with the company. The company mainly deals with the products such as clothing, footwear, bedding, furniture, jewellery, beauty products, consumer electronics and house wares. Woolworths emerged in first place in the annual Business Trust Barometer, a national survey rating South Africa's most trusted companies. Placed second and third respectively were Vodacom and South African Airways. In 2003, the most trusted company was Pick 'n Pay (this year placed sixth), with Standard Bank second and ABSA third. (Coulson 2004)
STRATEGIC PLANNING OF WOOLWORTH COMPANY
The company itself adopts the strategy to grow both in business as well as satisfying consumer needs. It is the Australia's leading retailer in food, liquor and grocery market share of around 28 % and annual sales of USD 20 billion. The Woolworth has 730 supermarkets and 120 BIG-W general merchandising stores. In totality, the company's project involves 850 stores and 14,500 point of sale terminal. Woolworth has approximately 320,000 shareholders, plus around 40,000 employee shareholders, making one of the largest employee ownership corporations in Australia. Woolworths Limited is major Australian company with extensive retail interest throughout Australia and New Zealand. It is the:
largest retail company in Australia and New Zealand by market capitalisationÂ and sales
Largest food retailer in Australia and one of the two largest in New Zealand.
Largest takeaway liquor retailer in Australia.
Largest hotel and poker machine operator in Australia.
19th largest retailer in the world -Deloitte.
The instances of strategic planning of Woolworth can be seen from the following inferences:-
If one look closely to their supermarkets business one will find that it has been spread all over Australia and territory and it has been pronounced as "Woollies" in their local language. "Woollies" might not look like any appropriate dictionary word but this is the name that has been given to Woolworth due to its performance and love amongst people. This word is connected with the "Fresh Food People" phrase. After their success in Australia since 1987, "Woollies" made their mind to expand their supermarket chain in Victoria. In August 2008, Woolworths announced it would be rebranding these stores as Woolworths. Safeway remained the dominant brand in Victoria along with the Discount supermarket chain that has been established in Queensland and New South Wales since then. Not only this, Woolworth consists of Group of four supermarkets located in Sydney and the Central Coast.
After having a broad perspective of Supermarkets by "Woollies" in mind, now we will move our discussion to the Liquor stores by Woolworths. As far as the liquor stores of Woolworth are concerned, they are not located in Queensland and Tasmania as the State law prohibits sale of liquor and equivalents in the same states. Woolworth's Liquor stores were known as "Mac's Liquor" and these stores were connected to the Safeway supermarkets that have been discussed above. There were some Liquor stores which were located far away from main city with a separate name "Beer Wine Spirits" that have been opened keeping in mind the people who travel a lot and buy liquor to enjoy their journey. Dan Murphy's is considered to be one of the most successfully growing and best-selling stores connected with Woolworth in terms of liquor sales. There used to be their 100 stores in all, with the current count of 55.
Not only this, to facilitate people, some petrol stands located with their main supermarkets and liquor stores.
Now coming to the sale of general merchandise, the discount department store chain discussed above in supermarkets section, the BIG W store accounts for around 8% of group sales and this store is literally competing to Kmart and Target stores. It is only because of their aggressive expansion plans and concentration on sales and focus on customer satisfaction.
From the above, one can clearly have an idea of strategic planning for Woolworth, they concentrate on customer, and try to make their stores the area of last resort for all types of customers. They want that the customer shall get whatever they want at one specific location at a very reasonable as well affordable price.
The Woolworth mission statement and main strategy is to deliver to the customer the right shopping experience each and every time. It is not always the money that matters; it's about the amount of satisfaction a consumer gets when they buy a product. The company also focuses on the vision statement of providing quality products and services to their customer through price strategies, fresh food strategies and human resources strategies. Its main strategy is to increase efficiency and to be cost effective at the same time. To achieve this, Woolworths integrated and implemented several strategies which include everyday low price and Project Refresh Strategy.
Project Refresh is a strategy designed to drive the cost of doing business down. To implement this strategy, organisational structure, staff leadership and stakeholders play very prominent role. Woolworths' has experienced great success and should continue along the same path through innovative, tactful and profitable strategies. Woolworth's execution of its strategies is due to core competencies and the ability to reposition itself in the market and efforts to differentiate it. Woolworths are now recording their first billion-dollar profit. Due to implemented strategies profit is up 24.3 per cent. This means that the strategies adopted by Woolworth emerged as one of the most promising brand which has positive influence on the mind of the people. The products and the services are based on the taste and preferences of the personage .Furthermore, Woolworths' £20 m marketing strategy, with a goal to reposition the stores as the ultimate family shopping destination. There is almost 40% reduction in carbon emissions on projected growth level by 2015, maintaining 2006 levels. Atleast, 200 million litres of water to be saved each year through Water Wise project. In addition to this, about 3.4 million reusable crates to replace single- use waxed box. (Fifield 1998)
The company's marketing strategy focusing on greater convenience, quality, range, and lower prices is winning strong customer acceptance. The company also launched online shopping website named www.woolworths.co.uk to help the customer give their feedback about the products whether they are satisfied or not and also by clicking they can shop from anywhere and anytime without wasting time. Moreover they can choose from the list of products they preferred. This will help the company to know their cons & pros so that they can implement various policies to make their commodities more resourceful.
Primark deals in menswear, womenswear and childrenswear. Menswear is further subdivided into casuals, formals, cloths and footwear along with everyday essential wears. Womenswear are further segregated into party wear, clothing meant for work, clothing meant for holidays etc. Childrenswear are divided into girls' clothing and boys clothing which specifically consists of essentials and fashion wears. Primark concentrates upon style, along with offering quality in affordable prices so that the customers do not feel offended after buying anything from their stores. Primark concentrates upon their customer's satisfaction and try to satisfy customer in such a way that every customer leaves stores with a smile on their face. Primark concentrates upon ethical trading which means they not only concentrates upon customer satisfaction but they want each and every person connected with their stores to be satisfied whether it be their employees, dealers, and sales person involved in selling at their stores. They are a bit humane kind of organisation which aims at human satisfaction more than profit making as they know the importance of human resource very well. The top management knows it very well that the stores are prone to changes in internal and external environment, and the adaptability of that changes can only be possible with due cooperation of their employees and interested parties of Primark stores. The Human Resource is the only resource with Primark stores which can make the transition process comfortable.
STRATEGIC MANAGEMENT OF PRIMARK
Cost - The management of Primark has made an impression in every costumer's in such a way that it is considered to be low cost stores. The cost factor helped Primark a great deal in maximisation of their revenue and profits. Profits are being maximised due to stress upon minimisation of wastage and maximisation of productivity. Primark provides a whole range of clothing in a very affordable price which doesn't hamper pockets of a common man. (Sheshinski, Strom, & Baumol 2007)
Shopping Easy - Along with the cost factor, Primark has given utmost importance to make the shopping of the customer easy and cosy. The interiors of their stores have been designed in such a way that it gives utmost comfort to the customers. This relates itself with comfortable sitting, friendly and helpful sales person, descriptive displays etc.
Focus on Customer Satisfaction - After reading the above two points, one can predict that the ultimate aim of Primark is customer satisfaction. This is the reason why along with low costs, Primark provides comfort zone to their customers. Primark considers the customer to be the basic reason of their business is customer itself and customer are considered to be the "king". Each and every decision, policy and procedure has been designed by management keeping in mind the importance of customer and their satisfaction.
Job creation - Primark created a lot of jobs in a short span of time. Jobs were designed in such a way the total work is divided into small segment, such as, one bigger work is divided into smaller segments to make it comparatively simpler. Job simplification increases productivity and reduces wastage to a great extent.
Comparison between both the companies is discussed below:
Firstly, since both the companies mainly focuses on low-cost, Woolworth had better future prospects because it deals with variety of products such as clothing, footwear, bedding, furniture, jewellery, beauty products etc. whereas Primark is basically more into clothing sector only and as a result have limited growth prospects.
Secondly, Woolworths is a high street retail chain which exits across the world in various guises. The reason behind its success is that they implement business strategy that further enhances their skills. On the other hand, Primark plan their strategy to have the highest block hour utilisation and highest productivity. They stress upon high level of productivity which means they stresses upon getting the most of output by using the minimum of input. Along with that the ethics followed by Primark, make them a unique store chain. (Pride, Hughes, & Kapoor 2009)
Thirdly, every business has certain up & down. Woolworths also faces some downfalls when the credit market freeze and the bank's ability to lend has been restricted massively, but more importantly their willing to lend is close to zero. In the same way, Primark faces drawback as the high price was the main factor for its failure. The store chain had to minimise their prices to attract maximum number of customers to keep their sales intact, but the money it earned from those sales wasn't enough to cover its cost of operations. Still due to their strong basics and goodwill, Primark emerged from that situation well in time and now its' working quite comfortably.
Fourthly, former stresses upon skill enhancement and increment in quantity whereas the latter stresses upon quality enhancement.
Fifthly, Woolworths deals with more of people and comparatively less of technology, hence Woolworths gives utmost importance to people's management whereas Primark deals in more of technology in comparison to people, still Primark gives utmost importance to their people along with technology. (Chandler 1990)
Sixthly, the strategic management in both the cases was planned to some extent but there were certain cases in which the results were found to be nearly unplanned. The unplanned component sometimes proves to be useful but in some cases it results in total waste of resources and manpower.
Even though the strategic management of both the companies act in a completely different manner to some extents but there were certain instances where the strategies showed same planning procedures and showed same results. In both the cases, the strategic management involves the interaction of outside business environment with the structure of overall organisation. Not only interaction, it basically helped organisations to get accustomed to the business environment. In other words, strategic management directs both the companies towards its goals by helping them adapt the internal and external environment in such a way that the overall business environment synchronises with the organisation. In both cases, the strategic management is pervasive which means it is being used in both the companies at all the levels, all the times. It covers overall corporate management strategy and individual business strategy as well. At the corporate level, it deals in organisation as a whole in groups, wherein the group resembles the group of managers or the group of employees performing the same job or the group of employees doing overall different jobs. At individual level, it deals with human resource management which, in turn, deals with the critical evaluation of employees on the basis of their performance and relates their performances with the factors of motivation as different things motivates different people to work favourably. The work of strategic management gains utmost importance here only, where it deals with searching the factors of motivation for different people. (Kearney 1992)