Woolworths Overview Of The Company Marketing Essay

Its core business focus is the provision of retail and financial services to upper and middle income groups mainly in South Africa but also in Africa, Australia and New Zealand. This includes men, women and kids.

Who are the competitors in the market?

Other retailers selling food (butchers, bakers, convenience stores, etc. – excludes takeaway food and restaurants)

Mass merchants (including discount department stores; department stores)

Size of the company

Woolworths Holdings Limited is an investment holding company and one of the top 100 companies listed on the Johannesburg Securities Exchange

Shares in Woolworths: 52% of market

Employees: 24,649

Stores: 637

Turnover: R 25.582bn p/a

Market share: 9%-10% 

Vision:

Woolworths’ vision is to provide quality products and services to its customers all the time through price strategies, fresh food strategies and human resource strategies. Woolworth’s main strategies are to increase efficiency and be cost effective.

Mission:

Woolworths’ mission statement and main strategy is ‘to deliver to customers the right shopping experience each and every time.’

Goals

Sustainable growth within the context of the changing social and environmental needs

Woolworth’s goal is to work harder to drive social development – poverty drives environmental destruction and that in turn creates more poverty. To help alleviate poverty, we need to expand the existing initiatives of the Woolworths Trust and link with the transformational goals to drive enterprise development.

The third priority relates to Woolworth’s impact on the environment, in particular the issue of diminishing biodiversity. 

The fourth priority addresses climate change directly by focusing on reducing Woolworth’s carbon footprint. Woolworths recognizes climate change as an issue requiring urgent action if the risk of serious damage to global prosperity and security is to be avoided.

Strategy:

The strategic intent considers four areas of focus: the customers, operations, and the people. Woolworth’s main strategy is to increase efficiency and be cost effective.  Under this strategy there are different strategies that the company uses such as price strategies, fresh food strategies and human resource strategies/growth strategy.

QUESTION 2

What would you change? What parts of the strategy?

Low price Strategy: (high quality vs. low price) – I would change the current pricing structure as it gives negative perception about the quality of their products. For consumers to believe that they offer high quality, price must be slightly more than usual as it creates a value-add considering the input costs.

Product Strategy: (healthy organic foods) – I would increase the percentage of organic food in the stores to increase/promote healthy eating.

Growth strategy: (entering new markets) – The stores are currently situated in high economic areas. I would therefore introduce Woolworths into low to medium income earners in different locations.

Why would you change it? (What internal/external forces?)

Low price Strategy: (high quality vs. low price) – Because the input (fixed & variable) costs have to be considered in order for the value added to be fairly presented so that the company can also see a good profit depending on the area of location. E.g. a Woolworths store in Cape Town will differ in prices to a Woolworths store in Mitchell’s Plain.

Product Strategy: (healthy organic foods) – When a big amount of customers consume a lot more of organic products, the will relate to Woolworths as the healthy alternative.

Growth strategy: (entering new markets) – This will give everyone the same shopping experience and affording them a chance not to travel too far for shopping.

Safety strategy: When this is implemented in families, it can have a multiplying effect and reach a lot of people within a short period.

Financial Services: (credit cards & personal loans) – Both cards allow customers to earn “W points”. Therefore, it is not necessary to have cards instead of one.

One stop shop: (sells a variety of things) – I would focus only on one or two offerings as too many products create confusion regarding the real product offering.

QUESTION 3

How would you change it?

Low price Strategy: (high quality vs. low price) –

I would push the price a bit higher because the high quality does not match the price. I would include all costs, improve packaging and set a higher mark-up.

Product Strategy: (healthy organic foods) –

I would get more suppliers of organic food on board and attract more healthy-conscious customers as well create more awareness on healthy eating and how it impact on effective leadership.

Growth strategy: (entering new markets) –

I would introduce more Woolworth’s stores in medium income areas first. Then, I would roll it out to low income areas (townships) such as Khayelitsha.

Advantages

My strategy achievement in terms of company goals

Low price strategy: one of Woolworth’s main strategies is to increase efficiency and be cost effective. The advantages of our strategy, the high price high quality strategy, would allow the quality of Woolworth’s goods to be high all the time. There will be less costs going into the research and implementation of many of the many strategies for Woolworths, to allow for the high quality low price strategy. It will also be less time consuming for Woolworths and Woolworths is known in the past for having high prices. People still have the perception of Woolworths having high prices.

Product Strategy: Because they have allowed for these high prices they are also able to increase the percentage of organic foods. This is obviously good for healthy eating habits and maybe in the long term decreasing the unhealthy eating disease rate in South Africa. Woolworths can also create healthy eating plans for individuals to increase buyers for the company.

Growth strategy: (entering new markets) the advantage of this would be to increase the Woolworths clientele. This would allow for many other buyers to experience the Woolworths experience.

Safety strategy: The advantages of this would be promoting the good ethics of the Woolworths Company.

Financial Services: the advantage of merging the visa and the difference cards would allow for efficiency when coming to the till at a Woolworth’s store. You will be able to have the choice on which transaction you would like to use. This will allow for more customers to get involved with both choices. Having one Woolworth’s card with both options is better than having two cards.

One stop shop: The advantages of having all these products is that it caters for all needs. This also allows the company to use a variety of promotion techniques to get through to their customers.

Disadvantages

Low price strategy: At the moment times are tough and people are still suffering from the last recession. To increase the prices could make the company have a bad name. The main reason they decrease the price is to give everyone the chance to have the Woolworths experience and be in the same level as their competitors offering goods at better quality. So increasing the price could steer the customers away although a slight increase won’t really affect the customer too much because of the quality of their products.

Product strategy: Costs of these organic goods are expensive and the company is already trying very hard to keep high quality goods at low prices.

Growth Strategy: Woolworth’s prices are higher than the usual Shoprite. Many people in low earning areas tend to go to Shoprite but there quality of food is not as good as Woolworths. People in low income areas are not really interested in quality and they are more interested in price. I feel it is a disadvantage to put a Woolworths store in low income areas because they will not make enough money to keep the store going. Maybe they could increase the amount of stores in the medium earning areas but still this would be a far reached goal to bring it in the low earning areas. The price of the goods is just too high.

Safety strategy: Because this is seen as part of work. Most workers won’t want to waste their time extending this technique to their families. It will be seen as extra work to be done.

Financial services: this will be time consuming for the company and there will be costs involved to implement this strategy.

One stop shop: Woolworths has already made itself known for having all these products but some products are more known to their customers then others. Woolworths needs to have their other products, like homeware, better promoted. Having all these products is the store can be costly. People will rather choose to go to Mr. Price home than to buy homeware appliances at Woolworths. Woolworths needs to strengthen their market in there other products or they will be losing profits.

Conclusion

Woolworth’s strategy works very well. It works so well that I feel these small changes won’t make much of a difference because they know what they have and they know where they are in the market. They were able to change their strategy over the years and even by doing so it has made them even more successful. This is the reason I feel there strategy is well implemented.

QUESTION 4