New Marketing Strategies for Woolworths

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As a project at hand, I have looked over and analysed Woolworths as the best retailer in Australia and also a business entity that can remain to be the best for many years to come. Woolworths, though not identical, is a little similar to the American retail giant Wal-Mart which has worked amazingly well with its suppliers. Woolworths also has an amazing logistics and communication network that help it to cut down cost and bring about efficiency in its performance.

My report is my perception of this Australian retail giant. I am submitting this report so that the organisation has an outsider’s view of the scenario Woolworths is in currently. I also believe that I have conducted an evaluative study on the retail industry and how Woolworths has made its mark there. In the report, I have clearly analysed the strengths, weaknesses, opportunities, and threats that Woolworths faces in its day-to-day operations. There is also an analytical comparison of its operations in application to Porter’s competitive 5 force model.

As an external consultant, I have also recommended certain current marketing strategies that need to be implemented for this company, and these schemes form an integral part of the requested marketing report.


The Chief Operating Officer,
Woolworths Ltd.,
Dear Sir,
Sub: New Strategies for Woolworths.
Woolworths is at the crossroads of business growth and it needs to consolidate its position as one of the leading names in consumer business in Australia.
Therefore, new strategies must be implemented that could address aspects of competition from retail trade in Australia, especially Costco.
This study delineates some of the major innovative strategies that could be taken up by Woolworths, followed by SWOT and Porter’s Competitive 5 Forces Analysis.
I resolutely believe that disciplined implementation of these schemes would enhance Woolworth’s competitiveness in the global marketplace and also make it more viable and attractive for big and small consumers and would go a long way in aligning the business goals of Woolworth in the long term.
Thanking you.
External Advisor


Woolworths is a store that started a century ago as Woolworths Stupendous Bargain Basement. Woolworths continued to hire and employ people even during the depression and encouraged the display and sale of Australian goods, which in turn, helped in developing the country’s economy. Woolworths started spreading its wings to multiple regions, urban and rural, within and outside Australia. They started pioneering in the supply of a wide range of commodities that are low priced but of good quality. Today Woolworths is the second largest employer within Australia and most of its shareholders are common people of which nearly 19,000 are its own staff. (Serving Australians for more than 80 years 2009).

Purpose: How could Woolworths address competitive threats to its business in future years and how to resolve them?

Statement of Purpose: The purpose of this study is to provide the rationale for innovative marketing strategies for this company.

Mission Statement

Our mission is “to deliver to customers the right shopping experience – each and every time”. (Woolworths strategy 2009).

Woolworths emphasises upon being able to provide quality products at a low price.

Currently, Woolworths is also laying an eye for providing fresh food, ideally in the area of fruits and vegetables. They assure you that they choose them from the best farmers and the best farm within and around Australia. In their recent financial standing, Woolworths owed £385 million to various banks and financial institutions and most of their employees did not think they would make it through the Christmas of 2008, but the company has survived with great assistance from the Australian government. (Poulter 2008).

New strategies

For this strategic pricing strategies must be adopted. These could be made after holding consultations with major suppliers and vendors and entering pricing agreements with them. It is also necessary that the benefit of reduced prices be passed on to ultimate consumers, to satisfy them price-wise, and also in order to gain strategic advantages in a competitive business milieu.

However, it is also necessary that the price line be held strong from the initial stages of the company since unusual price differentials over time could create more consumer-related problems than it could possibly solve.

The next aspect is with regard to stocks and their replenishments. A strategy must be adopted that could provide an integrated stock database system, such that replenishments are timely and customers do not suffer for want of required items.

The next strategy could be that staff training costs need to be controlled in order to increase the profits and improve the bottom line of Woolworth’s business.

The mission statement of Woolworths clearly states that its prime purpose is to make sure that it delivers a shopping experience that is memorable to each and every customer in each and every visit. To make sure that customers are satisfied at Woolworths, multiple aspects are at play. For example; the stock of goods available on a particular day, the variety the customer has so that she/he can make the choice, the service staff and their outlook towards customers, the arrangement of things, the aisle spacing, child safety measures at the stores, promotions, pricing, appearance and the like.

  • They need to introduce smaller stores in many of the rural areas in Australia where there is rarely any presence of competition.
  • They need to prepare for facing competition from Costco in Australia who have stated that they would provide a lower price level in comparison to Woolworths. Woolworths need to work a way around by providing a wider range and promotional offers to customers if it is not possible to cut down on cost. (Fenner 2009).
  • Woolworths can offer a larger discount on commodities that are purchased in bulk, that way making sure it still provides the lowest price in town. Woolworths also has a range of goods that is a lot more than what Costco can offer. Woolworths need to emphasise these points to the customers through advertising.
  • Woolworths can implement its self-service checkouts which will prove to be more effective especially in the urban areas where consumers are short of time. This will help in cutting down costs and time.
  • Appearance of the supermarkets also determines, to a great extent, the experience people attain from their shopping. Hence, Woolworths has to spend a sizeable amount of money on refurbishing its current outlets and building new ones. Though it may not sound ideal in the current economic downturn, surely the results will be pleasing and Woolworths also will invest only if they have assured returns, which they do.
  • The global recession is a better time to gain more returns since more Australians are choosing to eat at home than outside which ideally translates into more shopping at Woolworths.
  • Upbringing its own private label will help Woolworths to provide quality products for a lower price. This could be anything from a bag of sugar to a pair of jeans. The private label always tends to be cheaper than branded products and today customers do not hesitate to pick up a private brand.
  • Collaborate with retail giants in other countries so that Woolworths can spread its wings to cover and serve millions more.

SWOT: Acronym for Strengths, Weaknesses, Opportunities and Threats study

Large companies like Woolworths must determine their strengths and opportunities to construct short and long-term strategies that could address competitive elements in their marketing milieu. Nevertheless, it is also needed to know areas of deficiencies that could be minimised and threat areas that need to be contained through enforcement of strategies. By knowing one’s strengths and identifying and containing weaknesses, the company would be in a much better position to interact with clients, customers, and other members of the public who are mainly responsible for the growth and development of the company on a large-scale basis. The main objective of SWOT Analysis is to “develop good strategies that exploit opportunities and strengths, neutralise threats and avoid weaknesses.” (Davidson & Griffin n.d., p.244).

  • SWOT analysis of Woolworths is found on Pg. 11 (Attachment 1)
  • Porter’s Competitive force analysis is found on Pg.12 (Attachment 2)

SWOT Analysis

SWOT analysis is a management tool that is utilised to evaluate the strengths, weaknesses, opportunities and threats that are encountered by a business entity. In all cases, strengths and weaknesses are internal factors that can be controlled by the firm to a great extent, whereas opportunities and threats are external in nature and cannot be changed in most instances. The external factors remain the same for all firms within the same industry whereas the internal factors change from entity to entity. The SWOT analysis was developed by Albert Humphrey.


The suggestions are made after understanding retailing strategies around the world, but please understand that these are just my viewpoints and maybe arguable to many. I have provided most of these strategies in the eye of cutting down cost which is what has made Woolworths popular in the first place. I have understood that there is nothing that makes customers happy like a shopping experience that has been light on their wallets.

In most cases, Woolworths has the possibility of building its reputation if it can provide customers the alternatives to what they are subjected to otherwise. The strategy that emphasises the appearance of Woolworths clearly states so, since a well-kept and clean-looking place always reflects their supplies as fresh and healthy too. Though some of the strategies might involve a greater risk of investment, I do not believe in not doing so, if you are capable of accruing returns.

In the case of Woolworths, it will always be able to invest since its loyal customer base will come back for more.

Besides, as the marketing consultant who has formulated these strategies for implementation in Woolworths, I believe that the time has come for Woolworths to shed some of its age-old inhibitions and come into terms with ground marketing realities, in the light of competition from Costco, Coles Group, Metcash, etc.

This could need for shedding redundant costs and presenting a sleeker, trimmer, and leaner cost framework for Woolworths. This could also be making the Woolworths’ experience something special, not only for shoppers, but also for all kinds of people who are associated with Woolworths- stakeholders, workforce, managing staff, and, ultimately, the consumers, who are deeply involved in Woolworths’ success story over its useful life.

I resolutely believe that the disciplined implementation of these schemes would enhance Woolworth’s competitiveness in the global marketplace and also make it more viable and attractive for big and small consumers.

It could also establish and sustain brand leadership in the UK consumer markets.

Reference List

  1. Davidson, P & Griffin, RW n.d., Management: 3rd Australasian edition: chapter 8: managing strategy and strategic planning, Wiley, (Provided by customer).
  2. Fenner, R 2009, Australia’s Woolworths, Facing Costco, takes tips from Wal-Mart, Bloomberg.comю
  3. Poulter, S 2008, Woolworths’ saved from high street scrap heap’ with hope of keeping all 815 stores open. Mail Online, Web.
  4. Serving Australians for more than 80 years 2009. Woolworths: The Fresh Food People, Web.
  5. Woolworths strategy 2009, Research papers and Essays for All.

Attachment 1

SWOT Analysis


  • In every aspect of the business function, Woolworths has been able to retain skilled quality staff.
  • Great supplier base which helps in cutting down the cost involved in the supply chain process, which in return, helps in cutting down commodity cost.
  • Multiple retail locations available in all parts of the region within Australia and New Zealand.


  • High investment in the field of logistics and staff. Woolworths provides exclusive training and apprenticeship programs to its staff which comes with a price tag.


  • Growing retail industry around the world and the best retailer in Australia.
  • Opportunities to expand its services to other parts of the world due to globalisation and liberal government laws.
  • Availability of skilled and cheaper labour due to increasing in immigrant population in Australia, because of the advanced educational facilities available.


  • Growing competition in the retail business has made it difficult to keep up to the standards.
  • Suppliers determine the fate of Woolworths’ fresh produce to a great extent.

Attachment 2

Porter’s Competitive Five Force Analysis

  • Bargaining powers of clients: With regard to Woolworths it could be seen that not much bargaining power would inure since Woolworths is an age-old Australian company that has earned tremendous goodwill and reputation in the marketplace. Standardisation of pricing is a major advantage in Woolworths and this is also the main attraction of clients.
  • Bargaining powers of suppliers: Woolworths places a lot of emphasis on quality and believed in negotiating pricing with suppliers in order to ensure the minimum cost to the ultimate end user. Since prices may be negotiated before hand and for fixed time periods, the question of additional bargaining powers for suppliers do not arise.
  • Barriers to entry for new marketers would obviously arise since they need to match with existing pricing and service norms. This would ensure that only the best products backed up by swift and speedy service are ultimately found in the stores, and meets buyers’ approval.
  • Threats of substitute producers could erode the present market share of Woolworths, thus reducing sales volumes. By resorting to undercutting and offering inducements to buyers in order to get a foothold in the market, new traders may also resort to sales gimmicks. The threats may be real and Woolworths need to take necessary precautions against them.
  • Internal competition within the industry needs to be closely monitored, especially its nearest competitors in Australian markets. Woolworths needs to keep itself inform about new ventures of competitors’ business.

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