Woolworths: Australian Grocery Market's Churning Rivalries - Essay Sample

Introduction

Woolworths is one of the grocery stores that is based in Australia, and it was started in the year 1924, and it mainly specializes in selling groceries, such as vegetables, fruits, meat, beauty products among other items. The Australian grocery market has been competitive in the last few years, and this can be attributed to the moves made by the rival businesses in finding ways of attracting customers and increasing the volume of their sales. Amazon has been one of such organizations that have reduced its prices in comparison to the other similar entities in the market, and this move has led to Woolworths and the other business to become concerned about the state of their businesses (Redman 2018). As a result, these businesses need to undertake measures that will ensure that they remain relevant in the market, and they manage to compete with the other organizations. There have been various issues that have been adversely affecting the operations of Woolworths among them poor distribution channels and high prices levels in comparison of the other entities like Amazon that have adopted the low-cost business model (Walton 2018). There is a need to find a solution to these issues to give the entity the chances to remain competitive in the market.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Order now

Distribution of Goods

Woolworths has a system that is suited well in facilitating the distribution of commodities than the rival entities, but there are worries that Amazon has gained ground on them (Loh 2018). However, various challenges are affecting the distribution platform, and one of these is the strikes by the workers. In the recent past, staff members went on strike demanding for job security and a rise in the pay scales that they are getting from the organization. They are demanding to be given more full-time work, a rise in the wage level at the rate of $2 for every hour in every fiscal period, and a rise in the pay-outs in the case of retrenchment. These strikes are likely to have a direct effect on the distribution of products to the organization's supermarkets and liquor stores. Another issue that is affecting the distribution of goods in this company is the decline in online spending in the case of grocery products. The groceries delivery, when made through the online systems, presents various challenges, such as the need to observe the different temperature levels of the grocery baskets ordered online. The delivery of the commodities labeled as perishables requires a lot of care and diligence, which is a tough element to realize. Therefore, the grocery supply chain is a problem that the organization will be needed to address. Automation has been a procedure that organizations in the present world have been adopting with the move to improve their distribution processes, enhance their operational activities and reduce the costs of doing business. Despite the many benefits that are realized by undertaking the automation process, the installation of the latest equipment is not cheap, and a lot of resources are needed to ensure that the right materials are installed in the right way. Woolworth needs to set aside a huge chunk of its earnings with the move of ensuring that the latest equipment is installed. These challenges can be solved to present the company with the opportunity to remain as the leading brand in the industry and wither the competition from the rival entities.

The firm can rely on the consumer decision-making process to find solutions to the various problems that are affecting its operations. The first step involves making identification of the problem at hand and what the organization and customers need. The organization wants to ensure that the distribution channels are working effectively and that the consumers are getting the commodities that they want. Therefore, investing in the latest technological tools will be a good way of making sure that the company is operating efficiently. Information service is the second step, and in this case, the organization will have to find a way of managing the risks that may arise due to the failure of the distribution channels (Giammona 2019). There is the possibility that when the workers strike, the volume of goods reaching the market will reduce. Therefore, reaching into a consensus with the distribution sector, staff members will be a better way of managing any adverse issue that may happen. The evaluation of alternatives forms the third step that can be utilized in managing the distribution channels and any arising issues (Barbaschow 2016). The management may undertake measures and find if there exist other measures that they can undertake to help resolve the issues at hand. In this case, the distribution channels the firm is using may need an upgrade, and this may call for the need to find if there are other ways that can be used in resolving the problems currently being experienced. The inability to deliver the grocery products that are ordered online is an issue that can be resolved by either having vans that may be installed with the fridges that can be used in delivery goods for a single client without the costs of goods rising due to the extra service offered (Hunt 2016). The process will even attract more clients of the organization and wither the rivalry that is being presented by Amazon. When the consumers are provided with the right information and tools that they can use to get commodities from Woolworths in the easiest way possible, the next step in their decision-making process is purchase. Creating an enabling environment where the clients can purchase the goods and commodities that they need will be a good idea of managing the distribution problem experienced by the company. At this point, the consumers should have managed to have an assessment of all the facts and make conclusions on what they want and the way to get the commodities. The next step in resolving the distribution problems in Woolworth is the post-purchase satisfaction, which is a stage of making a review on whether the raised issues delivered the expected outcomes. Striking workers, online purchase of the groceries and the advancement in technology have been the major problems that are adversely affecting the operations of Woolworths. However, various strategies have been proposed, such as striking a deal with the staff members to ensure that the strikes are ended, the adoption of the latest technology and the use of refrigerated trucks to deliver the groceries (Bishop 2016). The review process will help to determine if these measures are delivering the desired goals and outcomes.

The other problem that is affecting the operations of Woolworths is the high prices that the products of the company are attracting in comparison to the rival entities in the market. When an entity is selling its products at high prices in comparison to what the other firms are selling in the market, there is the likelihood that it will lose clients to the competitors. This will lead to reduced sales and earnings, further limiting the chance of the firm widening its expansion procedures. Amazon has been selling some of its products at low prices in comparison to what they are retailing at Woolworths, and the issue has been worrying for this will trigger a massive movement of customers to Amazon since it also offers quality goods (Kowitt 2018). In an example, the Colgate toothpaste is retailing at $3.50 at Amazon while the same product is selling at $7 in Woolworths. A dishwasher tablet is going for $16.99 at Amazon, but the prices are at $35 for the same product in Woolworths. This is an indication that there is a big difference on the prices of the same commodities in the two entities and Woolworth's management needs to find a solution to avoid experiencing adverse issues that arise from the issue (Mortimer and Grimmer 2018). The problem is likely to derail the organization's plans for the future, and this means that the management needs to take the necessary precaution to bridge the gap that exists in the pricing between Woolworths and the other companies in the sector.

The system thinking approach can be used in resolving this issue, and the first process involves understanding the problem at hand. The management needs to know that their products are selling at high prices than the rivals, and there is a need to find out the source of the problem. It may be from the fact that the distributors are selling the commodities to Woolworths at higher prices than Amazon or other factors, such as Woolworths setting higher margin levels. Understanding that there is a problem will be one of the ways of finding a solution. The second step in having the behavior over time graphs, which involves tracking the problem over time. In the paste, there is a likelihood that Woolworths was performing well on the pricing front in comparison to the Amazon firm, and there is a need to determine where the problem started to appear. This can be used as one of the strategies to solve the problem for Woolworth's management may decide to revert back to the strategies that had been tried and delivered the desired outcome (AFN 2015). Additionally, it may consider improving on the system it was using in the past.

Focusing statement should be the next step that the management should undertake to ensure that the prices of its products are in line with those of the rival entities or even lower for the same products regarding quality and quantity. The management should set targets that they need to realize, and this should be accompanied by the factors that are triggering the problems at hand. Selling products at high prices in comparison to the other similar entities in the market is one of the ways that organizations can fail. The fourth step involves making identification of the structure that is suitable and one that can be used in resolving the issue at hand. The proposed statement enables the management to have a clear vision of the issues that are triggering the rise in the product prices that are being sold by the Woolworths. The system's structure should include the behavior patterns that can be used among them improving the relationship with the manufactures of the distributors to ensure that the organization manages to negotiate for low prices of the commodities that they are buying. It may happen that buying goods in large quantities will enable the organization to get the quantity discount an issue that will enable the firm to lower the prices of its commodities (Brook 2017). Therefore, the management may consider increasing the size of their warehouse and ensure that they have enough space to store the commodities that they have purchased in large scale.

The first step that the management should ensure that they undertake is that of going deeper into the issue that is influencing the prices of the goods being sold by Woolworths. The step should work towards making an analysis of four steps, which include the system purpose, personal role in the situation at hand, the large system and the mental models. The system that will be used in handling the price adjustment procedure, as well as, other measures that can help to improve the pricing procedures that are undertaken by Woolworths should be effective to ensure that the resources used in implementing the system are utilized effectively (Zeviani 2018). It may happen that the various individuals that are involved in purchasing the goods sold by the grocery store have an influence on the pricing model adopted. In this case, they must ensure that they make the right adjustments that will give the firm the opportunity to compete effectively on matters touching on controlling the pricing process. The last step that the management need to utilize in resolving the pricing problem is planning an intervention. The intervention phase involves the...