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HI5019 Strategic Information Systems
The assignment is conducted in the context of Woolworths supermarkets that has been started its journey in 1924. The organizationis engaged in the business of providing packaged vegetables and foods for people on Australian ground. This organization is known for fulfilling all the requirements and needs of Australian People and has representeda huge range of products. This assignment is primarily producing the overview of external aspects of the company. The total overview of the company has been provided in the initial phase of this assignment and also the sector has been identified that has been readily working. The report will critically analyse the general environment along with the evaluation of the enterprise. In this research threats and opportunities along with a competitive environment is also described in detail. This assignment has also analyzed further the tangible as well as intangible resourcesthat will be further analyzed. After the end of the assignment, the effective information system has to design for the mentioned organization and possible recommendations have to be provided for the organization.
Part 1 (External Analysis)
1. Business Background
Woolworth's has started in the market named as Duopoly in1924. The company is engaged in selling fruits, vegetables, grocery meat,and various other products for the need of human beings. The company has 19 convenience stores and more than 1000 stores stretched across Australian geography. All the Woolworths supermarket stores are also selling their products in the online retail market to enhance their reach in the growing digital selling platform. The company is also providing several loyalty schemes for retaining the customers for establishing their market position in the market. It has been estimated that there are approximately more than 25000 employees are associated with Woolworths to provide efficient services to their customers. The company has believed to provide exceptional quality products to provide customers unmatched experience (Woolworths Group, 2018).
2. What industry is it
Woolworths is primarily engaged with the retailing of general grocery products.They have esteemed market position in the Australian market. The company is operating in the intensely competitive fast moving consumer products market. It is essential for the company to understand the needs and aspiration of customers. Company has gained revenue of $102 billion in year 2017. It has been assumed that there are approximately more than 362000 people are currently employed in this industry and has been providing its services to full filling the needs of customers. It has been estimated that the retail market is growing at a steady growth rate of 3% per year from the year 2013. Competition has been gained in the several large and midsized organisations in the retail grocery sector and the number of the players approximately identified as 1800 numbers. (IBISWorld, 2018).
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3. General environment analysis
Operations and functioning of the company has been affected by the several factors that are also associated with the general environment analysis. The general environment analysis of the mentioned business is as stated below:
Economic: It has been assumed the inflation, GDP, unemployment, purchasing parity is primarily stated as the factor that will develop a huge effect on the internal operations. The GDP of the nation will significantly affect the development process and also initiated the production process. Cost structure and pricing of the organization is also affected because of inflation. It is required for the organization to make changes in the market positioning strategy by taking into account the economic parameter of the organization. (Portney, 2013).
Physical: All the made products are taking intoaccount in this parameter that is directly affecting the people. All the tangibleassets are being primarilytaking into account in this physical world. The infrastructure of the organization is also affected by the physical parameter. Occasional change that is taking place in infrastructure has to be developed in order to perform changes in context of employees as per the internal working environment of organisation(Ryu, et. al. 2012).
Socio-cultural:All these factors will affect the enhancement of company strategies in the organization. Business and Operations of the company is significantly being highly influenced by the language, beliefs, education and attitudes of the natives.Woolworths supermarket is operating in the territory where the origins of several nations are available in the market.
Global: Globalisation is also affecting the functioning of the company. It has seen in the recent years that several international global organizationsare marking their presence in the retail grocery market in Australia.
Technological:Any operation in technology will affect significant changes in the business operations. The entry of the company in the digital sales will be also a strategy by the government to increase their presence in technological space (Hakansson, 2015).
Legal: The company is operating in the very competitive retail space and is directly dealing with customers. So in order to save themselves from technical glitches, it is crucial for the company to define their legal framework to control their business operations. It is crucial for the company to operate its business by following the legal framework of the Australian consumer protection act and align its operations as per the legal structure of the company.
Demographical: Increasing population is one of the crucial external environmental factors. There is a high challenge for the management of Woolworths to create significant space in the ever-growing population of Australiaand align themselves with changing times.
4. The industry environment
Porter's five forces analysis will help in analysing the industrial environment and it is necessary for evaluating the complete Australian retail and grocery market. The whole analysis of this industry is defined below under the following points-
Supplier power The supermarket and grocery retail industry is providing an extreme level of influence on the power of supplier. Prices and demands are being affected by the supplier power and usually all the big grocery retailers is having a long list of retailers associated with them.It is necessary for the organization to comprehend the demand of the supply but the company will be further depending on the suppliers to achieve the market requirement (Dobbs, 2014).
Buyer power The whole sector of grocery retailing is characterised as B2C dealing, wherein the buyers are the key influencing factor.It is essential to develop the pricing of the products as per the needs and aspiration of customers that will further help to manage sales(Dobbs, 2014).
Potential entrants Initial setup functions in the grocery sector is based on growth and development functions of the company.The industry has been passing through significant threat because of higher demands and growth prospects in the market. Sales consistency is also the factor that will motivate the bigger organizations to initiate their presence in the retail grocery market.
Substitute products Generally big retailers like Woolworths will procure their inputs from manufacturers and suppliers directly.There are also chances for the organizations to get threat from emerging alternative substitute product. Customers are also seeking other alternatives from purchasing the products and price will playa significant role in this case.
Rivalry among competitors The Woolworths supermarket is facing extreme business rivalry from several other established and emerging supermarket players such as Coles,Aldietc. All these player is creating an environment of rivalry in this sector (Ewing, et. al. 2013).
5. Competitive environment
Competitive environment in the Woolworths will be analysed by the help of several factors.
Strategic grouping It has been identified that there are several parallel organisations such as Wesfarmers, Coles, Aldi that are also following the same type of business model like Woolworths..
Group rivalry The Aldi is emerged as a biggest rival of Woolworths because of successive growth seen in the company.
Capabilities of the rivalfirm Aldi is commencing a long chain of retail stores that are approximately having more than 500 retail stores all over Australia to enhance the abilities to effectively deal with customers (ALDI, 2018)
Strategies of the rival firm Aldi has been using the several economic pricing strategies to sustain in the intensely competitive retail space to provide a successful debut in the Australian business world
Threats from rivalries The major concern for Woolworths is the rapidly progressing Aldi business and this will impact their market share in Australia. Business of the Woolworth is under tremendous risk because of rapid growth in sales and businesses of the company.
6. Opportunities and threats
There are numerous opportunities and threats in the retailing market for Woolworths. A few of them are provided below:-
· Opportunity to venture into the rapidly progressing electronic business space
· Opportunity to grow in the international market
· Opportunity in the fashion segment
· Opportunity in food and beverages segment
· Intensified rivalry
· Entry of several internationalfirms
· Demand fluctuation
· Unstable economic situations
Part 2 (Internal Analysis and Proposal)
1. The Firm's resources, tangible and intangible
Woolworths has a plethora of resources that can further be bifurcated into intangible and tangible resources. Any physical components of the businesses will be stated as tangible resources. All the immovable and solid resources of Woolworth's such as inventory funds, lands, buildings etc will come under tangible resources. As per the data provided by the organisation in its 2017 annual report, the overall tangible resources of the company account are worth more than $13 billion. (Woolworthsgroup.com.au, 2018).
On the contrary, the resources that have no physical presence will be termed as intangible form of resources. Patents, Goodwill, trademarks etc are some of the common examples of intangible resources of the company. The intangible resources of the Woolworth have proved to be a greater asset for enhancement of company and cannot be stated in the financial books (Woolworthsgroup.com.au, 2018).
2. Capability identification
The strategy that has been using by Woolworths will be defined by combining both the differential as well as the function of cost leadership. There are various capabilities has been identified in reference of Woolworths
Effective supply chain: The Company has a very effective form of distribution framework and has both the form of resources as well as capability to reach their widespread business network in no time. All this has become possible because of the inbound and outbound logistics of Woolworth. It has been seen that the in order to procurehigher EBIT over Coles the company has used a combination of higher intangible as well as tangible resourcesto get high revenues (Mindtools.com, 2018).
Brand reputation:TheCompany has significantly increased their brand value by providing fresh grocery output that has been built over the years progressively. All these have been possible by providing the exceptional consumer experiences and able to full fill their demands and aspirations. This has made distinguish identity in the consumers and will make them apart from their consumers.
Top management: Woolworth is still able to effectively sail in the unstable economic situation because of growing inflation and recession situation in Australia along with several parts of the globe. They have a modification in their strategy to effectively function in the market.
3. Core competencies analysis
Core competency study is the need of any business that is required to grow and progress in the competitive market.In order to evaluate the capabilities, there are some test has to be done to identify the correct core competency.
Relevance: This will measure the relevancy of the capability. The analysis of core competency will also present in front of customer something different and apart that will strongly influencetheirpurchasingdecisions. It is because of the efficient supply chain the customer of Woolworths will be getting products that are relevant to them (Wilkinson, 2013).
Difficult to imitate:This assessment will be aimed to find the USP of the firm. In reference toWoolworths, they will be selling farm fresh vegetables that are very difficult to imitate in the competitive market and also deemed as one of the core competence of the firm. Brand image of Woolworth will be assumed as fresh selling people(Wilkinson, 2013).
Application breadth: This is the assessment that is determining the fitment of the firm to identify the capability of the firm to penetrate in the potentially unrepresented business market. It has been observed that the Woolworth is capable to enter in several markets of the globe and able to expand themselves in various territories of the region.
4. Propose a suitable information system that meets the chosen company's needs.
It has been identified that in the current business scenario that there is very essential to upgrade the information system mechanism. All this system has been developed by the Comshare which is a US company. This system stated as MPC (Management planning control) is used for developing effective integration among the budgeting, planning and consolidation and completely operating on the solely integrated interface platform.This system will provide Woolworth an additional business mileage by providing them controlling power to manage stores from remote business locations and this has helped them to provide a solution to the sores in no time. This system will be able to simplify the invoicing machinery by providing proper control and flexibility.
5. Evaluate the proposed system and provide your recommendations.
It has been identified after all the trial runs and assessment that the proposed business system will be very helpful in the proper functioning of Woolworths. The proposed information system will prove to be very effective in gaining productivity and also much faster than the current system. It has been observed that the proposed system will also help in assessing the information from the computer data systems that are implemented in several stores(IT Web, 2018). This will assist the company to get assess the actual financial data as they required to analyze the financial growth of the company. This system has been identified as efficient for the company because it will help the company in analyzing the key growth areas and rectifying their weak areas by focusing on that area. This system will help the Woolworth to forecast the sales that have been found almost near to the actual figures of the company. In the current IS system of the Woolworth forecast has not been possible
On the basis of the above assessment, it can be stated that external environment study is needed to properly assess the threats as well as opportunities that are totally related with the business.It is important to progress in the business it is necessary that the identification of the strengths and weakness of the organization has to be done internally as well as externally. It has been identified that all the internal analysis will be providing support to define changes in the businesses to make implementation of the objectives of the business. It is necessary to execute competitive analyzeto find out capabilities as well as resources to identify the probabilities of change in the organization. The assignment has also initiated the evaluation of the general environment and will also effectively develop the probabilities of growth of the company in context of intensely competitive business scenario.
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