Case study: Woolworths turnaround strategy 2007

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Case study: Woolworths turnaround strategy 2007

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Abstract

Woolworths Holdings Limited is a South African based retail group that operates locally and internationally through two subsidiaries, Woolworths (Pty) Ltd and Country Road Ltd. Stores are based in Africa, the Middle East, Australia, New Zealand, the United States of America, Europe, and Singapore. Woolworths in South Africa, was established in 1931 by Max Sonnenberg. Links with the UK based Marks and Spencer retail organisations were forged in 1947. Although M&S ultimately sold its shares in Woolworths, the two companies maintain close personal ties as well as a formal technology agreement. Woolworths offers a selected range of clothing, beauty products, home ware, food and financial services under its own brand name. The Woolworths' environment is distinct by 6 competitors: The Edcon Group, Truworths, Foschini, Mr. Price, Pep Stores and Ackermans. Direct competitors are Edcon, Truworths and Foschini, while the others are specialized in different target markets.

Introduction.
The industry's dominant economic features.
Forces that drive the industry change and impact of each on competitive intensity and industry profitability.
The market positions that rivals occupy.
The strategic moves that rivals are likely to make next.
The key factors for future competitive success.
Outlook for the industry.
Conclusion.
References.

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[...] According to a survey, Woolworths knows how to build trust, better than any of its rivals. It seems that there exist a link between the general low trust ratings and the lack in trust of the higher business. (All Africa Online. [07 December 2004]). Gilmour said: We believe that Woolworths is quietly doing better and showing healthier growth in all its divisions, from food to clothing to Country Road."(Gilmour, C. [17 February 2008]). Ungerer, Pretorius, and Herholdt cite the words of strategy guru Adrian Slywotzky: “KNOW YOUR CUSTOMER”. [...]

[...] An attribute placing a company in a position of market advantage Obsession with quality & value for money, innovation and healthy lifestyles. R&D in healthy lifestyle put them far ahead of competitors. Organic clothing range. MSG removed from all food products. Easy and convenient meals to prepare. Inflationary pressure were taken into consideration. Ensure value for money. The cross-shop plan. Affordable prices to the aspirant LSM 6-10 market. Focus on emerging markets. The beauty market has low market share ranges and can be used to expand their horizons. [...]

[...] Woolworths is second with 9,8%. Woolworths currently has the least growth of all its rivals. The scope of competitive rivalry within the South African landscape is changing with some institutions targeting previously disadvantaged areas like Soweto. With the opening of the Maponya Mall, . Pick Pay, Woolworths, Edcon Group stores, African Bank and McDonalds” (Bizcommunity.com [17 February 2008]) enter the lower end of the market spreading their geographical reach within the local South African market. Buyers have a lot of power, especially in the clothing section, among other, because women don't tend to be brand loyal (Hough, C46). [...]

[...] Turnaround Strategy for Woolworths Clothing A SWOT analysis summarizes the companies' resource strengths and weaknesses and its external opportunities and threats as given in Table Where to go from here: Woolworths needs to participate in the middle and upper black market. Increasing the growth rate will lead to increased market shares, increased sales, and creating brand loyalty. How to get there: $ Internal development Staff rewards and training will increase customer service capabilities and might require less staff per floor area (see Figure 4). [...]

[...] p.179 Woolworths “February 2007 Investment analyst presentation”. [online] Available from: www.woolworthsholdings.co.za/investor/presentations.asp [18 February 2007] Woolworths “October 2007International Investor Update”. [online] Available from: http://www.woolworthsholdings.co.za/media/presentations/downloads/oct_2 007/international_investor_1007.pdf Table SWOT ANALYSIS for Woolworths Holdings Strengths Weaknessess Skills, competencies, or capabilities Product/Quality performance. Trust. Technological Skills - chemical testing. Cost Position - Use centralized distribution. New Product Innovation Capability - 100% cotton campaign. Financial Resources. Relative ROE of (2006: 34.8 Customer service capabilities Valuable physical assets Woolworths have 345 stores (franchises included). The total trading space is m2 ranging from Engen foodstops of 32 m2 and food stand-alone stores of 250 m2 to full line stores of 9000 m2 Valuable human assets Employer training, income security, and working conditions. [...]

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