MGT5STR Strategic Management

Identify a corporation with product or service portfolios that span multiple business units. In your discussion define, with reference to scholarly articles, the term “corporation”.In your discussion define, with reference to scholarly articles, the terms “product portfolio” and “service portfolio”.
2) Business Unit Research
a. Business Unit Identification.

i. Identify a single strategic business unit within the corporation.
1. In your discussion define, with reference to scholarly articles, the term “Strategic Business Unit”.
b. Identification of Product and Service Lines.
i. Identify the product and or service lines of the business unit.
1. In your discussion define, with reference to scholarly articles, the terms “product lines” and “service lines”.

i. Identify the largest revenues created for the corporation by the chosen business unit. In your discussion define, with reference to scholarly articles, the term “revenue”.

a. Identify the Political, Economic, Social, Technological, Environmental and Legal operating environment of the selected In your discussion define, with reference to scholarly articles, the terms Political, Economic, Social,Technological, Environmental and Legal. Provide a definition for the term “operating environment”.

Wagner III and Hollenbeck (2014) depicts that a situation that provide a company a favorable or superior business position compared to other organization in the market signifies the importance of competitive advantage. It is also evident that as a result of the effective competitive advantage, an organization is able to attain more profitability. This is the stage, where business-level strategy is achieved by the organization by exploiting core competencies in their product or service markets (Kirchmer 2012). The prime objectives of this business report is to identify a corporation with product or service portfolios that have multiple business units and their competitive advantages compared to other competitors along with their revenue. The organizational that is taken into consideration for this report is Woolworths Limited. Moreover, recommendations for the future strategic direction and a conclusion will be illustrated at the end of the discussion.  

Corporation

Bakan (2012) describes that the term corporation refers to a large company or group, who acts as a single entity. Ackoff (2015) moreover added that every unit are legalized and have separate owners and are liable for the selling different products or services in order to meet the customer’s demand. However, exact legal status of corporation varies from jurisdiction to jurisdiction, where they perform and the stakeholders associated with each business units of the corporation are also different (Bakan 2012). Taken for an instance, Woolworths Limited is a one of the major Australian company with extensive retail market across the Australia and New- Zealand (Woolworthsgroup 2017).

 Woolworths Limited can be referred as a corporation as it comprised of many subsidiaries like- Woolworths, Countdown, Caltex Woolworths, Big W, BWS, Dan Murphy’s, Thomas Duks, Masters Home Improvements and ALH Group (Woolworthsgroup 2017). The ‘Woolworths’ is itself is an Australian Supermarket chain for grocery that’s covers about 80% of the Australian retail market. The product that is available here are packaged food, meat, vegetables and fruit. Moreover, with same business operation in New- Zealand is known as ‘Countdown Supermarkets’. Caltex Woolworths is a formulated with the joint venture of Caltex and Woolworths and is an Australian chain of petrol station and is now operated as subsidiary of Woolworths. Additionally, Big W is an Australian chain of discount department in the region of New South Wales and operates 186 stores (Woolworthsgroup 2017).

BWS and Dan Murphy’s are the liquor outlet in Australia. BWS offers wide range of beer, wine and spirits and have 1300 store alone in Australia; while, Dan Murphy's is the destination for liquor at affordable price with over 3,500 products including spirits and beers (Woolworthsgroup 2017). The subsidiary ‘Thomas Duks’, are liable for organic, gluten-free and preservative-free fruit and vegetables that are locally grown by Australian Farmers (Woolworthsgroup 2017). Woolworths is also a parent company for ‘Masters Home Improvements’ and ‘ALH Group’ subsidiary are liable for re- modeling and renovating homes and hospitality venues respectively. The hospitality venues include bistros, cafes, restaurants, electronic gaming, wagering and nightclubs (Woolworthsgroup 2017).  Every business unit is handles by different board of directors however there aren’t company is same and is a perfect example of corporation.

2.1.2 Product and service portfolio

Eggers (2012) defines that the term product portfolio refers to a collection of products that is offered by an organization. product portfolio comprise of different product categories and product lines and different managers are required for monitoring individual product lines and products. On the other hand, Rosemann (2015) portrays that service portfolio is the core repository, where all information regarding the available products are stored and sometimes these information are by a service provider. Service portfolio can be furthermore categorized under three parts- service pipeline, service catalogue and retired services (Rosemann 2015). pipeline refers to services that are not yet live; while, catalogue signifies the  active services of their companies and retired services that can be discontinues in the future (Eggers 2012). Considering the business units of Woolworths, ‘Woolworths Supermarkets’, ‘Countdown Supermarkets’, ‘Caltex Woolworths’ and ‘BWS’ are categorized as services catalogue; whereas, ‘Big W’ can be considered under retired services as the company has recently suffered setbacks.

2.2.1 Business Unit Identification

Kownatzki et al. (2013) explains that in a strategic business unit a larger enterprise that has several independent enterprises and each body have different operation to perform. Horkoff et al. (2014) moreover, affirms that each component of strategic business unit is a fully-functional unit. These independent enterprises are competent enough to perform their own support functions such as training departments and HR departments. Additionally, Winkler et al. (2012) also defines that these organization have different products categories under one parent company. The business unit that is selected in this section is the Woolworths Supermarket, which is an Australian supermarket/grocery store and serves products like fruits- and- vegetable, baked products, meat- and- seafood, health foods, drinks, baby products, entertainment and toiletries. All these products are used in a regular basis by the customers and regular discounts is also available on every item. Sometimes, discounts on combo products are also offered by Woolworths supermarket that attracts many individual.

 2.2.2 Identification of Product and Service Lines

The term product line is referred as a group of products that is sold under a same brand by a same company. Chevalier and Gutsatz (2012) also depicts that marketers often add more products lines t their existing business operations so that customers can get more products options from the brands they are aware. Thus, the prime reason for adopting the conceit of product line is to reach new customer and attaining diversified market value. On the other hand, Varley (2014) denoted that service line also signifies the same thing that is offering of more than one services by the same company. Chevalier and Gutsatz (2012) moreover describes that service line are nothing but an organizational structure strategy for planning the resource for any business size.

In context of Woolworths, the products line of fresh fruits and vegetable can be considered as their major products line. In their products line for fresh fruits, Woolworth offer ear William Bartlett, apple pink lady, strawberry, banana, blueberry, cherry tomato and rock-melon (Woolworthsgroup 2017) In addition to that, under the category of fresh vegetables, Woolworths offer garlic, zucchini, broccoli, carrots, capsicum, avocado, tomato, onions, mushrooms, beans, pumpkins and many more (Woolworthsgroup 2017). Moreover, organic fruits and vegetables are also available like strawberry, dates, beetroot and macro organic red cherry (Woolworthsgroup 2017). Another product of this products line is fresh salad and stir fry like- Baby Rocket Mix Salad, Lettuce Oakleaf, Lettuce Iceberg and Baby Spinach Salad (Woolworthsgroup 2017).

2.3.1 Identification of Revenue Centre

Sheldon et al. (2016) describes that revenue refers to the income generated by selling goods and services to the customers associated with major operation of a business. The revenue is typically measured a specific period and is included with the discounts and deductions on that business products and services. The annual revenue for the year 2012 was $3,817 billion and for the year 2013 was $4,391 billion (Woolworthsgroup 2017). The annual profit that is attained in the year 2014 was $4, 983 billion (Woolworthsgroup 2017). Moreover, according to the annual report of the concerned organization, in the year 2015 and 2016, the revenue earned from Woolworths food was $5,754 billion and $34.8 billion respectively. Thus, it is found that the major profit is attained in the year 2016 was $3480 billion; the annual rice is depreciated due to the underperformance of the food and petrol group together (Woolworthsgroup 2017).

2.4 External Environment Analysis 

Hohmeyer and Ottinger (2012) describes that the combination of internal and external environment factors that allows an organization to operate their business function is known as operating environment. Yuksel (2012) on the other hand portrays that internal analysis allows managers to analyze the strength and weakness of the company; while, external factors evaluates the market analysis that allows manager to assess whether a place is appropriate for the starting, maintaining and expanding the business.

2.4.1 Political 

The political condition of Australia is stable and business organizations get enough stability to perform business operations hassle free. In context of Woolworth’s food chain supermarkets, it is a notable organization in retail industry in Australia. The political condition of the place shapes the business environment for future growth. Moreover, the risk of business loses is not present. However, some risks are there on exporting the business products to other territories due to presence of tariffs, quality control with food and genera products (Srdjevic et al. 2012). Moreover, eco- friendly packaging system for reducing carbon emission, waster reduction and store development are also recent concern of political bodies in Australia.

2.4.2 Economic

The GDP of Australia is estimated as USD 1,343.60 billion for the year 2017 and was USD 1,410.00 billion for the year 2016 (Tradingeconomics.com 2017). This high rate of GDP allows every business to prosper in Australia (Tradingeconomics.com 2017). In addition to that, Glykas (2013) depicts that in Australia there is low interest rates and thus business organizations can take monetary facility from government very easily. Thus, by considering all these facts unit can be said that Woolworths’s Food business unit will flourish with their business operations. The only issue that is facing by Australia is that the value of their currency with that of Australian currency is dropped throughout.

2.24.3 Social

Woolworth’s business unit of offering fresh fruits and vegetables follows a green lifestyle and sustainable corporate practices that ensures its success in the future. Khan et al. (2015) also portray that their organic products like salads attracts more customers towards their business. Moreover, attractive rice of their quality products also ensures customer’s trust. The stores are also selected in the crowded and central area so that customer can visit their stores and purchase their products. Another initiative that Woolworths have taken for maintaining their social trend is to formulate loyalty programs that help the organization to earn a set of 900,000 loyal members (James et al. 2013).

2.4.4 Technological

In recent times, automation is the new technology that ensures company’s betterment. Woolworths have implemented self service check out system, home delivery services, online shopping from their websites, Google app and payment through credit or debit cards (Waterlander et al. 2012). All these factors allow the customer to avail their service due to ease of shopping. Additionally, virtual shopping centre are also developed by Woolworths so that customers can book their order just by scanning barcodes of the desired products and can select their desired date of delivery. These virtual shops with products details and barcodes resent in metro station so that customers can book their order on their way to home or offices.

2.4.5 Environmental

In retailing of fresh fruits and foods, environment is not harmed. Furthermore, all the business operations are conducted automatically with the help of commuters. However, Woolworths also took initiatives for recycling and reusing the materials to reduce the global warming and pollution in the environment.

2.4.6 Legal

Woolworths follows all the taxation regulations and employee management legislations that make the concerned organization as an ethical company. Yuksel (2012) also depicts that Woolworths also maintain food licensing for the edible products. In addition to that, Woolworths also plan for opening their outlets in many places and thus, they are taking approval from government authority. Since, food items have a certain time of their expiry, thus all the food have ti be fresh and sold before their expiry dates. Moreover, Woolworths also follow the legislation of Food Standards Australia New Zealand (FSANZ) for an ethical business operation (Foodstandards.gov.au 2017).

2.5 Source of Sustainable Competitive Advantage

Four factors of maintaining sustainable competitive advantage are- valuable resources, rare resources, imperfectly imitable resources and non- substitutable resources

Kozlenkova et al. (2014) portrays that valuable resources allows improving the effectiveness of the business operations However, this kind of resource makes the resources less valuable due to regular changes in customer’s demand. Rare resources are the resources that other firms are unable to imitate (Hinterhuber 2013). Additionally, imperfectly imitable resources signify the states when a competitor fails to copy other firm’s due to high cost of products and services. Lastly, in context of non- substitutable resources are a combination of all the former three resources that provides competitive advantage to the company.

In context of Woolworths, it can be said that in conventional times the valuable resources are considered as the offering of the quality products that is fresh and vegetables that is in recent times has changed a lot. Customers now want home delivery and automatic ordering of the items. Woolworths have sustained this aspect by formulating online services and free home delivery that attracts many customers to avail their services (Warnier et al. 2013). On the other hand, in terms of rare resources, Woolworths have naturally grown fruits and vegetables by local farmers the association of local farmer give their community strength for sustaining against their competitors. Moreover, the organic products can also be considered as rare resources that provide Woolworths an effective competitive advantage compared to other competitors like ALDI and Coles.

2.6 Strategic Direction 

Hamel (2012) describes that strategic direction symbolizes is the way to attain the organizational objectives and can be considered as business’s roadmap. This roadmap not only consider the better attainment of the goals but is also comprises of the maintenance of the organizational goals. Taken for instance, internet and technologies are the basic requirement in recent times, which is essential for accomplishing the business functionalities.

Thus, in future, Woolworths can include their employees in strategic business decision so that they can suggest some innovative ideas that can help in optimizing the business operation for attaining better productivity. In this way, effective business results can be attained.

Moreover, developing the social media promotion of their products can also be a strategic direction. IT department should also be formulated, who will manage all the online feedback given by the customers so that their future needs and demands can be identified and new business units can be formulated. In addition to that, implementing latest technology can also be an effective business direction.

Lastly, expansion of the employee development programs for the betterment of their skills and competencies will also be an effective step. A Research and Development department also generated so that exerts can suggest new nutritious products for better organizational outcomes.  

Conclusion 

Thus, it can be concluded that Woolworths Limited is a strategic business unit that comprises of many subsidiaries among which Woolworths Supermarket is taken into consideration.  Moreover, from the PESTEL analysis it can be evaluated that the nation Australia has enough recourses and the governing bodies also supports the organization to perform their business operations. Moreover, the concerned organization has an effective competitive advantage since they are using latest technology like online services and virtual store that offer customer to shop for their products with ease.

Reference List 

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