Woolworths is an international chain for retail supermarket started from Australia in 1924. With time, the company grew and became a successful international supermarket. The market share of the company is 80 percent in the retail supermarket in Australia which shows the strength of the company over the years. The company grew in terms of products and markets over the last whole century to grow as a company and become the leading supermarket in Australia. To analyze the success of the company over the years, the Ansoff analysis is provided below
Market Penetration
The company is a retail supermarket and it is not possible for a retail company to achieve success without penetrating the current market. Market penetration helps the company to gain more customers with little to no cost. It is also important to understand that market penetration leads the companies towards success. The market shares of the company in the existing locations without introducing a new product are 1.4 percent. It means that the company has put extra efforts to penetrate further in the existing markets and gain a larger market share. The strategy opted by the company for penetrating the market has worked in the favor of the company in past and current operations. On the other hand, competitors like Coles has seen a decline in the market share by 1.6 percent in the same year 2018.
Market Development
Keith (2012) mentioned that the physical retail stores have limited reach to the customers and it is essentially important for the retail stores to expand the geographical market. E-commerce is another way to develop new markets by reaching to far distanced customers. The company understood the importance of market development and keep the company on the track of entering into new markets. The company first expanded into different regions of Australia and then other countries such as the UK. The company now has more than 900 retail stores all over different locations of its existence. It is important for a company like Woolworths to keep expanding geographically because the grocery retail products are generally low involvement products and the customers like to buy it from the nearby supermarket. This is the reason that Woolworths has expanded with such speed and the company has grabbed 80 percent of the Australia retail market.
Product Development
According to King & Thobela (2014), Woolworths started with the basic grocery and with time, the company expanded the products and develop the whole product line. Firstly, the company was offering the Australian food and later, it entered in the New Zealand food items to expand their product line. The decision was made in order to capture a different group of people that have liking towards the New Zealand brands and products. The company did not stop here but they came up with a few more product developments. One of the major product development was made in the organic products as the company started to offer organic food products for the purpose of improved health and hygiene of the customers. The company portrayed it as a supermarket with the highest number of organic products which contributed towards the development of a positive image for the company.
Diversification
Diversification plays an integral role in the stability of a company as it diversifies the company into different related and unrelated businesses. Woolworths consider it highly important to have unrelated diversification so that the unstable situations for the supermarket can be handled effectively by neutralizing the negative impact. The company has diversified its business into financial services and insurance. It is done for the purpose of providing stability to the Woolworths group by starting a completely different business that would not be affected in case of any decline in the retail supermarket business. The start of this business is also helpful for the Woolworths supermarket as this has helped the company to take the financial services from its other business unit with much better effectiveness.
The four growth strategies were adapted by Woolworths and it has put the company on the path of success and growth making it possible for the supermarket to gain and retain 80 percent of Australia’s supermarket share.
References
Keith, S. (2012). Coles, Woolworths and the local. Locale: The Australasian-Pacific Journal of Regional Food Studies, 2, 47-81.
King, L., & Thobela, S. (2014). Woolworths farming for the future. International Food and Agribusiness Management Review, 17(1030-2016-83014), 161-166.
Morgan, R. (2019). Woolworths and Aldi grow grocery market share in 2018. Available at: http://www.roymorgan.com/findings/7936-australian-grocery-market-december-2018-201904050426