SWOT Analysis of Woolworths

In competing in retailing industry, the company has many associated strengths as following:

The strengths of Woolworths refer to variety of products that the company offers in which as general retailers the company sells clothing to electronics. In terms of clothing, for example, the company takes benefits of abundant demand

Woolworths Official Website Source: www.woolworths.co.uk. In addition, retailers like Woolworths may provide better products when compete with other retailers as the result of intense atmosphere in retailing industry in which the company only needs a relatively ‘light’ capital structure.

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Woolworths have attractive approach to strengthen their offers. In addition to their high street stores, the company also develops e-commerce that enables customers to shop online.

Weaknesses

The major weaknesses of Woolworths is weak brands that the company posses. This is true since in the UK, specialized retailers like Dixons, Comet, Marks and Spencer, and many others may encourage customers to buy products in their stores. In addition, there are three weaknesses of Woolworths as following:

Facing competition from specialized retailers that have extensive offering from particular products like Dixons that becomes specialist in electrical retailing (DSG International plc. 2006) Serving customers in specialized market with different retail brands instead of various brands with diverse brands Lack of massive expansion into foreign markets in order to generate more revenue from them

Opportunities

Retailing industry provides many opportunities, especially for general retailer like Woolworths in which they may take benefits of growth in each segment.

For example, if electronic industry is falling, the company may still have benefits from other industry like clothing or toys. In addition, the increasing number of internet users provides great opportunities for Woolworths to provide their service into foreign market in addition to UK market.

Designing own brands. In addition to the sales of suppliers’ brand, Woolworths may design and assign suppliers to manufacturer products under Woolworths brands in order to succeed, the company must build suitable image such as young and trendy etc.

Producing a particular image. Despite of some segments being less diversified, other segments are wide open for creativity. The opportunity can be used to create a certain image that could win a segment of the market. Levi’s jeans for example, create a distinctive image to be associated with young and adventurer person. Growing market. Shows description of UK retail market in which Woolworths may take benefits of growing market in several segments such as soft drink, cosmetics, and toiletries.

The threats to Woolworths relate to nature of competition between general and specialized retailers as following: Specialized retailers like Dixons, Marks and Spencer, and Comet may endanger Woolworths in electronics products since customer may refer to the two companies when thinking about buying new home electronics instead of going to Woolworths. In clothing industry for example, Marks and Spencer exists in extensive locations. Currently, Marks and Spencer has 383 stores in United Kingdom, 7 in Ireland, and 10 in Hong Kong.

The key success factor is the company has 175 franchised outlets throughout the world (“Company Profile” 2004). Price Wars. Since competition between retailers are intense, the situation may conduct price wars that in turn will bring down the profit margin In selling garments, there are significant threats including those as the result of intense competition in which well-known brand does not only target high end customers but also low-to-middle ones

Customers have extensive powers to switch from one retailer to another Attractive competitor offering that enable customer to buy products with flexibility of payment, improved customer services, attractive retention program that encourages customers to buy in the retailers repeatedly. Questionable internet security may prevent consumers from buying products via Internet. This is because the existence of several identity stealing like Phishing continues growing in number.

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