Business Failure - Woolworths Plc - Essay Example

Download file to see previous pages The deluge first began in the financial markets in 2007, and at first, businesses deluded themselves into thinking that the damage would be confined to the financial sector. It was not. The following year saw liquidity dry up, businesses lose their orders or default on their payments, and layoffs become widespread. Then, businesses started closing; the larger conglomerates relied upon government bailout money, at the risk of nationalization, but “too large to fail” was exactly that – critical industries and the economic framework relied upon the survival of these key enterprises (Peters, Shane & Torgerson, 2009).

While some companies were saved at all costs – especially at the cost of public money being used to purchase toxic assets – other companies were left to die out because they were not crucial to the coming recovery. Several of these hardest hit are in the retail sales business. And in the United Kingdom, one of these companies that had to close its books for the last time was Woolworths, the high-street retail firm in existence since 1909, and owned by the Woolworths Group plc.

This case study shall deal with the phenomenon of business failure and its occurrence in the UK retail sector. Highlighted will be the case of Woolworths plc, which presents several controversies concerning the circumstances surrounding its closure. The case of Woolworths defies an easy and clear-cut solution; as many serious observers believe that the company should not have been closed down because its two or three core businesses could have been demerged and allowed to operate; apparently, the administrators and regulators felt otherwise, and finalized the group’s demise. A small remnant of Woolies (as it is affectionately called) continues to operate as an online retailer, having been acquired by the Shop Direct Group (Anon, Cabinet Maker, 2009).

This study shall examine the case of Woolworths from the point of view of theory, and from the indicators and accounts that comprised the facts of its operations. The theory shall first be elaborated on, dealing with symptoms and causes of business failure. A brief history of the company shall be presented as a narrative, followed by an analysis of the business according to its organic functions. The analysis shall proceed from the general economic environment to the analysis of the retail industry with the use of Porter’s five forces model, and the PESTEL framework. ...Download file to see next pages Read More