The Dynamics that Results to the Challenges at Woolworth Company - Case Study Example

The Woolworth’s company Introduction Decline in market trends in predominant among many companies globally. One such organization is the Woolworth’s. This paper seeks to explain the various dynamics that results to the challenges experienced by the company and various diagnoses that may be implemented by use of Kotter’s 8-Step Approach  Company Overview  Woolworth Company is a New Zealand and Australian company with affiliates in the UK, which deals with a variety of products that majorly deals with supermarket operation. Other vital operation comprise of petrol sale, liquor, consumer electronics through Dick Smith,Big W general merchandise stores and food production industry. The food product majorly retails in the internet food retailing through Homeshop and GreenGrocer that consequently offers banking products from CBA .It plays a major role in both countries as it is a major investor economically, socially and environmentally .Nevertheless the retail chain company has experienced various dynamics as it has been affected by both internal and external challenges that consequently affects its trading platforms. Internal factors Marketing criteria are most imperative for any successful business. The need arises for the corporation to exhibit an impressive clear theme in their advertisement and marketing criteria. Woolworth has been largely affected by some human-problematic based issues whereby clients have asserted before conducting purchase, the stores employee’s behavior is put under considerations. Woolworth has received numerous claims on this aspect as survey conduct assert that most of its employees are rude (Hammer and Champy, 1993) Woolworth’s manager asserts that the company’s advertising and marketing strategy majorly bases on three categories namely: family, entertainment and home. On the contrary some of its critiques asserts that whereas other retail supply chain stand out in relation to their marketing theme; Woolworth consequently has nothing to show off .This affects directly its branding or marketing issue that would affect the companies in the future. Secondly consumer –demand determinants are factors that affect a companys retail business. In a recent survey conducted in the UK markets exhibit that there is a variety of aspects that buyers from the region consider while making purchases in the retail chain stores. They include: convenience, brand recognition, quality of items and price (Chopra and Meindl, 2000). Woolworth seems to have failed in the ease of access of goods in the retail shop .Convenience basically means the ease of reach of commodities in the retail stores. In the case where the commodities are placed haphazardly, the consumers might not be enticed to revisit the retail store once more to conduct purchase. The organization of commodities, critics argue, that is not consumer friendly as one would expect related commodities to be placed in the same section relative to Woolworths arrangements. As a result sense of appeal in Woolworths outlets or retail are quite deficient however it can be argued that this form of arrangement contributes to its uniqueness. (Price Waterhouse, 1995) Despite Woolworth’s brand recognition and quality has been highly praised, other buyers assert their dissatisfaction with the commodities. Most of these high end buyers consider themselves ‘jack of all trades but a master of none as they would prefer expensive products that might not be available to them in the period of purchase .Contrary to these claims a retail chain competitiveness is based on price of its commodities. Unlike Asda and Tesco, Woolworth’s products are way expensive relative to these retail stores that offer the same products thus reducing its demand in the market trends. As a result need arises effective decisions need to be put in place in response to these changes. External factors A company’s operational aspect is paramount as they affect the overall marketing strategies. Woolworth retail stores have risen in the UK thus rise in competition in the region .The retail chain is huge as the demand has increased for their merchandise. With reference to this, Woolworth is not exporting oriented but are sourced from outside consequently making it forecast difficult. Interestingly most retail industry has slowly outgrown by supermarkets. The main reason is that most food retail shops that used to offer only food products are presently offering a variety of products this preference by consumers to purchase products from these supermarkets. The sale of non house merchandise within the retail entity is no longer a reserved on specific goods. This competitive nature affects Woolworth’s company productivity and performance. (Porter, 1985) Market size is a paramount factor affecting any business as the rate of growth shows the numbers of consumers present to carry out purchase at a given time. Survey in New Zealand and UK reveal that the chain sector is slowly advancing to levels of saturation. In UK for being instantiated every type of product are easily accessible to the consumers .For instance old suits can be found in Argos whereas music CD’s can be gotten from Zavvi .As a result Woolworths is placed in a competitive position in an already stagnating market. Globalization Globalization is defined as the augmented level of contact linking a certain entity and the whole world. Through globalization reciprocated consideration, world citizenry and personal friendship are made. Nevertheless this might not be the case in terms of the business world. Globalization may not be positive as it has facilitated for augmented competition resulting to difficulty to maneuver in the case where an individual is deficient of change and Woolworth is no exception. The UK based Woolworth was a brainchild of the US based retail .Due to this , business structures as well as knowledge had to be transferred to the new region. Contrary to these it meant that the organizers had to create a local solution for the new ventured environment. Over time the UK tradition has gradually shifted as the increased exposure levels as made the consumers aware of their rights and ways of getting cheap bargains consequently reducing Woolworth’s performance as the consumers are in search of cheap products. As many retail stores are available Woolworth has been pushed to the limit in reference to this competition .Globalization has promoted information driven consumer culture since with the improved technology has brought about awareness. With the push of a button consumers can acquire vital retail information consequently diminishing demand for Woolworth merchandise that do not represent the most preferred money. Shopping trends have adversely been affected as it has provided more job opportunities for the people that are the consumers. As a result many individuals travel worldwide in search for business, education or working for multinational companies. Time on the other hand is not a dispensable entity as more time is spent on moneymaking entity thus reducing time spent in shopping. During shopping expedition consumers would prefer to spend little time as possible in such outlets. Diagnosis As globalization has catalyzed for adoption of information technology and a result more consumers that are aware of the market situation thus they would be less accustomed to particular brands unless that specific brand offers best or competitive value of money. Woolworth has been slow in implementing such aspect of globalization. As the consumer is more aware of the market situation Woolworth should work in addressing their price range and quality of their commodities in order to attract the informed consumers. This would enhance their clientele base. Arguably it can be stated that Woolworths have not been assertive in responding to the globalization aspect that has brought about job opportunities. As many consumers would want to spend less and less time in the retail stores, products or merchandise should be located in a way that the consumers can acquire this product can be accessed easily and faster to save time. As a result Woolworth’s retail store format should be oriented in a way to meet the consumer needs. In comparison to other store market Woolworths needs to change its product orientation and placement in their stores to enable consumers to acquire what they require .Often consumers have difficulties in accessing these products unless assisted by the store employees consuming more time. (Scheer, 1999) In relation to sourcing of supplies, it is paramount for the retail entity to rise to the probability of various retail chain store performing better than they do. This has been attributed by the fact that these upcoming retail stores offer same quality products at much lesser prices and also due to dependency on suppliers who offer high quality goods. The retail store has been overwhelmed by the augmented competition from rising multinational chain companies. Globalization has offered better operational structures that facilitate better productivity and thus has given better outcome for these multinational companies. Despite Woolworth’s slow response, the need arises for Woolworth to start competitions with the multinationals services and products regardless of whether they meet or go beyond the offerings. This would augment marketability and profitability. Woolworth should therefore look for the means in which they can promote their development through favorable service delivery (Sterman, 2000) As Woolworth majorly depends on outsourcing their products from European based manufactures, they should as well source their products from Asia based company like china like their competitors which are relatively cheaper. Adoption of information would be paramount as these would boost their online sales. As a result the company will need to work on adding value to their name through improved services and products as their products are barely recognized in the future markets. Kotter’s 8-Step Approach STEP 1: Creating a Sense of Urgency Establishing urgency among its stakeholder and leaders is fundamental in order to acquire the cooperation needed to catalyze imperative change. These would be enhanced by finding chances in the crisis to better point up the need for change as is with the case of globalization and the need to adopt technology information. In the case where leaders ignore this, dealing with no-noes would assist others see the necessity would be imperative as leaders despise the difficulty to shift from comfort zones. The leaders with the willingness to drive the company would compel the same motivation to the employees. STEP 2: Creating the Guiding Coalition Putting in place a group with capabilities to lead change would develop the required vision. These coalitions should have the needed objective acquired through members having the same concert. Additionally the group must not be of low credibility as it would lead to a consequent initiative collapse. In this step team decision making should be emphasized as many ideas often lead to better and favorable conclusions. The team should reflect: expertise, position power, credibility and leadership. The team should comprise leaders and managers whose role would be controlling the process and driving the change respectively. STEP 3: Developing a Change Vision A clear vision is vital as: it’s a representative of numerous detailed decisions, acts as a motivation factor to its workers and it effectively coordinates actions of various people. Frequently, vision act as a representative of a larger system that comprises plans, budgets and criterion put in place. Better results are achieved if the vision emphasizes on sacrifice in the betterment of the future of the enterprise. To achieve success a vision must put into account current realism of and setting forth ambitions. In conclusion the vision should be imaginable, desirable, feasible, focused and communicable to facilitate for communication. STEP 4: Communicating the Vision for Buy-in In most cases stalled transformation is brought about by under communication and inconsistency. In order to effectively communicate the vision hour to hour announcement activities should be initiated realized through memos, emails, meeting and presentations. Ensuring the people understand the vision is paramount as people would work with the intended goal. In this form of communication the vision should be vivid, simple (using fewer effective words) and invitational (two way communication).The “walk the talk” basis should be incorporated by the leaders as they are the employees’ role models. STEP 5: Empowering People and Removing Barriers Getting rid of structural, skills, system and supervisory barriers would assist a great deal. In the case where an organization would require to be customer based find its structures and resources responsible for services and products. On the other hand those that require local responsiveness would incorporate layers of management. The department would assist a great deal as issues among may be reported for proffered solution. In addition management information systems assist in successful vision change as up-to-date competitive information and market analysis is most effective in getting feedback loops. Honest dialogue between the leaders and troublesome supervisors would be imperative as it acts as a step in solving problematic solution. It not only gets solved but improves leader - supervisor relationships as well. STEP 7: Consolidating gains and producing more change Resistance can be experienced on different levels during initiating change. This might be experienced in the case where victory has been acquired .Some may suggest taking a break after an enthusiastic success. The break may, for instance, reduce the momentum gained. The consequences, in most cases, may be dangerous as regression would be an experienced and consequent collapse. Once this start rejuvenating, gaining the aggressiveness may be a daunting task. In order to get the required success short term wins should be clearly outlined. This would be imperative in giving morale to those involved in the risk taking and help boost their efforts. Additionally they act as a basis of fine tuning the visions and plans. The short term wins are an evidence of hard work. Improvements assist people to unblock the nature of change resistance. STEP 8: Initiating new approaches for culture sustainability. As culture and tradition is a powerful force Change is paramount in creating a new and supportive culture for the betterment of the company. New practices must be rooted in the initiated culture that was initialized earlier. Any individual joining an organization is initiated into the culture indirectly.   Conclusion Globalization has been a major cause in the decline of the Woolworth company that has been facilitated due to failure to react to certain imperative aspects. However if the diagnosis and Kotter’s 8-Step Approach is implemented better results would be expected. References Chopra, S. and Meindl, P. (2000): Supply Chain Management - Strategy, Planning and Operations; Prentice Hall College Division Scheer, A. (1999): ARIS - Business Process Frameworks; Springer Kubeck, L. (1995): Techniques for Business Process Redesign - Tying It All Together; Wiley- QED Publication Hammer, M. and Champy, P. (1993): Reengineering the Corporation - A Manifesto for Business Revolution; Harper Business Book Porter, M. (1985): Competitive Advantage - Creating and Sustaining Superior Performance; Free Press Price Waterhouse (1995): Change Integration Team - Best Practices for Transforming Your Organization; Irwin Sterman, J. (2000): Business Dynamics: Systems Thinking and Modelling for a Complex World; McGraw-Hill Read More