The Future of Woolworth Company - Case Study Example

The Future of Woolworth Company Executive Summary The world we live in is slowly experiencing paradigm shifts in technology hence people give their thoughts with regard to this advancements. This paper encapsulates the changes that the company is going through in line with its missions. The paper further illustrates the management techniques used to analyse the overall position of the company in the market. Moreover, the paper brings to light the company’s strengths, weaknesses, opportunities in the market that the company can capitalise on and the factors that pose as a threat to the development of the company. In a nutshell, it also gives recommendations on the new goals and strategies that if acted on will give the company an edge over the other competitors in the market. Introduction Woolworth was founded on February 22, 1878 by Frank Winfield Woolworth. Its gates were first opened to customers in Utica, New York but later closed down before shifting to Pennsylvania. The changing dynamics of the market made the company realise strained profits in 1987. The mission of the company is to lay emphasis on the improvement of the already laid down strategies the main being offering the best products at the cheapest market prices; “to be the heart of the community and the best loved retailer for kids, home and family leisure”. However, the company has suffered from a bad business strategy leading to the closure of all its stores in Great Britain hence laying-off of 27000 employees. This was a big blow to the company and the economy of United Kingdom in general. http://news.bbc.co.uk/1/hi/7811187.stm,” Final Woolworths stores shut down”. It is the reason for making this report. The report will employ the use of management tools as SWOT and Porters Competitive 5-Forces analysis of the company relative to the market. The SWOT analysis will enable the management know of their strengths, weaknesses, available opportunities and the threats in the market. This is also true with the Porters Competitive 5-Forces analysis. The report will come up with new goals for the company that are in line with the mission and vision of the company. Moreover, it will bring to light the strategies put in place to help achieve the new set goals. This will be made possible by coming up with a new business strategy, that will be helped by a world class information system and the two merged by information technology. This will give the company an edge over other competitors like Aldi Gmbh & Co. KG Essen, Metcash Ltd. and Wesfarmers limited that are yet to take up the use of better technologies and innovations. Business Strategy James, Q (1980) defines a business strategy as a pattern or plan involving harnessing an organisation’s main goals, set of actions and policies into a single entity. He further states, a well formulated strategy helps an organisation in taking records (data) and resources in an outstanding and articulate manner taking into account its internal competencies, shortcomings, predictions of change of the environment and calculated moves by their competitors. The initial stage requires a full understanding of one’s selves as well as their environments. This is realised by: A. Analysing the context and the environment 1. Analysing your organisation There is need to re-examine the company’s strengths and weaknesses. A good business strategy makes good use of the company’s mileage in strength without exposing their loop holes. Woolworth has several strengths .e.g. the ability to lower the cost of their products; and weaknesses e.g. having to extend offers of two or more products longer as well as adaption to technology. 2. Analysing one’s environment A company needs to critically evaluate their environment and predict the direction it is likely to take. There is an opportunity for Woolworth in Africa as the continent’s potential is yet to be tapped by many in the industry. 3. Analyse customers and stakeholders A good strategy focuses on the concept of winning in the market, hence their customers are satisfied and the stakeholders are a happy people. 4. Analysis of the competitors This sheds light on the markets reception of products relative to those of their competitors. It is important to study the competitor comprehensively so as to get a clear image of areas to develop on. B. Identifying strategic options This lays emphasis on the threats and opportunities and ways of making good use of the threats present in the market. C. Evaluation and selection of options This is the final stage and it beckons developing the best business strategy. The options put in place should cater for all the predicted threats. Moreover, a good strategy caters for a projection of three or more years. With a drop in profit margins for the company, there is need to diversify more in other ventures apart from the ones they are already in. They could tap into the resources of the “dark continent” that for several years have lain bare. The economy of most African countries is rising and becoming more stable hence their ability to purchase. Therefore, there is need to open more stores in African countries more so promising economies like Nigeria, Egypt, Libya and Kenya. In Africa, the company only has stores in South Africa. There is also need to become more innovative with their products hence set trends in the fast growing fashion industry. This can be accomplished by being original, better packaging and branding as well as bringing on board extra features to their wide range of products. The company’s biggest customers are the middle class. However, there is a steady increase in the number of people at the base of the economic pyramid (it currently stands at 5.5 billion). The company should make products that reach out to the many people who cannot afford the products currently in the market. This will ensure that they have wider customer base hence higher margins. A good business strategy needs a good information system to support it. What is an Information System, IS? It is a collection of people and computers working together to synthesise and process data to give a meaningful information. They process, store and share information aiding in decision making, connecting, visualising and helping in control and analysis of the company’s database. More so, it helps the managers and the workers analyse problems, share a vision of the problems that were mathematically complex and creation of new products. Other scholars are of the school of thought, an information system being software that helps run databases installed in computers. The use of IS depends on the sector which it is to be applied. Information Systems store and manage a company’s data. They also streamline planning and arrangement of a company’s database. Woolworth’s information system should therefore incorporate: a) Transaction processing systems This system gets inputs from users processing it to get required information. b) Customer relationship management systems The system analyses the efforts by sales and marketing department getting the analysed results to the stakeholders. This helps with tracking the market dynamics as well as customer feedbacks. Hence, the company and its customers interact more hence meeting the expectations of each other. c) Business intelligence systems They often are complex as they involve the identification, extraction and analysis of a given set of data needed for making key decisions in the company. d) Knowledge management systems They help with categorising sets of knowledge and relaying them to the relevant personnel. This ensures innovativeness, improved performances, integration and security of information. This would mean that one’s competitors don’t get a leak of the above highlighted business strategies. What is Information technology, IT? The internet has made the world a “global village”. Therefore, there is a mutual interdependence of services, users, network access providers and infrastructure. This enables customers to make purchases, references and enquiries online without walking the long distances to the physical addresses of the retail shops. However, to make up this structure of dependency requires networking hardware, network services and networking software. Networking hardware i. Routers ii. LAN cards iii. Cables iv. Wireless routers v. Cables vi. Switches Network services i. Wireless protocols ii. Satellite iii. IP addressing iv. DSL v. T-1 line Networking software i. Firewall ii. Network operations and management iii. Network security applications iv. Operating systems Conclusion For the company to get back the grip of the market it once sat at the helm of, new goals and strategies that are in line with the changing times and technological advancements must be adopted. The company has to broaden its wings in terms of products and assets. Moreover, there is need to tap into Africa’s economy that is fast-growing. Africa has majority of her citizens living below the poverty level hence producing goods affordable to this mass will ensure the company realises profits. This strategy will be null and void without the help of good Information Systems and Information Technologies. Therefore, these systems working in handy with the strategy and goal will put a smile to the faces of the shareholders and the customers who are core to the success of a business. Reference list: Bocij, P., Greasly, A., & Hickie, S. (2008). Business information systems: technology, development and management for the e-business. 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