Australian Catholic Identifying Woolworths Strengths and Weaknesses Essay identify companys strengths and weaknesses of Woolworths Australia (625 words)
Australian Catholic Identifying Woolworths Strengths and Weaknesses Essay identify companys strengths and weaknesses of Woolworths Australia
(625 words)
ALL INFORMATION AND RESOURCES MUST BE AUSTRALIAN BASED
* Must have at least 4 references (Must be reliable and high literature)
*Must be Harvard Referencing
*I have attached the pages from the textbook, please read these.
*Use at-least one reference from the textbook
Hill, CWL, Schilling, M. & Jones, GR 2017, Strategic Management: Theory, 12th edn, Cengage, NY ISBN 9781305502338
Question 1
3.1. How can the Strengths and Weaknesses of your company generate a competitive advantage(CA) ?
Specify explicitly exactly what this competitive advantage(CA) is ?
Question 2
3.2: What resources and capabilities shape the strengths of the company?
Consider the four generic building blocks of competitive advantage (CA):
1.efficiency
2.quality
3.innovation
4.Responsiveness to customer?
Which of these seems to underlie the CA of the company?
Question 3
Chapter 5:
5.2: Using the theory on Business Level Strategies, identify what business-level strategy is your company pursuing? Provide evidence that supports your answer.
Useful links
http://fernfortuniversity.com/term-papers/swot/1433/1138-woolworths.php
https://www.woolworths.com.au/?ds_rl=1260749&ds_rl=1260758&ds_rl=1260749&cmpid=smsm:ds:GOOGLE:Brand%20-%20MTE%20(Pos%20RLSA):woolworths%20australia&gclid=CjwKCAjwlovtBRBrEiwAG3XJ-53FjrS_x3OLyHvZgQZmBnESlhpLGbUHeFz5Bl_s_Qttwm6zU96tRxoCA3AQAvD_BwE&gclsrc=aw.ds 96
Part 2 The Nature of Competitive Advantage
is di
whi
qua
and
Ef
Th
git
fe
Genius Bar). Comcast has a reputation for poor customer service. Thus, managers at
For example, Apple is known for excellent customer services in its stores (through the
Comcast might want to benchmark their customer service activities against Apple.
Although Apple and Comcast are very different organizations, the comparison might
yield useful insights that could help Comcast improve its performance.
Fourth, there are a number of process improvement methodologies that managers
ties. One of the most famous process improvement tools, Six Sigma, is discussed in
to identify opportunities for improving the efficiency and effectiveness of those activi-
more detail in Chapter 4. Finally, whenever there is potential for improvement within
take the necessary actions, (b) measure performance improvements over time against
goals, (c) reward managers for meeting or exceeding improvement goals, and (d) when
re
30
th
a value-chain activity, leaders within the company need to (a) empower managers to
?
goals are not met, analyze why this is so and take corrective action if necessary.
F
?
THE BUILDING BLOCKS
OF COMPETITIVE ADVANTAGE
Four factors help a company build and sustain competitive advantage: superior efficien-
cy, quality
, innovation, and customer responsiveness
. We call these factors the build-
ing blocks of competitive advantage. Each factor is the result of the way the various
value-chain activities within an enterprise are performed. By performing value-chain
activities to achieve superior efficiency, quality, innovation, and customer responsive-
ness, a company can (1) differentiate its product offering, and hence offer more value
to its customers, and (2) lower its cost structure (see Figure 3.6). Although each factor
Figure 3.6 Building Blocks of Competitive Advantage
Superior
quality
Superior
efficiency
Competitive
Advantage:
. Low cost
Differentiation
Superior
customer
responsiveness
Superior
innovation
Part 2 The Nature of Competitive Advantage
performing, an
Genius Bar). Comcast has a reputation for poor customer service. Thus, managers
For example, Apple is known for excellent customer services in its stores (through tl
Comcast might want to benchmark their customer service activities against Api
Although Apple and Comcast are very different organizations, the comparison mi
yield useful insights that could help Comcast improve its performance.
Fourth, there are a number of process improvement methodologies that manage
can and should use to analyze how well value creation activities are
ties. One of the most famous process improvement tools, Six Sigma, is discussed in
to identify opportunities for improving the efficiency and effectiveness of those activi-
more detail in Chapter 4. Finally, whenever there is potential for improvement within
take the necessary actions, (b) measure performance improvements over time against
a value chain activity, leaders within the company need to (a) empower managers to
goals. (c) reward managers for meeting or exceeding improvement goals, and (d) when
goals are not met, analyze why this is so and take corrective action if necessary.
THE BUILDING BLOCKS
prod
ness
OF COMPETITIVE ADVANTAGE
Four factors help a company build and sustain competitive advantage: superior efficien-
cy, quality, innovation, and customer responsiveness. We call these factors the build-
sets
just
faci
fixe
duc
ing blocks of competitive advantage. Each factor is the result of the way the various
value-chain activities within an enterprise are performed. By performing value-chain
activities to achieve superior efficiency
, quality, innovation, and customer responsive-
ness
, a company can (1) differentiate its product offering, and hence offer more value
to its customers, and (2) lower its cost structure (see Figure 3.6). Although each factor
Qu
Figure 3.6 Building Blocks of Competitive Advantage
??
cal
des
atti
rive
Superior
quality
and
oth
dif
Superior
efficiency
Competitive
Advantage:
Low cost
Differentiation
Superior
customer
responsiveness
ago
que
are
lev
ers
bu
Superior
innovation
frc
be
wi
bu
is
a
shares
that ar
which
such, i
A
return
Part 2 The Nature of Competitive Advantage
time is the time it takes to fill customer orders. For a bank, it is the time it takes to
delivered or a service to be performed.” For a manufacturer of machinery, response
process a loan, or the time that a customer must stand in line to wait for a free teller,
fashion retailer, it is the time required to take a new product from design inception to
For a supermarket, it is the time that customers must stand in checkout lines. For
ish fashion retailer Zara minimizes this). Customer survey after customer survey has
placement in a retail store (see Strategy in Action 3.2 for a discussion of how the Span-
shown slow response time to be a major source of customer dissatisfaction. 19
Other sources of enhanced responsiveness to customers are superior design, supe-
responsiveness to customers and allow a company to differentiate itself from its less re-
rior service, and superior after-sales service and support. All of these factors enhance
and charge a premium price for its products. Consider how much more people are pre-
sponsive competitors. In turn, differentiation enables a company to build brand loyalty
In 2012, a two-page letter sent by overnight Express Mail within the United States cost
pared to pay for next day delivery of Express Mail, compared to delivery in 3 to 4 days.
about $10, compared to $0.48 for regular mail. Thus, the price premium for express de-
wher
tal tu
into
veste
basic
F
stra
retu
for
sale
leve
of
pur
the
inc
th
livery (reduced response time) was $9.52, or a premium of 1983% over the regular price.
ANALYZING COMPETITIVE ADVANTAGE
AND PROFITABILITY
the
??
ca
??
In order to perform a solid internal analysis and dig into how well different value-chain
activities are performed, managers must be able to analyze the financial performance of
their company, identifying how its strategies contribute (or not) to profitability. To identify
strengths and weaknesses effectively, they must be able to compare, or benchmark, the
performance of their company against competitors, as well as against the historic per-
formance of the company itself. This will help them determine whether they are more or
less profitable than competitors and whether the performance of the company has been
improving or deteriorating through time; whether their company strategies are maximiz-
ing the value being created; whether their cost structure is out of alignment compared
to competitors; and whether they are using the company resources to the greatest effect.
As we noted in Chapter 1, the key measure of a company’s financial performance
is its profitability, which captures the return that a company is generating on its in-
vestments. Although several different measures of profitability exist, such as return
on assets and return on equity, many authorities on the measurement of profitability
argue that return on invested capital (ROIC) is the best measure because it focuses on
the true operating performance of the company.20 (However, return on assets is very
similar in formulation to return on invested capital.)
ROIC is defined as net profit over invested capital, or ROIC = net profit/invested
capital. Net profit is calculated by subtracting the total costs of operating the com-
pany from its total revenues (total revenues total costs). Net profit is what is left over
after the government takes its share in taxes. Invested capital is the amount that is
other assets. Invested capital comes from two main sources: interest-bearing debt and
invested in the operations of a company: property, plants, equipment, inventories, and
shareholders’ equity. Interest-bearing debt is money the company borrows from banks
and those who purchase its bonds. Shareholders’ equity is money raised from selling
Port 2 The Nature of Competitive Advantage
82
intellectual property
Knowledge, research,
and information that is
owned by an individual
or organization
The codified intellectual property that a company has created over time represents
another important factor of production. Intellectual property takes many forms, such
as engineering blueprints, the molecular structure of a new drug, proprietary software
powerful brand based on its reputation for high-quality, elegantly designed computing
property through patents, copyright, and trademarks. For example, Apple has built a
devices. The Apple logo displayed on its hardware products symbolizes that brand.
Apple product. It is protected from imitation by trademark law.
That logo is Apple’s intellectual property. It assures the consumer that this is a genuine
as land, labor, managers, property, and equipment. They also include more advanced
In sum, a company’s resources include not just basic factors of production such
factors of production such as process knowledge, organizational architecture, and in-
tellectual property. For example, Coca-Cola has been very successful over a prolonged
just labor, land, management, plants, and equipment, but also the process knowledge
period in the carbonated beverage business. Coke’s factors of production include not
about how to develop, produce, and sell carbonated beverages. Coke is in fact a very
Coke has an organizational architecture that enables it to manage its functional pro-
strong marketing company-it really knows how to sell its product. Furthermore,
cess well. Coke also has valuable intellectual property such as the recipes for its leading
beverages (which Coke keeps secret) and its brand, which is protected from imitation
by trademark law.
Similarly, Apple is more than just a combination of land, labor, management,
plants, and equipment. Apple has world-class process knowledge when it comes to
developing, producing, and selling its products. Most notably, Apple probably has the
best industrial-design group in the computer business. This design group is ultimately
responsible for the format, features, look, and feel of Apple’s innovative products,
including the iPod, iPhone, iPad, and its striking line of desktop and laptop comput-
ers. Apple also has a strong organizational architecture that enables it to manage the
enterprise productively. In particular, the industrial-design group has a very powerful
position within Apple’s organizational structure. It initiates and coordinates the core
product development processes. This includes ensuring that hardware engineering,
software engineering
, and manufacturing all work to achieve the product specifica-
tions mapped out by the design group. Apple is probably unique among computing-
device companies in terms of the power and influence granted to its design group.
Furthermore, Apple has created extremely valuable intellectual property, including the
patents underlying its products and the trademark that protects the logo symbolizing
the Apple brand.
odlo 10
basic factors
of production
Resources such as land,
labor, management,
plants
, and equipment.
advanced factors
of production
Resources such as
process knowledge,
organizational
architecture, and
intellectual
Thus, as in the Coke and Apple examples, the resources (or factors of production)
of any enterprise include not just basic factors of production but also advanced factors
of production. The important point to understand is that advanced factors of produc-
tion are not endowments; they are human creations. Skilled managers can and do cre-
ate these advanced factors of production, often out of little more than thin air, vision,
and drive. Apple founder and CEO Steve Jobs, in combination with his handpicked
head of industrial design, Jonny Ive, created the process knowledge that underlies
Apple’s world-class skills in industrial design, and he built an organizational structure
that gave the design group a powerful central role.
To summarize: An expanded list of resources includes labor, land, management
,
contribute to a company’s plants
, equipment, process knowledge, organizational architecture, and intellectual
competitive advantage.
property. As shown in Figure 3.1, a company is in effect a bundle of resources
Part 2 The Nature of Competitive Advantage
Figure 3.4 Comparing Apple and Samsung Smartphones
Apple
Apple creates
more value
Apple can charge
higher prices
Samsung
PC
Apple makes more
profits per unit
P-6
Apple has a lower
cost structure
?
?
The most beneficial position for a company occurs when it can utilize its
that consumers value more highly than that of rivals (that is, they derive more
utility from it), and which can be produced at a lower cost than that of rivals.
This is an outcome that many companies strive to achieve. Consider again the
example of Apple and its successful iPhone offering. Apple creates value for con-
sumers with the elegance of its design for the iPhone, its intuitive, easy-to-use
Apple has encouraged a healthy ecosystem of developers to write third-party ap-
interface, its onboard applications such as iTunes and iCloud, and the fact that
plications that run on the phone
. Apple has been so successful at differentiating
its product along these dimensions that it is able to charge a premium price for
its iPhone relative to offerings from Samsung, HTC, and the like. At the same
time, it sells so many iPhones that the company has been able to achieve enor-
mous economies of scale in production and the purchasing of components,
which has driven down the average unit cost of the iPhone. Thus, even though the
iPhone makes use of expensive materials such as brushed aluminum casing and a
gorilla-glass screen, Apple has been able to charge a higher price and has lower
costs than its rivals. Hence, although Samsung sold more units than Apple in 2013,
Apple was able to capture 75% of all profit in the global smartphone industry for
that year. Samsung captured the remaining 25%, with no other smartphone sup-
plier making money.
THE VALUE CHAIN
All functions of a company-production, marketing, product development, service
,
information systems, materials management, and human resources have a role in
a
lowering the cost structure and increasing the perceived value of products through
differentiation. To explore this idea, consider the concept of the value chain illustrated
in Figure 3.5.” The term value chain refers to the idea that a company is a chain of
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