Strategic Relevance and Sssurance of Sustainability

Question: Discuss about the Strategic Relevance and Sssurance of Sustainability. Answer: Introduction: The current essay aims to evaluate the strategic management practices of an Australian firm, which has been in the news for the past two years. Therefore, Woolworths Group has been chosen to fit the purpose of the essay. In 2014, Woolworths Group has made modifications in leadership related to the supermarket business by appointing Brad Banducci as the managing director of the food and liquor business of the organisation (Woolworths.com.au, 2016).Along with this, the dispute with its US partner over the sale of the failed Masters Hardware Chain in 2016 has been the major outbreak in the Australian retail industry. Thus, the essay demonstrates different theoretical concepts related to strategic management of Woolworths Group in terms of industry attractiveness, resource-based view and competitive advantage. Application and evaluation of theoretical concepts of strategic management to Woolworths Group: The retail industry in Australia has maintained a steady growth of 3% rise in current value in 2016. Despite such positive trend, the Australian consumers have reduced their retail consumption level due to low-income growth. The internet retailing in the nation has outperformed store-based retailing in 2016. This has compelled the retailers to increase their presence in the digital platforms for providing greater convenience and satisfaction to the consumers (Bailey Bailey, 2016). The grocery retailers have experienced a steady current value growth in 2016 due to the success of the discounters within the nation to gain significance through the aggressive diversification of Aldi. However, the intense competition and price discounting has limited the growth rate of the retailers. Wesfarmers is the leading retailer in the Australian market due to its strong performance in stationeries, mass merchandise and office supply stores, which has helped in providing competitive advantage in the form of highest market share. The Australian retail industry is expected to grow at a CAGR of 3% over the upcoming period because of quick adoption of modern technologies and online services. The resource-based view of Woolworths Group could be examined in terms of resources, capabilities and core competencies. These include effective supply chain, brand reputation and skilled higher-level management. The effective distribution network of Woolworths is a blend of both tangible and intangible assets comprising of technological efficacies and relationships with the suppliers. This has been highly valuable, as it helped in reducing costs throughout the overall logistics network for achieving a greater operating profit (Arli et al., 2013). No other resource could be used as substitute against the cost savings level. However, it is necessary for Woolworths to have favourable brand image and higher product quality along with effective distribution network. Thus, supply chain network is not the sole factor to achieve distinct competency, instead other competitive advantages need to support it (Booth Coveney, 2015). The reputation of Woolworths as the fresh food people has been developed with the passage of time. This has been achieved with the help of positive customer experiences along with its products due to regular procedures of quality assessment over its supply chain. Thus, brand image delivers significant differentiation to its rivals, which has resulted in increased customer satisfaction level. No other resource could act as a substitute, as the brand image provides benefits that are non-substitutable (Cheng, Green Ko, 2014). However, most of its competitors, especially Wesfarmers has started to sell quality products, since it is easy to imitate. In other words, quality products and fresh food have been the basic customer expectations in the recent era. Henceforth, brand image could not be adjudged as the distinct competitive advantage; instead, it is a point of parity, which Woolworths needs to maintain to remain competitive in the Australian retail industry. Despite the rising rate of inflation and competitive pressure, Woolworths has achieved a higher level of growth, which is more than the anticipated level. The courtesy could be provided to Brad Banducci, the managing director of the food and liquor business of the organisation after his appointment in 2014. In addition, the relationship between the top management of Wal-Mart and Woolworths is an important factor, which has enabled Woolworths to win over Costco, an US retailer that entered the Australian retail market in 2008 (Arli et al., 2013). Therefore, the ability of the higher-level management has steered Woolworths through the existing economic conditions to achieve greater rate of growth for making it a valuable resource. In other words, no other resource could substitute the skills and expertise of the top management of Woolworths (Frederick Rose, Hawryszkiewycz Kang, 2014). Along with this, the competitors would find it difficult to imitate this resource; however, it is not rare, as most of the companies in the sector have effective senior management. Hence, effective top management is not the sole competitive advantage; however, combination with factors like brand image and supply chain has enabled Woolworths to be one of the leaders in the Australian market. After critical evaluation of the above theoretical concepts and their impact on the strategic management practices of Woolworths, both short-term and long-term recommendations have been suggested to enhance the practices further in future. In the short-run, Woolworths needs to focus more on advertising to represent the way its fresh group of healthy meals matches with the daily routines of the customers. This would help in brand recall of the organisation in the minds of the consumers, which is likely to increase repeat purchases. In addition, after creation of advertisements, which associate Woolworths to easy, healthy for preparing meals available at affordable prices, would raise the probability of making it similar with healthy and convenient consumption. This is a significant differentiation factor in the market, in which lower prices and quality food are the points of parity. In the long-run, Woolworths needs to enhance its in-store environment further in its current program of store refurbishment. The inclusion of soothing and cheerful music and enthusiastic staffs would improve the shopping experience of the customers. Moreover, Woolworths could think of investing in profitable businesses in future. As the Australian retail industry is expected to maintain a limited growth rate; therefore, diversification of the business into home and hardware coupled with organic produce of up-market would help Woolworths to gain better sales growth in future. Conclusion: From the above discussion, it has been found that the Australian retail industry has failed to experience a faster growth rate over the years due to the fall in purchasing power of the consumers. From the resource-based view of Woolworths, it has maintained effective supply chain network, brand image and skilled top management. However, all these competencies are relatively easy to imitate, which has helped Wesfarmers to enjoy the leading market share in the industry followed by Woolworths. Therefore, Woolworths is recommended to focus more on advertising in short-run and diversifying its business operations in the long-run. References: Arli, V., Dylke, S., Burgess, R., Campus, R. Soldo, E. (2013). 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