Force | Power | Justification |
Customers | HIGH | Switching to a different supplier i.e. Coles would require no effort from customers. The only difference for customers would be the change of location i.e. Woolworths might be closer, but there are better savings at Coles. Therefore the customers hold a high amount of power in the choice of store. |
Suppliers | BALANCED | Woolworth’s now offers its own Woolworths brand in most products available in the store, so in that respect they have a high level of control over the supply available in store. However, specialty items that are well known brands forward-sold by Woolworths, the suppliers of such items would hold a high level of control over those products. |
Existing competitors | HIGH | As all businesses, Woolworths also has competitors such as Coles, IGA and Aldi for example. Being that there is no practical way to introduce switching costs to walk-in businesses, Woolworths instead offers a loyalty or rewards program. The “Everyday Rewards” program enables customers to earn points while shopping at Woolworths, complete with its own website where points can be used to purchase rewards. (Woolworths 2010) |
New entrants | LOW | New entrants would pose little threat to a company the size of Woolworths. The expense associated with setting up stores right across Australia in as many locations would be astronomical, and a completely unrealistic target for a new entrant. |
Substitute products | HIGH | Woolworth’s has just entered into a new campaign to keep store ticket prices lower than 1 year ago in a bid to regain customer confidences as well as re-establishing themselves as a market leader. (ACA 2010) In this industry there are many substitute products available, but by having strategies in place to address this situation, Woolworth’s is holding a high amount of power in the current market. |
Woolworth’s has traditionally been in the grocery service industry, but recently has moved further into...