A Group Case Study

On

“BIG W”

Submitted To:
Dr Tariq Maqableh

MGMT402 Strategic Management

Submitted By:
Md. Morshed Uddin (CIM10290)

Faisal Ahmad Mridha (CIM10293)

Md Nobirul Peal (CIM10289)

Abu Sattar (CIM10438)

Date Of Submission: 31/03/2024

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Executive Summary:
Big W, a subsidiary of Woolworths Group, is a leading Australian retail company offering a

diverse range of products at competitive prices. Subsidiary of Woolworths Group, is a leading

discount department store chain in Australia, offering a diverse range of products including

apparel, electronics, homeware, and groceries. The company's focus on affordability and

accessibility has made it a preferred destination for cost-conscious shoppers. Big W's strengths

include a diverse product range, competitive pricing, and strong brand recognition. However,

it faces stiff competition from traditional retailers and online e-commerce platforms,

necessitating continuous innovation to maintain market relevance. Margin pressure and price

competition also pose challenges to profitability, necessitating effective cost management

strategies. Changing consumer behaviour, including the shift towards online shopping, demand

adaptation, and agility from Big W are also challenges. Big W is prioritizing digital

transformation to enhance its online presence and omnichannel capabilities, product innovation

to meet changing consumer needs, and operational efficiency measures to ensure sustainable

growth and profitability amidst competitive pressures. Big W continues to thrive as a key player

in the Australian retail sector, capitalizing on its diverse product range, competitive pricing,

and strategic initiatives to navigate challenges and drive continued success within the

Woolworths Group portfolio.

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Table of Contents
MGMT402 Strategic Management ...................................................................................... 1
Executive Summary:............................................................................................................... 2
Introduction: .......................................................................................................................... 4
Background of the study: ........................................................................................................ 4
Methodology of the Report: .................................................................................................... 4
Critical analysis of BIG W ....................................................................................................... 5
External Analysis:................................................................................................................... 5
InternalAnalysis: .................................................................................................................... 6
SWOT Analysis: ...................................................................................................................... 8
Porter's Five Forces analysis: ................................................................................................ 10
Channels and Integration: .................................................................................................... 12
Product Assortment and Merchandising Strategy: ................................................................. 12
Big W's Pricing Strategy: ....................................................................................................... 12
Areas for Improvement: ........................................................................................................ 14
Strategic formulation of BIG W: ............................................................................................. 14
Recommendations: ............................................................................................................. 16
Conclusion: ......................................................................................................................... 17
References: ......................................................................................................................... 18

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Introduction:
Few brands ring as true in the ever-changing Australian retail scene as Big W. Big W, a division

of the Woolworths Group, is a shining example of price, variety, and accessibility among cheap

department shops. Since its beginning, Big W has developed to satisfy the different

requirements and interests of Australian consumers, carving itself a unique market niche. This

paper seeks to give a complete overview of Big W, delving into its market position, main

strengths, difficulties, and strategic plans. By looking into the company's operational dynamics

and strategic initiatives, we want to provide useful insights into Big W's current position and

future possibilities in the retail industry. This report explores Big W's success, challenges, and

strategies in the ever-changing retail landscape. It uses market research, financial analysis, and

industry insights to provide a detailed portrait of the company's journey, highlighting its

resilience, innovation, and adaptability. The report aims to provide stakeholders with a nuanced

understanding of Big W's role in shaping the Australian retail landscape and its prospects for

sustained growth and success. The journey will help stakeholders understand the threads that

weave together Big W's past, present, and future in the vibrant Australian retail landscape.

Background of the study:

The group is enrolled in a master’s program at CIM, where they plan to gain practical

experience and refine their skills through the report at BIG W, aiming to enhance their skills

and advance their career.

Methodology of the Report:

The report employs both quantitative and descriptive research methods, utilizing two distinct

data sources.

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Primary Sources:
Primary data sources include face-to-face communication with officials.

• Communicating with seniors and juniors.

• Working with reputable clientele.

• Various field practices.

Secondary Sources:
Secondary Data Sources:

• Website

• Annual reports

• Internet

Critical analysis of BIG W

Strategic Environment Analysis:

The analysis of Big W involves examining both external and internal factors that influence its

performance and strategic decisions.

External Analysis:
Industry Analysis: Analyse the retail market in Australia, taking into account its size,

development trajectory, and competitive environment. Think about the degree of competition

among rivals, the prospect of new entrants, and the negotiating power of suppliers and buyers.

Market Trends: Recognize the major developments influencing the retail industry, such as

the emergence of e-commerce, evolving customer tastes, and modifications in consumer

purchasing habits. Examine the effects these changes have on Big W's strategies and business

model.

Competitive Analysis: Evaluate all of Big W's rivals, including well-known companies like

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Kmart and Target as well as internet merchants. Evaluate their advantages against Big W in

terms of market positioning, strengths, and shortcomings. Determine the ways in which Big W

may set itself apart or obtain an edge over competitors.

Market Competition: Big W competes with other big stores in Australia, including Kmart,

Target, and online giants like Amazon. Competing successfully in pricing, product selection,

and customer experience is critical to its success.

Consumer Trends: It's critical to comprehend and adjust to changing customer preferences

and purchasing habits. This might entail giving customers easy delivery choices, expanding

online buying alternatives, and offering a variety of product lines.

Economic Conditions: Big W's success is impacted by several economic factors, including

consumer spending trends, unemployment rates, and rates of inflation. It's crucial to develop

strategies for navigating through economic uncertainty while upholding value and affordability

for clients.

Technological Advancements: Big W may gain a competitive edge by embracing technology

for data analytics, customer interaction, and operational efficiency. This might entail making

investments in supply chain optimization, e-commerce platforms, and targeted marketing.

Legal and Regulatory Environment: Review pertinent laws and rules, such as tax laws,

Labor laws, and consumer protection statutes, that have an impact on the retail sector. Examine

how any regulatory changes would affect Big W's operations and compliance needs.

InternalAnalysis:

Financial Performance: Examine Big W's revenue, profitability, and liquidity by examining

its financial statements. Examine any patterns or variations in financial performance over time.

Operational Efficiency: Assess Big W's supply chain management, inventory control, and

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retail productivity in terms of their operational efficiency. Determine where resource usage,

process optimization, and cost reduction may be improved.

Evaluate the placement: Big W's brand and its marketing tactics. Examine its marketing

initiatives, price plans, and brand message to determine how well they are working to draw in

and keep consumers.

Product Portfolio: Assess the range and applicability of Big W's available products. Evaluate

its capacity to satisfy consumer preferences and demands in a variety of categories, and

pinpoint areas that might use product growth or innovation.

Human Resources: Examine Big W's approaches to hiring, onboarding, and employee

engagement in terms of workforce management. Evaluate how HR policies affect performance,

productivity.

Technology and Innovation: Assess how Big W uses technology to improve customer service

and operations. Examine the investments it has made in digital marketing and e-commerce

platforms.

Sustainability and Social Responsibility: Analyse Big W's efforts in ethical sourcing,

community involvement, and environmental sustainability. Analyse the company's CSR

initiatives to make sure they meet stakeholder expectations and organizational values.

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SWOT Analysis:
Big W is a well-known and established brand in the Australian retail market, known for its

wide product range, extensive store network, competitive pricing, and integration with

Woolworths Group. However, it faces several weaknesses, including margin pressures due to

thin profit margins, limited online presence, reliance on discounting, and store format

challenges.

Opportunities for Big W include e-commerce expansion, product diversification, sustainability

initiatives, and digital innovation. Expanding its e-commerce capabilities can reach a broader

customer base, enhance convenience, and drive sales growth. Diversifying its product offerings

through new categories or partnerships with third-party sellers can expand market reach and

relevance. Investing in sustainability initiatives can enhance Big W's brand reputation.

Threats to Big W include intense competition from traditional brick-and-mortar retailers and

online giants, economic uncertainty due to downturns, fluctuations in consumer spending, and

changes in consumer confidence levels, regulatory risks related to Labor laws, product safety

standards, and data privacy, and shifting consumer preferences.

To overcome these challenges, Big W should focus on enhancing its e-commerce capabilities,

diversifying its product offerings, investing in sustainability initiatives, and leveraging digital

innovation to streamline operations and gain insights into consumer behaviour and preferences.

In conclusion, Big W's strengths, weaknesses, opportunities, and threats are crucial for

understanding its competitive position and strategic outlook in the retail industry. By

identifying its internal strengths, weaknesses, and external opportunities, stakeholders can

better navigate the competitive landscape and adapt to evolving market demands.

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Porter's Five Forces analysis:
Porter's Five Forces framework offers a means of evaluating an industry's level of competition

and appeal. This is how Big W is affected by it:

1. Threat of New Entrants:

Low to Moderate: In terms of capital needs and distribution channel accessibility, the retail

sector has comparatively low entry barriers. New entrants are hindered by the economies of

scale, high brand awareness, and consumer loyalty enjoyed by well-established firms like Big

W. Furthermore, it is difficult for new businesses to establish a presence in the retail industry

due to the fierce rivalry and market saturation.

2. Bargaining Power of Suppliers:

Moderate: Big W purchases goods from a range of vendors, such as producers, distributors,

and wholesalers. Big W can negotiate advantageous terms and pricing because of its huge scale

and purchasing power, even if some suppliers may have great negotiating leverage because of

exclusive agreements or unique items. However, Big W's supply chain and profitability could

be impacted by changes in commodity prices or interruptions to its suppliers.

3. Bargaining Power of Buyers:

High: Because there are so many options available to them and information is readily

accessible, consumers in the retail sector have strong bargaining power. Big W competes in a

highly competitive market where customers may quickly compare costs and choose between

rival businesses. To keep clients and hold onto market share, Big W must continuously work

to provide competitive rates, promotions, and value-added services.

4. Threat of Substitute Products:

High: With the rise in e-commerce and online shopping platforms, the retail business is very

vulnerable to replacement items. Customers can choose to buy comparable goods from

different offline and online merchants. To counteract the danger of replacements and maintain

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consumer loyalty, Big W needs to set itself apart through its product range, price policies, and

customer experience.

5. Rivalry Among Existing Competitors:

High: There is fierce competition among Big W's current rivals in the retail sector. Amazon

and other online retailers, as well as Kmart and Target, are fierce rivals in terms of pricing,

product selection, and customer service. Market share and profit margins are thus under

continual pressure. Big W must use differentiation tactics, innovation, and operational

efficiency to stay competitive in the face of intense competition.

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Channels and Integration:
• Online Store (bigw.com.au): This is the centre of their computerized presence, offering

many items, advancements, and faithfulness program incorporation.

• Actual Stores (176 areas): Stores offer an organized item determination, snap and-

gather choices, and progressively, in-store computerized encounters like computerized

booths for item data or self-checkout.

• Versatile Application: Big W's app considers perusing, making shopping records,

following requests, and using snap and-gather administrations.

• Commercial centres: Organizations with My Deal grow their web-based reach and item

assortment.

Product Assortment and Merchandising Strategy:

Break down Big W's item grouping procedure, including its item blend, arrangement

profundity, and marketing strategies. Evaluate how well the organization adjusts its item

contributions to shopper inclinations, market patterns, and occasional requests.

Big W's Pricing Strategy:

Big W's pricing strategy revolves around a core principle: "Everyday Low Prices" (EDLP).

Let's delve into the specifics and evaluate its effectiveness:

Pricing Structure:

• EDLP: This approach intends to offer reliably low costs on many items, killing the

requirement for incessant deals and limits.

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 • Value Private Brands: Big W offers a restricted choice of private-mark brands situated

for reasonableness contrasted with public brands.

Promotional Pricing Tactics:

• Restricted Time Offers: Big W sometimes utilizes designated advancements on

unambiguous things or classifications to make fervour and drive deals for occasional

items or abundance stock.

• Ordinary Prizes Program: This faithfulness program offers different advantages,

including part just limits and focuses redeemable for future buys. Big W as of late

coordinated part valuing, offering select limits to dependability program individuals on

unambiguous classifications.

Price Competitiveness:

• Principal Contenders: Kmart and Target are Big W's essential rivals, and every one of

the three participate in a serious estimating climate.

• Price Matching: Big W has a cost matching strategy to guarantee seriousness in

unambiguous circumstances.

Effectiveness:

• Sales: EDLP can guarantee reliable client traffic, however it probably won't produce

similar degree of direness as continuous deals.

• Profitability: Keeping up with EDLP requires haggling low costs with providers and

overseeing edges.

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Areas for Improvement:
• Strategic Promotions: While EDLP is the centre procedure, Huge W could investigate

key utilization of advancements to make energy for new items or clear abundance

stock.

• Data-Driven Personalization: Utilizing client information to offer designated

advancements and devotion program advantages can upgrade client experience and

faithfulness.

• Value Perception: Huge W can fortify the incentive of their private-mark brands by

stressing quality and cost reserve funds contrasted with public brands.

Strategic formulation of BIG W:

Big W's strategic formulation involves defining long-term objectives and action plans to

achieve sustainable competitive advantage and meet stakeholder expectations, with key

components including strategic planning.

Mission and Vision: Big W formulates a mission statement that outlines both its future goals

and basic values. This offers a framework that directs strategic direction and decision-making.

Environmental Analysis: Big W thoroughly examines the external environment it operates

in, considering competitive activity, market trends, industry dynamics, and regulatory

considerations. This aids in locating opportunities and potential dangers to the company's

operations.

Internal Assessment: Big W assesses its financial performance, operational capabilities,

people resources, and technology infrastructure, among other internal strengths and

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shortcomings. Gaining insight into internal capabilities is essential to maximizing strengths

and mitigating deficiencies.

Establishing Objectives: Big W establishes specified, measurable, attainable, relevant, and

time-bound (SMART) objectives based on the results of the environmental and internal studies.

These goals serve as standards for evaluating performance and are consistent with the purpose.

Formulation of Strategy: To accomplish its goals, Big W formulates strategic initiatives that

consider several aspects including product development, market expansion, pricing strategies,

improving customer experience, and operational improvements. These tactics might include

cost leadership, differentiation, market segmentation, or focus strategies made specifically for

Big W's target market and competitive environment.

Resource Allocation: To assist in executing its strategic goals, Big W allots resources,

including monetary, human, and technological resources. This entails setting investment

objectives and making sure that they are in line with both financial and strategic priorities.

Risk management: It is the process by which Big W assesses any risks and uncertainties

related to its strategic ambitions and creates plans to reduce any unfavourable effects. This

includes backup plans, scenario planning, and continuous strategy monitoring and

modification.

Communication and Implementation: Big W makes sure that all stakeholders agree and

commit by successfully communicating its strategic goals and objectives throughout the

organization. The establishment of well-defined roles, duties, and accountability systems

enables the effective execution of strategic projects.

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Monitoring and Evaluating Performance: Big W sets up key performance indicators (KPIs)

to track advancement toward strategic goals and conducts routine performance reviews. This

entails monitoring financial indicators, operational performance, market share, and customer

happiness to evaluate the success of strategic efforts and make necessary modifications.

Recommendations:
Big W, an Australian discount department store chain, offers a diverse range of products

including clothing, homeware, electronics, toys, and groceries. To evaluate and provide

recommendations for Big W, it is essential to consider various aspects of its operations.

Product Range and Quality regular quality checks and customer surveys can help ensure that

the products meet desired standards. Regular price comparisons with competitors can help

maintain competitiveness and profitability. Customer Experience: A seamless shopping

experience is essential for customer retention, and regular staff training can help identify areas.

Online Presence With the growing trend of online shopping, Big W's website and mobile app

need to be evaluated for functionality and user-friendliness. Investments in website

improvements, faster loading times, enhanced search functionality, and smoother checkout

processes. Marketing and Promotions Effective marketing strategies can attract customers and

drive sales. Recommendations may include leveraging social media platforms, implementing

targeted advertising campaigns, and offering exclusive promotions to loyalty program

members. Supply Chain Management Efficient supply chain management is crucial for

maintaining inventory levels and timely delivery of products. Recommendations may include

optimizing inventory levels, streamlining distribution processes, and improving supplier

relationships. Sustainability Initiatives Implementing sustainability initiatives can enhance the

brand image and attract environmentally conscious customers. Recommendations may include

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reducing plastic usage, sourcing eco-friendly products, and implementing recycling programs.

Community Engagement building a strong connection with the local community can foster

customer loyalty. Recommendations may include expanding community outreach programs

and partnering with local organizations to support community initiatives.

Conclusion:
In conclusion, Big W, a well-known chain of inexpensive department stores in Australia, deals

with a variety of chances and difficulties in the retail industry. Several recommendations may

be made to improve its performance and keep its competitive edge based on a thorough

assessment of its operations and consumer feedback.

To attract and keep customers, Big W should prioritize maintaining competitive prices and

assuring the quality of its product variety. Long-term success depends on enhancing the general

client experience through web presence, personnel training, shop layout, and cleanliness. It

may appeal to a larger client base and enhance its brand image by investing in sustainability

projects, targeted marketing efforts, and website upgrades. Fostering customer loyalty and

promoting operational excellence also need effective supply chain management and

community involvement. Big W can maintain growth in the retail sector and maintain its

position as Australia's top discount retailer by putting these suggestions into practice and

keeping up with market developments.

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References:
Academic References:

1. Retail Management: A Strategic Approach by Barry Berman and Joel R. Evans.

2. Retailing Management by Michael Levy and Barton A. Weitz.

3. Strategic Management in the Retailing Industry: Towards Sustainable Competitive

Advantage by Tim Mazzarol and Sophie Reboud.

4. "The Role of Pricing in the Marketing Mix: Pricing Strategies and Tactics" by O.C.

Ferrell and Michael Hartline.

5. "Customer Satisfaction, Loyalty, and Repurchase: Some Evidence from Apparel

Consumers" by Güliz Ger and Özlem Hesapçioğlu.

6. "Supply Chain Management in the Retail Industry: A Review" by Akhil Gupta and Anuj

Kathuria.

7. "Understanding the Influence of Store Layout on Consumer Buying Behaviour" by

Kusum L. Ailawadi, Kevin L. Keller, and Sanjay K. Dhar.

8. "E-commerce and its Impact on Operations Management" by Yi Mei, Wai Kin Eddie

Ng, and Min Xie.

9. "The Impact of Marketing Promotions on Brand Equity: A Conceptual Framework and

Propositions" by Kevin Lane Keller.

10. "Corporate Social Responsibility and Sustainability in Retailing: An Agenda for

Researchers and Practitioners" by Michaela Baur and Kai Foerstl.

Industry-Based References:

1. Reports and publications from the Australian Retailers Association (ARA).

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 2. Insights and analysis from market research firms such as IBISWorld or Euromonitor

International.

3. Financial reports and investor presentations from Woolworths Group, the parent

company of Big W.

4. Articles and analysis from industry publications such as Inside Retail or Retail World.

5. Interviews or statements from industry experts, retail consultants, or executives within

the retail sector.

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