Cc 303 Corporate Level Strategies Assessment Answers

Introduction

There are key managerial person who are indulged in formulating the corporate strategies such as directors, managers, management department. All the employees are accustomed to act on undertaken decisions of these key managerial persons. Corporate strategy involves the careful analysis of business functioning to compete in market. These strategies assist organization to develop core competency in market to win over the rivals. These strategies are mapped out around the goal and objectives of an organization. In this repro, corporate level strategies of the Woolworths Company and how it has been competing with the rivals in market have been analyzed in effective manner.

Woolworths Company is Australian Retail Company which has been offering its retail services to clients around the globe. This company has its headquartered situated in Bella, Vista, Australia and currently in last year, it had overall revenue of AUD $ 3.65 Billion which is 20% higher as compared to last five year data. The selection of the proper corporate level strategy in market depends upon nature of the business, existing competition and opportunity available in industry (Alamdari, & Fagan, (2017). These corporate level strategies are used by company to strengthen its overall outcomes and efficient business functioning. Nonetheless, these strategies align the interest of the Organizaiton with the stakeholders development.

Corporate level strategies implemented by Woolworth

This company has adopted the cost leadership strategy to create core competency in cost leading business functioning. In this strategy, company re-engineered its business process system to make it more customized and lower down the cost of the production of the process system of organization. Woolworths Company adopted the cyber computing enterprises resources planning system in its business process which have resulted to setting up the automation in business process system and develop online payment gateway for clients. It has not only increased the overall outcomes but also strengthen the satisfaction level of clients in long run (AO Dos Santos, Svensson, & Padin, 2014).

There is another corporate level strategy i.e. product differentiation strategy which helps organization to keep its offered retail service distinguish as compared to other rivals in market. It has allowed company to advance its retail services to attract more clients and increase the client satisfaction at large. This product differentiation strategy allowed company to create value on its investment and develop core competency in product differentiation strategy (Dos Santos, Svensson, & Padin, (2013). Woolworths has implemented product differentiation and cost leadership corporate level strategy which is used to attract clients in market and increasing the overall clients’ needs in determined approach. These both corporate level strategies have assisted organization to win over the market and strengthen brand image of company.

Capital structure of Company

Woolworths Company has been maintaining strong financial performance throughout the time. However, with the downfall in its profitability since last three years, Company has faced high financial leverage in its business. This risk resulted to high sustainability loss if company fails to cover its interest payment (Alamdari, & Fagan, (2017). The major steps which could be taken by company are related to lower down the deb portion in its capital structure and increase in its profitability. Woolworths Company needs to issue more equity capital so that it could lower down the debt portion from its capital structure. It will allow company to lower down the financial leverage. However, company should find equilibrium between the financial leverage and cost of capital if it wants to win over the market in sluggish market condition (Flax, Bick, & Abratt, 2016). Company needs to lower down its busienss costing by increasing the debt funding or focusing on the cost reduction process if it wants to keep the busienss more sustainable in long run.

Evaluate the suitability of the organisation’s current strategies. 

It is analyzed that Woolworths has international brand image on international level and adopted three broad corporate level strategies. However, with the changes in time and positive business outflow, company could keep high financial leverage in its business. It will not only allow company to lower down the cost of capital but also increase the sustainability in long run. Another strategy of Woolworths is related to product differentiation strategy which is quite acceptable for the long term growth. It has allowed company to strengthen the overall brand image on international level. In addition to this, cost leadership strategy developed by Woolworths company has allowed it to grasp those potential clients in market which could assist it increase the overall turnover and profitability in long run (Klettner, Clarke, & Boersma, 2014). The current busienss strategies of company focus on the increased business outcomes and satisfying the clients.

After evaluating the sustainability of these strategies, it could be inferred that company have implemented effective corporate level strategies to win over the rivals in market. however, there are other two supporting alternatives which could be undertaken by Woolworths in place of these above given strategies (Laszlo, & Zhexembayeva, 2017). In addition to this, sustainability of the busienss also depends upon the strategic business outcomes of company.

Woolworths has been facing issues in its offered retail services to clients in relation to their satisfaction and quality of the offered retail services. Woolworths should go for customization in its offered retail services to clients as per the needs and demand in market. It will not only strengthen the overall client’s satisfaction but also increase the overall output in effective manner. This strategy will undertake values, belief, and culture and perceptive of the clients This strategy will strengthen overall value process system of company and also assists company to continue with its existing clients in long run (Mortimer, (2011).

There is another strategy which could be adopted by Woolworths to tap the new market and increasing the overall turnover i.e. diversification strategy. This strategy will allow company to tap the new market with its existing products or expanding the business on international level. This strategy is designed to increase the overall market share and strengthen the turnover and profitability of company in long run. This strategy will not mitigate the financial leverage issue of company but also make easy for company to give the tough competition to rivals on international level (Alamdari, & Fagan, (2017). There are several other corporate level strategies which could also be undertaken by Woolworths to pave up with the changing business economic condition. If company could use these strategies as per the required needs and demand of market then it would increase the overall return on capital employed of company in effective manner (Roper, & Fill, 2012).

Conclusion

After evaluating all the details and annual report of Woolworths, it could be inferred that Woolworths Company has kept strong business on domestic and international level. Corporate level strategy has been formulated by Woolworths consistently to gain competitive advantage of mix business structure in the industry to give tough competition to rivals. However, there are several rivals such as Tesco, Wesfarmers and Morrison who are giving tough competition to Woolworth. If company could keep its business distinguish those of others in market then it will not only strengthen the financial performance of company in long run but also increase the sustainability of organization.

References

Alamdari, F., & Fagan, S. (2017). Impact of the adherence to the original low-cost model on the profitability of low-cost airlines. In Low Cost Carriers (pp. 73-88). Routledge.

AO Dos Santos, M., Svensson, G., & Padin, C. (2014). Implementation, monitoring and evaluation of sustainable business practices: framework and empirical illustration. Corporate Governance, 14(4), 515-530.

Dos Santos, M. A., Svensson, G., & Padin, C. (2013). Indicators of sustainable business practices: Woolworths in South Africa. Supply Chain Management: An International Journal, 18(1), 104-108.

Flax, J., Bick, G., & Abratt, R. (2016). The perceptions of supplier-buyer relations and its affect on the corporate brand. Journal of Brand Management, 23(1), 22-37.

Klettner, A., Clarke, T., & Boersma, M. (2014). The governance of corporate sustainability: Empirical insights into the development, leadership and implementation of responsible business strategy. Journal of Business Ethics, 122(1), 145-165.

Laszlo, C., & Zhexembayeva, N. (2017). Embedded sustainability. In Embedded Sustainability (pp. 116-140). Routledge.

Mortimer, D. (2011). Management employment relations strategy: the case of retailing. International employment relations review, 7(1), 81.

Roper, S., & Fill, C. (2012). Corporate reputation: brand and communication. Harlow: Pearson.