Business Environment

Executive Summary of Internal and External Stakeholder Analysis: Woolworths

Stakeholders play a vital role in the businesses as they participate in the business by taking part in the promotion and decision-making process. The external participate in the business by providing feedback related to product quality. The internal stakeholders are responsible for conducting the major operations of the business. Woolworths is considered for framing the assessment. It is a big chain of Australian supermarkets and grocery stores. The key functional areas where the firm operates are sales, customer service, accounting and finance, research and development and marketing and promotions. The identified stakeholders of the business are employees, government, suppliers and customers. Its other major stakeholders incorporate franchisees, NGOs, community interest groups and unions. The stakeholder matrix brings forward a picture of the stakeholders who have high interest and high power in the firm. Theses stakeholders involve the customers, the Australia government and the corporate social responsibility panel. The customers and union trade also have an interest in the operations of the firm and significantly impact the performance. In contrast with Sonic health care, it is evident that both have a difference in terms of the type of industry, market segmentation and the stakeholders implicated.

Contents

Introduction.

Functional areas.

Internal and external stakeholders.

Degree of interest of main stakeholders.

Level of main stakeholders’ influence.

Stakeholder’s matrix.

Comparison of Woolworths with Amazon.

Conclusion.

Introduction to Stakeholder Analysis

Stakeholder analysis encapsulates the process of analysing the potential changes that can be relevant for the interested parties (Eskerod & Larsen, 2018). It encompasses the key stakeholders that are associated with the firm. It aids in assimilating the relevant data regarding the accountabilities of the stakeholders in a business (Raum, 2018). Both internal, as well as external stakeholders, are crucial for ensuring that the business performs its operation with the maximum optimisation. The business taken into account for outlining the assessment is Woolworths which operates in the retailing chain of Australia. It is a retailing giant in Australia that has captured an appreciable amount of the retailing industry. It is a large chain of Australian supermarkets and grocery stores headquartered in Melbourne (Biddle, 2016).

This assessment is an extensive analysis of the internal as well as external stakeholders of Woolworths. This assessment is segmented into seven key sections. The preliminary section discusses the key functional areas of the chosen business. The following section identifies the stakeholders and their roles. The third section proposes a discussion of the interests of the stakeholders and fuming conflicts. The fourth section lays prominence on the influence of the main stakeholders. The fifth section provides a succinct elaboration of the stakeholder matrix. The sixth section compares Woolworths with another industry. The concluding section highlights the key underpinnings of the assessment.

Functional Areas of Woolworths

Functional areas are key regions wherein the organization displays its expertise and captures the target market (Monden, 2019). The major functional areas of Woolworths encompass production, customer services, research and development, sales, human resources and marketing.

  • Sales

This functional area incorporates selling electronics products, vegetables, grocery and cosmetics. It is the preliminary function of Woolworths. The sales operation is the cardinal functional area that helps Woolworths to capture 37 per cent of the market share.

  • Accounting and finance

This is a vital operation of the organization as it helps in calculating and estimating the average daily and monthly revenue. It inflates the product development strategy in the business and is also a key factor that is accountable for resolving any sort of issues in calculating the revenue.

  • Customer service

The business provides the required and relevant information to the customers regarding efficient grocery, liquor products and the cosmetics store. It provides support to the customers after the sales. The firm has a contact enquiry system available for the customers so that they can get their queries resolved.

  • Marketing and promotions

This is a key step as it facilitates the marketing of the products to the Australian market. Woolworths markets its products via both online and offline medium. The online marketing channels involve its online website through which the customers can buy products. It communicates to the customers about the freshness and quality of the products to ensure that a loyal and robust customer base is maintained.

  • Research and development

By employing its research and development, the business was able to introduce Australia's lowest priced capsule-based coffee machine. In the year 2012, it invested $1 million for funding research at the Queensland branch. The research and development team of the firm continually indulges in the process to come up with the latest advancements.

Internal and External Stakeholders

Woolworths believes that for building a sustainable business, it is crucial that effective relationships are built with the stakeholders. This is the key reason that it has to build a strong partnership with its shareholders. The key stakeholders of the business involve employees, government, suppliers and customers. Its other major stakeholders incorporate franchisees, NGOs, community interest groups and unions. The company trail an active engagement process to engage with its stakeholders (Grimmer, 2018). The internal stakeholders of the business are its employees and the managing authorities. The external stakeholders of the business are logistics supplier, local people, authoritative bodies of Australia, celebrity endorsements, rainforest alliance, media groups and wholesalers and third-party intermediaries. Customers are their key external stakeholders. Woolworths has 576 store locations and it intends to satisfy its customers via delivering them high-quality products and services. Employees form the backbone of a firm, Woolworths employs around 46 000 employees from across the globe and intends to keep them embedded in the culture (Woolworths Group, 2018).

The internal stakeholders are responsible for driving the business of the firm. The board of directors of Woolworths devise new stratagems to attain competitive advantage. It ensured that the financial investment is done at the right place. Employees in Woolworths make sure that the functional activities are conducted in an optimum manner. In its supermarkets, it employs around 100000 employees who put their efforts into planning, organizing the key activities of the workplace. The external stakeholders of Woolworths make sure that the service is regulated and the quality of the products is assessed (Hepworth & Newman, 2019). The government ensures that the business complies with the ethical considerations and with the corporate social responsibility. They ensure that compliance with the environmental-friendly processes is depicted. Other stakeholders of the business involve its suppliers. They play a key role in ensuring that high-quality products are supplied at regular intervals. It obtains 100 per cent fresh meat and 96 per cent fresh vegetables and fruits from farmers and growers. It has strong ties with the farmers who provide them with the unsullied supplies. Homebrand is a Woolworths Private Label brand and is a key partner of Woolworths responsible for offering more than 950 product lines of the business.

Degree of Interest of Main Stakeholders

Woolworths proudly states that it has around 445000 shareholders. Most of the shareholders of the firm are the Australian people having superannuation funds in the business. It has maintained the share price at around 36.68 AUD (Teicher, 2020). Employees are the major stakeholders of the firm. Their interest lies in fair working wages and enhanced working conditions. Woolworths came into limelight when it was identified that it underpaid its workers in the year 2019. The underpayment was done by a high figure of around $300m. The business was; as a result; investigated by the Fair Work Ombudsman (Teicher, 2020). The business also accepted and identified that it underpaid around 5700 of its staff members. On investigation, it was also revealed that the issue of underpayment dated back to the year 2010. This issue of underpayment resulted as a consequence of the conflicts about the monetary dissemination between the board of directors and the employees. Since both are cardinal stakeholders of the business, the conflict caused an ethical issue to propagate. In the business, issues in the agreement also aroused between the organization and its National Union of Workers (NUV) (Teicher, 2020). This occurred due to the conflicts between NUV and another stakeholder, and the organization’s board. This resulted in Woolworths incorporating a pre-qualification programme for hiring the labours so that the labour and human rights standards are sustained.

Level of Main Stakeholders’ Influence

The trade union is an active participant among all the other stakeholders of Woolworths. Woolworths had to recently face shareholder resolution which was co-sponsored by industry superannuation fund LUCRF. This occurred as a result of the interest of union in the working conditions of the farmworkers. The union required the organization to laid prominence on the grievance resolution and education of the workers. It was done in response to the alleged abuses by the labours in the vegetable and fruit supply chain. The IFM executive director also stated that the working condition of the Australians is integral for any organization to sustain (Nyagadza, Kadembo & Makasi, 2019). The organization has displayed commitment towards its tier one and tier two suppliers so that the productivity is inflated. The suppliers of Woolworths are interested in gaining an optimal scale of profit and at the same time contrast the performance of the firm against the metrics. Their interest is to be informed about the latest schemes incorporated by the firm.

Woolworths then introduced the pilot scheme, it ensured that the suppliers were introduced about the same and were also provided with the scorecards and the commercial reports for analysing the performance of the brand against the rival brands. The suppliers of the retailing giant have an interest in knowing the performance of the firm in the market. They are also interested in comprehending how the organization is performing in all the key functional areas that incorporate sales, marketing, market, service, returns and in terms of customer loyalty. Employees of the firm are invested in the decisions that the firm makes (Grimmer, 2017). They represent the organization and hence are involved in the key decisions made by the firm also they are communicated about the latest advancements that the firm is going through or is going to adopt.

Stakeholder’s Matrix

Stakeholder matrix

Figure 1: Stakeholder matrix

Source: Self-made, information adapted from Woolworths’ sustainability report (2018)

The Australian government is a stakeholder of Woolworths with high power and high interest. Being the leading retailing brand of the country, Woolworths has to make sure that the equal Federal Government Employment Parity contract is adhered to and the required numbers of Aboriginal people are employed in the organization. Hence, Woolworths ensures that around 2 per cent of the people serving in the stores are from Aboriginal descent (Woolworths Group, 2018). It has laid emphasis on building a prosperous relationship with the third parties and making sure that sustainable deliverables outcomes are produced. The federal government has high power in the organization as a stakeholder as it regulates many of its operations which include the diversity dimension of the firm. The inter-governmental panel on climate change further discusses the factor and hence, also takes the required actions. Customers are integral stakeholders as their opinions and viewpoints influence the operations of Woolworths (Woolworths Group, 2018).

Employees in the firm have high interest but low power. Similarly, the vendors also have an elevated interest in the operations of the firm. Supply chain partners of the firm are accountable for ensuring that all the operations of procurement are done in an effectual custom. The sponsors, regulators and the trade union have low interest in the firm but have high power. The Victorian liquor regulatory body VCGLR is one of the regulatory bodies of Woolworths who makes sure that the best practices are adopted for the delivery of the drinks and juices via online channel. The “Our Community our Commitment” framework is another regulatory framework that is incorporated by the firm to ensure that the legal obligations are trailed by the firm in an effectual custom. State regulators also display interest in the operations of Woolworths (Woolworths Group, 2018). It is evident from the supply chain matrix that the wholesale retailers have less interest and less power in the firm among all the other stakeholders.

Comparison of Woolworths with Amazon

 Woolworths is an Australian retailing giant and is known for its robust integration of its offline stores. The services are majorly provided via the offline medium. It operates in the retailing industry of the country. Another peer company that is chosen for contrasting the two industries is Sonic health care. It is an Australian service that specializes in the provision of the radiology services, laboratory services and pathology services. It is referred to as Australia’s largest diagnostic companies (Depuydt et al., 2016). It is the largest medical laboratory provider in the country. It has a diverse workforce and employs around 37000 people (Depuydt et al., 2016). The industry Sonic health care operates in is quite different than that of Woolworths. Sonic health care operates in the healthcare industry whereas Woolworths operates in the retailing industry. Both industries are at different edges. Sonic health care is known to provide the medical leadership to the doctors as well as patients. Unlike Woolworths, Sonic health care's target market is specifically defined; which are the medical centres, healthcare settings and the patients seeking medical aid.

Both the industries differ in terms of the stakeholders they engage with. Woolworths' key stakeholders are its customers, employees, the Australian government, union, suppliers and wholesalers. The stakeholders of Sonic health care are its board of committee, healthcare centres, investors, patients, public laboratories and medical schools (Chew & Vohra, 2018). In Woolworths, as identified; the stakeholders with high interest are Australian government, employees, suppliers and trade union. In Sonic, the stakeholders of high interest are Australian government, medical pathologies, diagnostic centres and healthcare settings. This clearly brings out the difference in the stakeholders having a high degree of power. The similarity is the fact that in both the industries, the Australian government intervenes with high interest. In Sonic health care, The Department of Health regulates the operations.

Conclusion on Internal and External Stakeholder Analysis: Woolworths

Stakeholder analysis assists in acknowledging the most powerful stakeholder and their level of interest. This assessment has brought forward a clearer picture of the stakeholder analysis of Woolworths. It has laid prominence of the key stakeholder of the firm. This assessment is a comprehensive investigation of the internal and external stakeholders of Woolworths. It is contingent from the assessment that the key stakeholders of the retailing giant are franchisees, NGOs, community interest groups, customers, employees, customers, Australian government and unions. The external stakeholders of the firm are authoritative bodies, customers and suppliers. The internal stakeholders of the firm are its employees and the board of directors. The external stakeholders of the firm are customers, vendors, wholesale retailers and the Australian government. The company considered for contrasting Woolworths is Sonic health care. Both the industries differ with each other in terms of the type of industry, market segmentation and the stakeholders involved.

References for Internal and External Stakeholder Analysis: Woolworths

Biddle, I. (2016). The Wesfarmers/Woolworths duopoly war: The Bunnings vs. Masters battle. Busidate24(3), 3.

Chew, E., & Vohra, A. (2018). Wellnet Integrated Care Program-supporting chronic disease management through private public partnerships. International Journal of Integrated Care (IJIC)18.

Depuydt, C. E., Thys, S., Beert, J., Jonckheere, J., Salembier, G., & Bogers, J. J. (2016). Linear viral load increase of a single HPV‐type in women with multiple HPV infections predicts progression to cervical cancer. International journal of cancer139(9), 2021-2032.

Eskerod, P., & Larsen, T. (2018). Advancing project stakeholder analysis by the concept ‘shadows of the context’. International Journal of Project Management36(1), 161-169.

Grimmer, L. (2017). Is it so hard to say sorry? Revisiting image restoration theory in the context of Australian supermarkets. Asia Pacific Public Relations Journal18, 17-32.

Grimmer, L. (2018). The diminished stakeholder: Examining the relationship between suppliers and supermarkets in the Australian grocery industry. Journal of Consumer Behaviour17(1), e13-e20.

Hepworth, K., & Newman, F. (2019). Trade Unions v. Social Audits: Addressing Labour Exploitation in Woolworths Domestic Food Supply Chain. Hum. Rts. Defender28, 14.

Monden, Y. (2019). Toyota management system: Linking the seven key functional areas. London: Routledge.

Nyagadza, B., Kadembo, E. M., & Makasi, A. (2019). An application of impression management theory on corporate storytelling for branding in examining internal stakeholders’ corporate brand perceptions. The Retail and Marketing Review15(2), 39-50.

Raum, S. (2018). A framework for integrating systematic stakeholder analysis in ecosystem services research: Stakeholder mapping for forest ecosystem services in the UK. Ecosystem services29, 170-184.

Teicher, J. (2020). 4 Wage Theft and the Challenges of Regulation. Contemporary Work and the Future of Employment in Developed Countries, 12.

Woolworths Group. (2018). Tomorrow together. Sustainability report. Retrieved from: https://www.woolworthsgroup.com.au/icms_docs/195398_2018-sustainability-report.pdf

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