Woolworths Analysis

[Date of Submission]Introduction

Businesses in the retail industry of Australia are one of the largest businesses in Australia, an idea about this could be taken into consideration from the shedding some light over the fact that almost 10.7 percent of the overall working population in Australia which estimates to somewhere around 1.2 million people, are known to be working in this particular industry. The Australian retail industry is one of the largest contributors towards the economy and also towards the GDP of Australia, through contributing an amount of $53 billion or in other words 4.1 percent of the overall GDP earnings.

In the retail sector of Australia, the businesses which are more profitable are the retail chains which are expected to earn better returns from their sales rather than the small businesses of retailing. It is also expected that these major retailing chains prevalent in Australia earn returns on their investments at a much better rate as compared to the rate of return provided by the similar size retail stores from other regions. The market for the retailing in Australia is now dominated by Woolworths Limited and Cole Groups Limited (Gordon, 2002).

Woolworths Business

Woolworths started as a small outlet of bargain basement in Sydney in the year of 1924. From then onwards Woolworths became a strong competitor in the market and later on became so successful that it started to acquire other competing stores, which in the long run lead to becoming the strongest retail store chain in the entire Australia, with an estimated of 31 percent market share of the entire retail industry of Australia. There are various famous brands that are now operating under the brand name of Woolworths as of the strength of its brand, some of these famous brands include Dan Murphy's, Woolworths/Safe way super markets, Dick Smith Powerhouse, BWS, Tandy and Big W.

Not only is the market presence and overall share of Woolworths is impressive, but the financial standing of the company also shows a high rating, which can be judged from the fact that the EBIT of the company in the year of 2011 was around $3.3 billion in which $3.1 billion came from Woolworths operations in Australia. On ASX as of 14th August, 2011 Woolworths was one of the largest top ten companies, holding a market capitalization of $29.9 billion (Woolworths, 2013; Invest Smart, 2010).

Opportunities & Threats

Woolworths Retailing business section faces a lot of opportunities and threats that we will discuss in the following details:

Opportunities

Opportunities for a business are the ones that are the options available for a business to avail in order to ascertain its future growth, some of these opportunities that are available for Woolworths are:

Its potential of increasing its customer base, this means that Woolworths has the capability of reaching out to a larger audience as of the wide range of the products that are available at its super stores at competitive prices, this gives Woolworths a chance to increase its customer base, i.e. to increase the size of its customers ...