macroeconomics events analysis

Woolworth product and services analysis

Woolworths Ltd is a Public Company that is positioned second out of roughly 2000 organizations in Australia. The organization produces the larger part of its pay from the Supermarkets and Grocery Stores in Australia industry.

In 2015 the organization produced complete income of $61,149,400,000 including deals and other income. In 2015 Woolworths Ltd had 190000 workers in Australia including representatives from all auxiliaries under the organization's control (Jackson, 2003).

The company operates on a given categorizes as follow:

Supermarkets and petrol:

Woolworth operates on supermarkets, Thomas Dux grocery and countdown grocery stores (New Zealand), and petrol station (through its co-marked Caltex Woolworths and Caltex Safeway outlets).

Liquor group

Woolworth’s retails alcohol in-store and online through its alcohol organizations: Dan Murphy's, BWS, Cellar masters and Langton’s, a fine wine closeout organization.

Home improvement

The organization's Masters Home Improvement brand dispatched in 2011, offering more than 35,000 items, for example, apparatuses, paint, kitchens and kitchen machines, lavatory and pipes supplies, deck and tiles, lighting and fans, building supplies and timber, stockpiling and cleaning supplies, adorning materials, electrical and equipment things and cultivating and outside living items(Peter,2011).

Financial Services:

Woolworths offers monetary administrations through its Woolworths Money division, providing credit cards, Visas, reloadable MasterCard and exchanged protection items.

Everyday Rewards:

Woolworths propelled its Everyday Rewards point framework in 2007 far reaching. Ordinary Rewards can be recovered for Frequent Flyer focuses, fuel rebates and other select offers.

Woolworth SWOT analysis

Strength

Woolworths operates various sectors successful, well known brands stores such as Ladybird and chad valley. They also strong persuasive brand name and efficient operations. They are the well- known retailers in the entire UK, pioneers and the oldest organizations to come up with modernist trade mode. They also hold several subsidiaries in UK, i.e entertainment. They are also the leader in the Australian retail industry. With and its leadership position and leverage through its strong resources such as technological, human and good presence, Woolworths further improves the capability of the company in take advantage of the market.

Weaknesses

Their brand never withstands its competitive advantages (Jackson, 2003).The company suffer negligence globally as compared to their competitors. They entered in online transaction late and there they suffer from lack of proper experiences and still also lower prices from their competitors. The other weakness to Woolworths is in its development strategy, mostly impacted by the external environment factors which shakes it capability in leading the Australian retail market. For instance, the Australian government has limited the move of Woolworths in keeping higher prices for its products in collaboration with Coles which shows the major weakness to the company in supporting its greater growth levels (Cole, 2003).

Opportunities

They are able to support their brand through advertisement, sponsorship and promotions, they are also able to seek growth by use of strategic acquisition and charter models. For its weakness mention above will also be the opportunities for Woolworths as there are indication that the retail industry across Australia shows good growth potential such as through computerisation, advances in supply chains. Consumer lifestyle changes have also affected the abilities of retailers and provided good opportunities to grow. Woolworths is now looking towards implementing this option by way of adapting the strategy of multi-option retailing in order to cope up with the changing needs of its customers (Krafft and Mantrala, 2009).

Threats

There is always hike in the cost of raw material for both food and non-food and thus reducing the profit margin. They also face a lot of competition worldwide and those hindering generations of more stores due to economic recession. Other than that threats to the Australian retail are primarily from the higher competition level in the industry with Woolworths first and foremost competing with the Coles Supermarket. Apart from this, the government intervention is another major significant factor affecting the growth of Woolworths in particular within the Australian retail (Samson and Daft, 2012). The rise in diseases related to consuming alcohol caused the pressure from Government to reduce alcohol production, which limit their sales and market share.

Capital structure Analysis

The Group deals with its capital structure and makes acclimations to it in light of changes in monetary conditions and the requirements of the bunch. The Group screens capital utilizing return on value (ROE), which has been founded all things considered value and feature income (Pershing, 2006).

The Group's arrangement is to keep proportions in accordance with yearly targets.

For capital structure analysis these two ratio should be applied, debt to equity and interest coverage.

Debt to equity ratio measures the companies financing leverage. The greater the ratio higher the degree of leverage (Bazley & Hancock, 2013, p. 369).

Debt to equity ratio which is 1.31 in 2015.This indicating the negativity on which the company is operating considering that it is greater that 1:1 ratio.

Interest coverage ratio shows how effortlessly a company can pay the interest on its loans which is the level of protection of lenders from a default on interest payments (Bazley & Hancock, 2013, pg.361). The higher the ratio, the stronger the company’s financial strength is.

References:

· Bazley, M. & Hancock, p. (2009). Contemporary accounting. South Melbourne, Vic.: Cengage Learning Australia.

· Budmar, Peter. ( 2011). Woolworths adopts Visa payWave Technology for Checkouts.

· Foo, F., (2008). Woolies Boost Supply Chain Technology

· Jackson, Joshi, A., & Erhardt, N. L. (2003). Recent research on team and organizational diversity: SWOT analysis and implications. Journal of Management, 29(6), 801-830.

· Leigh, D., & Pershing, A. J. (2006). SWOT analysis. The Handbook of Human Performance Technology, 1089-1108.

· PepsiCo Inc. (2012). woolworth Announces Strategic Investments to Drive Growth.

· Pickton, D. W., & Wright, S. (1998). What’s SWOT in strategic analysis? Strategic Change, 7(2), 101-109.

· Piercy, N., & Giles, W. (1989). Making SWOT analysis work. Marketing Intelligence & Planning, 7(5/6), 5-7.

· Palmer, D.( 2008). Woolworths Trial Self-Check-Out Technology.

· John,Alexandra,B,.(2005).Marketing Teacher, n.d. PEST Analysis

· Valentin, E. K. (2001). SWOT analysis from a resource-based view. Journal of Marketing Theory and Practice, 54-69.

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Interest coverage ratio

Woolsworth 2015 2014 2013 2012 2011 9.8066706021251466 10.725 7.457676348547718 8.2302016724053129 9.2137232845894257 Metcash Limited 2015 2014 2013 2012 2011 6.1688804554079697 7.8373493975903621 6.5829059829059835 2.632843791722296 4.8294993234100128 Wesfarmers Limited 2015 2014 2013 2012 2011 14.131578947368421 9.41077441077441 9.9132791327913274 8.4904306220095691 6.3971631205673756

Debt to equity ratio

Woolsworth 2015 2014 2013 2012 2011 1.3111074190987797 1.3275883930748598 1.4343294492933412 1.6041132361202706 1.744811146815572 Metcash Limited 2015 2014 2013 2012 2011 2.2719993036817798 1.6450453857791223 1.5498795478411265 2.135040837364206 1.7140052356020941 Wesfarmers Limited 2015 2014 2013 2012 2011 0.63036197086477541 0.52872590141224463 0.65840442702328794 0.65107113591134347 0.61135457380867775