This report examine the Australian supermarket industry, highlighting strong performance and developing a business strategy for the future growth of the industry. It identifies Woolworth’s role as an intermediary and retailer for the producers, its strong growth over the past few years, and its position as the market leader in the industry. Significant socio-cultural trends identified by the report were the emerging trends towards time-poor and health conscious consumers. Industry attractiveness was found to have decrease in recent times, due to rise in supplier and buyer bargaining power, greater intensity amongst rivals and higher threats from substitutes. Woolworths three main value-creating functions are:-
a) Inbound logistics, where Woolworths control of the distribution network of its products helps ensure quality and distribution effectively. b) Operations, through which inventory management and strict quality assessment procedures assist in value creation. c) Marketing and sales, in which promotional activities ensure Woolworths remain competitive. Woolworths three main most valuable resources and capabilities were found to be its highly efficient supply chain, its brand reputation and its effective top-level management. To improve their performance in next five years and to hold the competitive edge in the market, it has been advised to the top level management to make actionable recommendations to improve current strategy. Finally it is recommended that in long term Woolworths emphasis its differential factor, for example by improving store atmosphere and customer service, and more importantly diversify into more profitable businesses due to decrease industry profitability.