Strategic Plan for Woolworths/Macro Wholefoods
Figure 4: Proposed Organisation Structure for Woolworth’s Macro division
Each department head will directly report to Chief Operating Officer (COO) / Director of Macro. The Director of Macro which have a position in steering committee of board of director to uplift any issues faced by Macro. This will ease up the process of changing any strategic decisions for Macro Brand. Each department heads will be responsible for the functions assigned to them. Well-organised structure will help Macro to implement strategies into actions.
7 Proposed strategies: Functional-level strategy
In order to improve functional performance, Woolworths also must adopt modified functional-level strategies including financial, marketing, and supply chain strategies.
7.1 Financial strategy
The total retail value of the Australian organic market consolidated from both primary industry figures
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Strategic Plan for Woolworths/Macro Wholefoods
and industry intelligence for fresh and processed lines is estimated to be $1 billion per annum. As such, at this point the Australian organic industry commands around 1% of the foodstuff market. That is approximately half of that figure in the USA, where organic sales account for closer to 2% of the foodstuff market. However, it is important to note that, globally, the market is in its infancy, with 20% p.a. growth in the USA and 30% p.a. growth in the UK. In Australia, supermarkets account for approximately 60% of all organic sales. In a Woolworths store with high organic turnover, around five percent of fresh produce sales are organic (Biological Farmers of Australia Ltd, 2010).
In order to determine the attractiveness of the opportunity, we have built a financial model. Financial calculations are based on the following assumptions and projections:
•The market share of supermarkets will grow from 60% to reach 80% by 2021 (as the market becomes less fragmented and trends towards wider industry norms).
•Projected growth rate for the wholefoods industry in Australia is 20% p.a. for the period 2012-2015, 15% p.a. for 2016-2018, and 10% p.a. for 2019-2021.
•Macro’s current market share is 10% of supermarket sales.
•Target Macro’s market share for the year 2021 is estimated to be 40% of supermarket sales. The results of our modeling can be seen in the table below. With the Wholefoods’ market share increasing from 10% to 40% of total supermarkets sales in the industry with annual growth of 10%-20%, Macro has to spur its growth to 86% in 2012. This growth will slow down as the industry matures and is predicted to reach 19% in 2021. Considering the growth rate of the wholefoods market and assuming that Macro adopts aggressive growth strategy, the projected goals are achievable. This will allow Macro to substantially enhance its presence in the total wholefoods market from 6% in 2012 to 32% in 2021.
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