Reference no: EM134011122 , Length: Word Count:1500

Case Scenario: Amazon is Disrupting Major Supermarkets

As a major player in the digital business space, Amazon is competing with Woolworths on the grocery market. This is done through a reduction in price to undercut the big supermarket chains. Some key facts and figures are presented below:

Some products are priced lower to consumers than the supermarket's purchase price
Supermarket giants are worried that brand owners are favouring Amazon as they can offer lower prices to customers (perhaps offering Amazon better terms)
Selling to Amazon at cheaper prices could adversely impact brands (pricing control and favour with major supermarkets)
Amazon has less than 1% of the online food and grocery market, which grew 39.7% over the last 12 months (Nielsen 2018)
Amazon.com.au now has more than 2500 food and grocery products on its site.

Your task

To adequately compete with Amazon and ensure that they do not take up too much market share, you have been hired as an external consultant by Woolworths to design a strategy on how they can compete with Amazon appropriately. Provided below are several internal and external issues that Woolworths are grappling with that need to be solved. These are outlined below:

Worried shareholders: Shareholders are worried about Amazon's rise as they see this as a threat to the share price of Woolworths
Poor online customer service: Woolworths customers have been complaining that when they try and order their groceries online (website and mobile) they can't sufficiently ask questions and engage with staff members for advice and/or enquiries. You may refer to Analyzing Customer Service Needs while discussing this issue.
Social media ineptitude: Woolworths is worried that their social media interactions are insufficient and unengaging and that consumers do not have any desire to interact with the brand
Corporate staff insufficiently trained: The company has identified that not all their staff members are sure of how the online grocery ordering system works. This also extends to payment to suppliers
Price: Woolworths is unable to compete with Amazon on prices of particular products
Website not so user-friendly: Amazon's online ordering system is much more user-friendly than Woolworths. Concepts from Challenges And Promises Of Online Marketing may support this discussion.
Distribution: Woolworths has more effective distribution channels than Amazon already set-up. However, Woolworths managers feel that Amazon is starting to make strong moves in this space. Not only that, but costs for the different buying channels for consumers is higher than simply operating online. You may also consider Supply Chain Management concepts when evaluating this issue.
Supplier relationships: Some suppliers are willing to offer Amazon better terms than terms offered to Woolworths
Brand reputation: Woolworths has noticed that its reputation is decreasing, and Amazon's is increasing its market share. Relevant ideas from Brand Equity can be explored here.
Poor consumer loyalty: Consumer loyalty is difficult to establish and while Woolworths has a large market share, consumers don't seem to be particularly loyal

As highlighted above, Woolworths has a number of worrying issues they need to deal with and that they see as a threat from Amazon. To assist Woolworths, you need to select 2 issues and develop innovative solutions to dealing with these issues.

What does your solution look like?

Your solution needs to be innovative and draw on material and theory learned throughout the semester (e.g., we discussed the new consumer decision-making process... how can Woolworths use this?)
Your solution needs to be a step-by-step implementation guide with control measures highlighted along the process (control refers to different evaluative tools)
You need to consider costs and timeline (include a realistic budget based on evidence and a timeline of key activities)
Who in Woolworths should be implementing your solution (this refers to a role, not a name)? Consider if a new role needs to be created, what would this look like?
Your solution needs to be based on evidence from both business and academic sources. In saying this, if you have a completely innovative solution to a problem that has not been thought of before, then this will be considered

What will you be marked on?

Two chosen issues and two solutions (one solution per selected issue): Each solution is clearly and specifically stated. The solution is logically linked to the problem and is innovative.
Implementation and control: A thorough and specific implementation plan is clearly identified for each solution.
Digital business theory: There is a clear integration of relevant digital business theory in the solutions provided (i.e. systems thinking).
Sources of evidence: High-quality, credible, relevant sources to develop ideas that are appropriate for the development of solutions.
Writing style: Language is clear and expressive showing a strong writing style and without grammar, punctuation, usage, and spelling errors.

Other instructions

The word count for the report is 1500 words (+10%).
You do not need to include an executive summary, introduction or conclusion.
Focus needs to be on solutions and how you can best present this to Woolworths executives.