Company Overview
The concerned organization for the report is Woolworths Supermarkets which is an Australian supermarket chain owned by Woolworths Limited. The organization was founded in the year 1924 and since then the modifications in the organizational offerings has helped the same in maintaining the efficacy of the operations. The concerned organization undertook a duopoly with Coles, which constituted of around 80% of the Australian retail markets (Aven 2016). The diverse range of offerings of the organization (groceries, DVDs, health related products, household products, baby products and stationery commodities) has helped the same in adhering to the needs of wide range of customers in the market. On the other hand, the modifications in the line of product offerings of the business have helped the same in maintaining the efficacy of the operations.
The concerned organization currently holds around 1000 stores, 976 supermarkets and around 19 convenience stores in order to support their smooth functioning in the different regions of the Australian markets (Creeden et al. 2013). Diverse range of technological innovations that are undertaken by the organization has helped the same in upholding the competitive advantage of the same. The revenue of the organization was calculated to be A$ 56.726 billion as was computed by the end of the fiscal year 2018 (Aven 2016). The different aspect of change that is undertaken by the organization has helped the same in maintaining the efficacy of the operations of the same while operating in diverse regions of Australian markets.
2. Consultation and Communication
| Stakeholder | Role | Stakeholder’s agenda for Risks |
| Suppliers | The suppliers of the organization plays a major role in upholding the smooth operations of the business | The agenda of the suppliers is to provide the organization with information on the inventory of raw material and finished products |
| Employees | The employees of the organization helps in facilitating the smooth functioning of the processes that are planned by the management for supporting the competitive advantage (Seuring and Gold 2013) | The employees undertake the collaborative operations of the same in order to meet their individual targets for avoiding the risks (Loorbach and Wijsman 2013) |
| Shareholders | Shareholders of the organization aim at providing the business with financial resources for the smooth functioning of the Woolies. The total holdings that are undertaken by the shareholders contributed to the revenue streams of the corporation. | The profitability of the business is one of the guiding force that influences the shareholders of the business |
| The Government | The regulations that are framed by the government in the nation help the organizations in guiding their activities. On the other hand, the government of the nation plays a major role in supporting the activities of the organization in the homeland as it helps in enhancing the economic position of the nation (Armstrong, Cools and Sadler‐Smith 2012). | The government’s agenda is to impose different regulatory frameworks in order to minimize the financial and other risks that might be faced by the business |
| Investors | The investors support the business of Woolworths through capital investments. The capital investments helped the organizations in maintaining the efficacy of the operations | The agenda of the investors are based on the profitability of the organization. Profitability of the organization is one of the major priorities of the investors as they invest their capital on the venture. |
The organization currently undertook AUS 2005; 113 risk management method, which helped the same in identifying the risks, and thereby allocate preferable resources as per the criteria. The organization is planning to undertake different communicative measures through meetings with the stakeholders for transmitting all the important information on different changes that are planned by the business for avoiding certain risks. The risks that are faced by the concerned organization is based on the lack of international presence of the same. Franks et al. (2014) stated that the globalization has offered the organizations in making aggressive expansion in the different international markets. Currently the organization undertook consultation with the board members before implementing a change. The risks in the organization are assessed as per the research of its undertakings in the different markets. However, the organization is planning to undertake the rational decision making process in order to assess the risks and thereby implement different changes in the processes. The organization undertakes consultation with different consultancy organizations and the stakeholders that are well aware of the market situations and negotiate with the same.
3. Identification and analysis of Risks
The risks that are faced by the organization are based on the quality of the undertakings. The key elements of change that are undertaken by the organizations are based on the identification of the risks and the manner in which they might be mitigated in order to facilitate the smooth functioning. Paape and Speklè (2012) stated that the culture of the organization helps in understanding the risks that might be faced by the same while operating in diverse economies. The concerned organization, Woolworths, has taken steps to prioritize the customers over the other stakeholders in order to maintain the sustainability of the same. The organization is certified with the ISO quality assurance, which helped the same in retaining the loyalty of the customers. Currently the organization identifies, analyzes, evaluates and ranks, treats and monitors the risk for facilitating the smooth functioning of the processes. However, the lower international presence of the organization has affected the wider customer base of the business. Woolworths operates in the different regions of Australia. The organization did not take any step for expending in the other economies, which limited their customer base within the regions. On the other hand, the new entrants in the retail; industry and the threat of the substitute products resulted to risks relating to the sustenance of the business. Hofmann et al. (2014) stated that the fluctuations in the global economies also pose a serious threat to the organizational operations. The risks that are encountered by the concerned organization has affected the performance of the same in the relevant market sections.
Figure 1: The progress made by Woolworths as per the identified risks
(Source: Bromiley et al. 2015)
3.1 Establishment of the Context and Identification of Risks
| Political | Technology |
| The political pressure towards a duopolistic retail markets has restricted the functioning of the business. The unstable political situation of the Australian markets has affected the objective of uninterrupted functioning of the business in the different market sections in Australia. | The introduction of SAP based technology in the retail markets has enhanced the competition in the duopolistic markets. The technological innovations in retail markets have helped in enhancing the rate of competition in the markets. |
| Economic | Environmental factors |
| The free trade policies of the organization have enabled the growth of the new entrants in the Australian markets. | The environmental regulations that are induced by the Australian government have restricted the smooth functioning of the organizations. |
| Social issues | Legislation |
| Poor relation with the suppliers and other stakeholders of the organization has affected the smooth functioning objectives of the same. | The legal issues with ACCC (Australian Competition and Consumer Commission) have restricted the activities of the organization relating to expansion in the duopolistic retail market situation (Vilko and Hallikas 2012). |
| Competitors | Other |
| The different competitors of the business are Aldi, Amazon, eBay, Coles Group, Walmart and Tesco. The competitors of the business have affected the expansion objectives of the same while operating in the different parts of Australia. | The other issues that are faced by the organization are based on the lack of proper communication with the customers, which has restricted the designing and marketing capabilities of the same. |
3.2 Risk Identification
| Strengths | Weaknesses |
| Well known brand image of the organization Wider range of products and services Efficacy in the CSR activities of the organization has helped the same in gaining the trust of communities (Kern et al. 2012)Enhanced quality of the products and services offered by the organization has helped in retaining the loyalty of the customers | Lack of suitable international presence and marketing capabilities of the organization The growing competition in the Australian retail industry has affected the processes of the business |
| Opportunities | Threats |
| The growing potentiality of the developing economies might assist the organization in undertaking expansion The organization might provide the customers with better promotions in order to retain the loyalty of the same while operating in different economies The organization might undertake social media integration initiatives in order to maximize the customer engagements (Colicchia and Strozzi 2012) | The heavy loss of customers by the end of the financial year 2017 has affected the business processes that are planned by the same. Aldi’s aggressive expansion in the different parts of market has affected the competitive edge of the concerned business venture (Alhawari et al. 2012). The slow growth of the online retails in the Australian markets has restricted the growth of the organization while operating in the diverse regions. The slow growth of the industry has also restricted the demand that is faced by the business. The new entrants in the Australian retail markets have affected the growth of the concerned business. The threat of substitute products has resulted to switching customers, which affected the profitability of the venture while operating in the Australian markets. |
As per a report, the petrol pumps owned by Woolworths and Coles were affected through a allegation by the Chairman of ACCC against the petrol shopper dockets, as the scheme was believed to hurt the interests of many fuel retailers (Ghadge, Dani and Kalawsky 2012). The intervention of the ACCC restricted the smooth functioning of the concerned organization due to enhanced competitiveness. On the other hand, introduction of ERP (Enterprise Resource Planning) systems in the organizational processes helps in maintaining the efficacy of the operations that are undertaken by the organizations. The ERP technology has helped the organizations in facilitating inventory management. Inventory management of the organization helps in maintaining the smooth functioning of the supply chain operation as per the priorities. However, regulations relating to the reduction of the carbon foot prints and emissions has maximized the costs that are incurred by the concerned organization while operating in diverse regions of the Australian markets. The implementation of different monitoring and emission controlling devices has resulted to maximization of the operating costs of the organization. Alternatively, lack of suitable collaboration with the stakeholders like the suppliers and the distributors has affected the supply chain and logistics department of the concerned business. The different environmental regulations have restricted the smooth functioning of the businesses while operating in diverse international markets. Therefore, the different issues that are faced by the organization restricted the smooth functioning of the same to support the objectives of sustenance.
3.3 Risk Analysis, Evaluation and Prioritisation
3.3.1 Identification of risks
The risks that are faced by the concerned organization are:
- Marketing risks
- Risks relating to regulations
- Lack of adequate stakeholder participation in operations
- Lack of proper communication
- Resource insufficiency
- Lack of understanding the demand faced by the organization
- Lack of proper health and safety measures
- Fluctuations in the global economies
- The decreasing quality of the products and services
- The failure of the operating process planned by the organization
3.3.2 Explanation of risks
The operations that are undertaken by Woolworths are restricted to the definite regions of the Australian markets. It has affected the growth of the organization in maintaining their efficacy of holding a large customer base. Moreover, the lack of international presence of the organization has affected the capability of the same while operating in diverse international markets. The chief modifications that are undertaken by the organization are dependent on the prioritization of the needs of the customers. However, the new entrants in the retail markets has restricted the operations of the same as the customers switched to the substitute products offered by the competitors in a lower price (Wieland and Marcus Wallenburg 2012). Lack of suitable marketing operations of the concerned business has restricted the promotional activities of the same. The organization prioritizes the customer concerns as their major objective in order to adhere to the changing needs of the same. However, lack of international presence has affected the organizational activities and retention of large customer base. The enhanced competition that is faced by the organization in the retail industry is due to Aldi’s aggressive expansion in the different market sections. It has provided the concerned business with lower scopes of expansion in the different market sections.
The organization also faced different issues while operating in a duopolistic retail mar4ket as the ACCC has levelled charges against the organization relating to the increased competitiveness and price hikes. The organizational operations has affected the interests of the different other businesses in the Australian markets. The growing concern of the organization in making its expansion in the Australian markets is dependent on the regulations that are imposed by the ACCC. Wu, Chen and Olson (2014) stated that the ACCC has restricted the operations of Woolworths in Australian markets for promoting the growth of other businesses and to uphold the concerns of corporate ethics. Therefore, the organization faced different risks with higher likelihood of affecting the operations while expanding their venture in the Australian markets.
4. Risk Register Plan
| Risk Register Part A. Risk register: (Woolworths) | |||||||||
| Function (activity e.g. department): | Compiled by: | Date: | |||||||
| Date of risk review: | Reviewed by: | Date: | |||||||
| Risk Reference (unique identifier code) | What is the risk? (Risk) | What can happen? (Event) | How can it happen? (Cause) | What can happen? (Consequences/level of impact) | Current control strategiesA (Adequate)M (Moderate)I (Inadequate) | Current risk level analysis | Risk priority (refer to risk matrix and attach matrix in appendix) | Acceptability of RiskA (Acceptable) or U (Unacceptable) | Treat Risk Yes or No |
| Likelihood | Consequences | Levelof risk | |||||||
| MAR01 | Marketing risks | Lack of proper awareness among the customer groups | Lack of suitable communication mediums chosen by the organization | 1. Failure of expansion strategies2. Failure to retain the customers | Moderate | Almost certain 80% / catastrophic $ 1.5million< 0.5% | 2 | A | yes |
| REG01 | Risks relating to regulations | Breakdown of operations | Loss of flexibility in operations | Breakdown of operations | Inadequate | Likely 65% / major $ 85 Billion < 0.7% | 1 | A | yes |
| STAKE01 | Lack of adequate stakeholder participation in operations | Process breakdowns | Loss of collaborative approach | Process breakdowns | moderate | Likely 52% / moderate $ 90 billion < 1.2% | 1 | UA | Yes |
| COMM1 | Lack of proper communication | Process breakdown | Miscommunication in the different departments | Process breakdown | moderate | Possible 42% / moderate $ 1million < 0.23% | 3 | A | Yes |
| RES02 | Resource insufficiency | Supply chain breakdown | Lack of ERM practices | Supply chain breakdown | Adequate | Likely 56% / moderate $92 billion < 0.42% | 2 | UA | Yes |
| MARRES02 | Lack of understanding the demand faced by the organization | Inability to design processes | Lack of proper market research | Inability to design processes | Inadequate | Unlikely 26% / moderate $ 87 billion < 0.5 % | 1 | A | Yes |
| HEALTH04 | Lack of proper health and safety measures | Compromised health and safety of the workforce | Inability of the workforce to undertake smooth functioning | Compromised health and safety of the workforce | Moderate | Rare 15% / minor $ 47 billion < 0.4% | 2 | A | Yes |
| FLUCTUATINGECO01 | Fluctuations in the global economies | Affects the profitability of the venture | Expansion in the diverse economies without proper knowledge of the economic condition | Affects the profitability of the venture | Inadequate | Unlikely 30% / minor $ 45 billion < 0.2% | 1 | A | Yes |
| QUALITY04 | The decreasing quality of the products and services | Decreasing customer loyalty | Lack of quality monitoring systems | Decreasing customer loyalty | Moderate | Rare 9% / insignificant $ 23 billion < 0.1% | 2 | UA | Yes |
| OPERATIONAL01 | The failure of the operating process planned by the organization | Minimization of organizational productivity | Lack of proper planning | Minimization of organizational productivity | Adequate | Rare 12% / insignificant 26 billion < 0.2% | 3 | UA | Yes |
| Risk Register Part B. Risk register: (Woolworths) | ||||||
| Risk Reference (unique identifier code) | Potential treatment options | Person responsible for monitoring the risk | Cost to implement risk treatment | Time frame to implement treatment | Monitors to measure the effectiveness of the risk treatments | Treatment of Risk Complete Yes or No |
| MAR01 | 1.Social media integrations2. Establishing suitable marketing communications and promotions | Marketing manager | $4.5 million | 7- 8 months | Increasing customer base of the organization Receptive nature of the consumers in the different economies | No |
| REG01 | 1.Flexibility of operations | Internal auditor | $1.5 million | 7- 9 months | Smooth functioning of the organization in the Australian markets | Yes |
| STAKE01 | 1.Facilitate stakeholder engagement programs | PR executives | $2.5 million | 1 – 5 years | Collaborative functioning of the stakeholders as per the needs of the organization | Yes |
| COMM1 | 1. Establishing a sound communication system | IT manager | $3 million | 1- 3 years | Enhanced communication with the stakeholders | No |
| RES02 | 1. Setting up an ERM (Enterprise resource management) system | Operations head | $ 5 million | 2 years | Suitable resource allocation and inventory management | Yes |
| MARRES02 | 1. Establishing a team of market research | IT and communication | $ 2 million | 3 years | Identification of the demand and concerns of the end level consumers | No |
| HEALTH04 | 1. Creating regulations relating to health and safety of the employees | Legal advisor | $ 1.5 million | 1.5 years | Smooth functioning of the workforce | No |
| FLUCTUATINGECO01 | 1. Establishing R&D | Marketing department | $ 3.7 million | 3 years | Undertaking investments in the profitable economies | No |
| QUALITY04 | 1. Quality control, and monitoring systems | Quality control | $ 2 million | 2 years | Enhanced quality of products and services | Yes |
| OPERATIONAL01 | 1. Proper planning | Process designers | $ 1.7 million | 3 years | Minimization of operational failures | No |
Action Plan
| Goals | Actions | Timeframe | Relevant stakeholders |
| Digital marketing | Research of the market situation Investigating costs of implementing software implementation Implementing the process | 7- 8 months | IT managers |
| Framing flexible regulations | Identifying the market concerns Meeting with board of directors Implementing changes in the policies | 7- 9 months | Auditors and government agencies |
| Facilitate stakeholder engagement programs | meetings with the stakeholders | 1 – 5 years | PR executives |
| Establishing a sound communication system | Research of the market situation Investigating costs of implementing digital communication technologies Implementing the process | 1- 3 years | IT manager |
| Setting up an ERM (Enterprise resource management) | Research on cost of implementation implementation | 2 years | Operations head and internal auditors |
| Establishing a team of market research | meetings with the board members recruiting experts creation of team | 3 years | IT and communication |
| Creating regulations relating to health and safety of the employees | research on the market situation creating regulations as per the standards set by the ISO | 1.5 years | Legal advisor |
| Establishing R&D | Recruiting engineers and specialists creating the R&D team | 3 years | Marketing department |
| Quality control, and monitoring systems | Monitoring the processes Creating frameworks for quality checks | 2 years | Quality control |
| Proper planning | consultation with the experts meetings and consultations planning as per the assessment of the capabilities and competencies of the organization | 3 years | Process designers |
Monitoring plan
| Goals | Person maintaining the risk register | Frequency of reviewing the plan and the register | Frequency of reporting progress | Person reported to | Frequency of reporting |
| Digital marketing | Marketing head | Every 2 weeks | Once a week | Risk manager | Quite often |
| Framing flexible regulations | Auditors and legal advisory board | 1 month | Twice a month | Risk manager | Often |
| Facilitate stakeholder engagement programs | PR manager | 3 months | Once in three months | Risk manager | Rare |
| Establishing a sound communication system | IT manager | 5 months | Twice a month | Risk manager | Rare |
| Setting up an ERM (Enterprise resource management) | Logistics and supply chain manager | 3 months | Twice a month | Risk manager | Quite often |
| Establishing a team of market research | Market research manager | Every 2 weeks | Once a week | Risk manager | Often |
| Creating regulations relating to Health and safety of the employees | Policy makers and auditors | 3 months | Thrice a month | Risk manager | Quite often |
| Establishing R&D | R&D head | 3 months | Twice a month | Risk manager | Quite often |
| Quality control, and monitoring systems | Quality monitoring manager | Every 2 weeks | Once a week | Risk manager | Often |
| Proper planning | Operation manager | Every 2 weeks | Once a week | Risk manager | Often |
References
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