Answer

Executive Summary

Woolworths Group was established in 1924 as Woolworths Stupendous Bargain Basement in Sydney, Australia. Since its establishment, the company has grown to be a major Australian firm with widespread retail interest throughout the country and New Zealand. Currently, the company is headquartered at Bella Vista, Australia. Woolworths has made efforts in embracing environmental safety actions in areas related to energy consumption, raw materials, emission target levels, stakeholder engagement, and product issues. Considering the various protective measures that it has embraced to limit negative impacts on the environment, it can be argued that Woolworths is proactive in its approach to environmental sustainability. However, to enhance its proactive approach to environmental sustainability and effectiveness, the company should embrace five measures. These measures are: enhancing energy efficiency by being efficient with cooling and heating, intensifying efforts on green raw material sourcing and waste control, ensuring that its stores’ designs are green, incorporating farmers’ names on the food labels for fresh products sourced from farmers employing sustainable methods of farming, and intensifying green transportation efforts. The paper discusses these measures in detail.

Introduction/Background

Overview of the Company

Brief History

Woolworths Group was established in 1924 as Woolworths Stupendous Bargain Basement in Sydney, Australia (Woolworths Limited 2008). The company’s founders were Percy Christmas, George Creed, Cecil Scott Waine, Stanley Chatterton, and Ernest Williams. The firm grew in the 1920s and 1930s to open novel stores in Australian cities such as Perth, Brisbane, and Melbourne. Besides, the company’s operations were expanded to New Zealand in 1929 with the opening of a general merchandise operation in Wellington (Woolworths Limited 2008). Since its establishment, the company has grown to be a major Australian firm with widespread retail interest throughout the country and New Zealand. Currently, the company is headquartered at Bella Vista, Australia

Target Market/Activities

Woolworths Group’s activities are related to the following areas (IBIS World 2018):

• Discount department stores
• Supermarkets
• Pubs
• Hotels
• Liquor retailing
• Australian food

 Positioning in Key Target Market Segments           

Positioning involves marketing a product or brand in a manner that creates and establishes an identity or image in the minds of consumers within the target market. Woolworths employs different positioning approaches in different market segments. For instance, in the food retail segment, the firm initiates its marketing campaigns in ways that emphasize streamlining deliverance of its commodities directly from farmers to the store shelves (Woolworths Group 2018). In online shopping, the firm positions itself for efficiency and reliability.

Description of the Company’s Key Target Market

Description of the Market

Woolworths operates throughout Australia and in New Zealand. The company owns a Victorian delivery fleet. However, most of the transport and logistics in the market are executed by third-party road carriers, airfreight, and shipping operators. The firm also employs transport management systems in streamlining product transportation (Woolworths Group 2018). Wireless communication technologies are employed in conversing with suppliers, distributors, and consumers. When it comes to product distribution, the company has distribution centres in major cities across the Australia from where products can be made accessible to buyers even those in remotest regions. Low-pricing and multiple-unit pricing approaches are employed by competitors. Woolworths employs low-pricing in attracting customers. The firm accomplishes this goal by providing a range of commodities at low prices (Reglos 2016). The multiple-unit pricing approach offers buyers an attractive price for purchasing a given amount of items. Moreover, Woolworths employs psychological condition strategy in pricing its products (The New Daily 2017). This strategy involves making buyers to believe that discounts are provided for products by using neat, whole figures.

Consumers’ decisions to buy food items are influenced by convenience and price (PricewaterhouseCoopers 2018). Purchases of meal kit continue to be steady with 50 percent of buyers buying and using services associated with meal kit (PricewaterhouseCoopers 2018). In addition, shoppers prefer food delivery services for convenience. Catalogues are employed as key sales promotion and advertising mechanisms by retailers (Cameron et al. 2015). Companies employ a range of marketing communication techniques in advertising their products including sales promotion, websites, social media, and television and radio ads

Comparison and Contrast of Woolworths Group with Key Competitors

Woolworth’s top five competitors are Coles, Aldi, Distributors, Safeway, and Giant Eagle with annual revenues amounting to $25billion, $99.8 billion, $11 billion, $48.9 billion, and 8.9 billion respectively (Owler Inc. 2019). Woolworths boasts annual revenue of $58.9 billion (Owler Inc. 2019). As aforementioned, Woolworths operates in several sectors. This paper focuses on the retail sector in where the company boasts a market share of 31% followed by Coles, Metcash, and Aldi at 23%, 17%, and 2.5% respectively.  These companies compete with Woolworths in the provision of products such as fruits, vegetables, hard products, and meat among others.  Nonetheless, Woolworths has established a robust brand known for freshness. Woolworths sells some of its food products such as milk, cheese, and bread among others at higher prices relative to competitors. For instance, the price for a loaf of bread is $2, $1.5, and $1.49 at Woolworths, Coles, and Aldi respectively (News Pty Limited 2019). Competitors employ similar promotion techniques including discounts, digital marketing, special pricing, and influencer marketing. Moreover, firms have extensive distribution networks. For instance, throughout Australia, Woolworths and Coles boast over 933 and 762 respectively (Marketing Magazine 2017).

Environmental and Sustainability Issues Identified within Plans

Corporate Plan

Woolworths recognizes its environmental impact across the company’s value chain. As such, the company’s corporate plan entails working with its service providers, operations, and suppliers with the aim of innovating for a health planet (Woolworths 2018). The strategic plans that Woolworths has established to accomplish this goal are explained in the subsequent subheading. 

Strategic Plans

The firm has established a strategic plan for manufacturing which focuses on sourcing environmentally sustainable commodities. This plan will be accomplished in two ways. First, the firm will source key commodities and raw materials in a sustainable manner to an independent standard by the attainment of 2020 (Woolworths Group 2018). Woolworths will also focus on raising awareness of sustainably sourced products. Second, the company will focus on achieving zero deforestation within its supply chain for high-impact items within the firm’s brand products like timber, palm oil, paper, pulp, and packaging (Woolworths Group 2018).

Specific Environment Related Plan

Woolworths’ environment related plans are responding to climate change and moving towards a circular economy. The company intends to move towards a circular economy by ensuring zero food waste goes to landfill and improving the recyclability of its own brand packaging (Woolworths group 2018). The firm aims at responding to climate change by reducing its carbon emissions to 10% below carbon emission levels of 2015, innovating with natural refrigerants and reducing refrigerant leakage within its stores by 15 % of carbon emission below levels registered in 2015 (Woolworths Group 2018).

The Current Environmental Information Gathering System

The Method of Collecting Information

The company employs a cloud-based data gathering system in monitoring and managing the progress of its environmental impact of all its distribution centres, stores, and support offices (Woolworths Group 2018). The system enables the firm’s headquarters to gather data from its support offices, distribution centres, and stores.

The Nature of the Information Collected

Woolworths gathers environmental information associated with chemical substances, environmental costs, waste, water, and energy (Woolworths Group 2018).  

Distribution of the Information to Key Decision Maker

The information is delivered to key decision makers and stakeholders via press releases, webcasts, reports, and presentations at public hearings. Other avenues for distributing information are e-mail, CD-ROM, relational database, teleconferencing, internet-based web pages, and videoconferencing (Woolworths Group 2018).

Structure of Environmental Decision making Processes

Sustainability Committee

The company’s sustainability committee comprises the committee of its Board (Woolworths Limited n.d.). Currently, the Board comprises the following (Woolworths Group 2019b):

• Gordon Cairns (Chairperson)
• Brad Banducci (Chief Executive Officer)
• Jillian Broadbent
• Holly Kramer
• Siobhan McKenna
• Scott Perkins
• Kathee Tesija
• Michael Ullmer

The committee is constituted of at least three directors and is chaired by an independent director. The Board from members of the sustainability committee appoints the chairperson, who is not supposed to by the Board’s chairperson (Woolworths Limited n.d.). Most of the committee members are independent directors assessed by the company’s Board. The company’s secretary serves as the sustainability committee’s secretary.

Connections with other Functional Areas

The firm’s sustainability committee is in charge of advising and assisting the Board in monitoring actions and decisions of management in accomplishing Woolworths’s goal of being a sustainable company (Woolworths Limited n.d.). The committee’s relationship with other functional areas is established by its responsibilities in areas such as safety and health, organisational reputation, compliance, environment, social responsibility, and community.  

Key Environmental Targets or Objectives

Woolworths’ key environmental targets or objectives focus on prosperity and people. The firm aims to attain the following environmental targets (Woolworths Group 2018; Woolworths Group 2019):

• Innovation with natural refrigerants and reduction of refrigerant leakage in the firm’s stores by 15% of CO2 emissions by 2020
• Inspire all organisational consumers to consume all of the company’s products in a healthy and sustainable manner by 2020
• Decrease its carbon emissions to 10 percent below the levels of carbon emission registered in 2015 by 2020
• Achieve zero food waste in the landfill and improving the recyclability of its brand packaging by 2020
• Sustainable sourcing of key items and raw materials to an independent standard and increase awareness of sustainably sourced products by 2020
• Achieve zero deforestations within the company’s supply chain for high-impact products such as timber, packaging, palm oil, paper, and pulp by 2020

Key Environmental Activities and Impacts

Energy Consumption

Woolworths focuses on energy efficiency with the aim of reducing greenhouse gas emissions. The company accomplishes this goal by investing in several initiatives targeted at optimising energy use across its stores, support offices, and distribution centres. The firms is switching all lighting within its stores to light-emitting diode (LED), improving efficiency in air conditioning and refrigeration, and installing solar panels on its roofs. The company has managed to achieve 15% leakage reduction from the installation of refrigerators. Woolworth has also made progress in improving energy efficiency.

Raw Materials

The company sources all its branded chocolate blocks and tea in a sustainable manner. Besides, 70 percent of Woolworths’ sugar and coffee is sourced in a sustainable way. The company’s food products employ certified sustainable palm oil. As a result, the company has managed to ensure better opportunities for farmers in relation to the implementation of sustainable farming techniques.

Transportation

Even though the firm owns a Victorian delivery fleet, some transport services are sourced to third-party transportation service providers on long-term contracts (Woolworths Group 2018). As such, the company is unable to monitor and report environmental impacts and emission levels under such arrangements.

Emission Targets Level

The company’s target levels for emissions have been established. For instance, the company attained 13% carbon emission level, which is below that of 2015. 

Stakeholder Engagement

Woolworths engages several stakeholders including customers, shareholders, communities, suppliers, and employees in its sustainability efforts. The company engages customers by offering reliable, safe, and responsibly sourced commodities. The firm engages shareholders by providing sustainable value creation within the business.  Community engagement is accomplished by supporting every community served by the company. Woolworths also involves suppliers by fostering long-term trusted associations (Woolworths Group 2019; Woolworths Group 2018b).

Product Issues

Woolworths focuses on reducing plastic packaging and helping its teams and customers to recycle. The company has installed soft plastic recycling bins in all its stores throughout Australia (Woolworths Group Limited 2018). In this manner, customers can take soft plastics to the company’s stores for recycling. Moreover, the firm is employing more recycled content and less plastic across its range. These measures have enabled Woolworth to make significant steps towards reduction of waste emissions. When it comes to waste control, the firm has a Farmer Donation Program that enables its stores to donate bakery waste and surplus product to local farmers. These donations are used for animal feed. This undertaking has enabled the company to accomplish significant steps in reducing food wastes.

Assessment of the Nature and Types of Environmental Safety Actions Being Undertaken

Woolworths has made efforts in embracing environmental safety actions in areas related to energy consumption, raw materials, emission target levels, stakeholder engagement, and product issues. When it comes to energy consumption, the firm continues to prioritise energy efficiency with the aim of limiting greenhouse gas emissions. Examples of measures embraced by the company in its stores, support offices, and distribution centres are installation of solar panels, installation of LED lighting, and improvement of efficiency in air conditioning as well as refrigeration. While these measures have enabled the company to attain energy efficiency, as seen in the reduction of leakage by 15%, the firm should focus on the embracement of other measures that can enhance energy efficiency, especially in the areas of cooling and heating.

When it comes to raw materials, the firm embraces sustainability in sourcing its chocolate blocks and tea. Nevertheless, the company continues to make significant steps towards the attainment of green sourcing. For example, Woolworths uses sustainable palm oil in its food products, and this has enabled the company to open sustainable farming opportunities for local farmers. However, the company has not accomplished 100% sustainable sourcing of certain products such as sugar and coffee. For example, the sourcing of 30% of the firm’s sugar and coffee is not done in a sustainable manner. In addition, the sourcing of timber, paper products, and pulp form recycled or certified sources has not been accomplished in an effective manner.

The company has also made efforts towards involving stakeholders such as communities, suppliers, shareholders, and customer in its sustainability initiatives (Woolworths Group 2019; Woolworths Group 2018b). Nonetheless, the firm has not made efforts to partner with other agencies such as non-governmental organisations and other retailers in promoting sustainability actions. In relation to product issues, Woolworths has made significant steps in eliminating wastes. For example, the company has managed to attain significant reduction of plastic packaging and increased package recycling by installing soft plastic recycling bins in its stores throughout Australia (Woolworths Group Limited 2018). The firm also employs recycled contents in product packaging. Moreover, the company donates surplus commodities and bakery wastes to farmers for animal feed. Nevertheless, the company should focus on implementing extra waste reduction measures that can enable it to accomplish its 2020 sustainability targets for waste reduction. When it comes to emission target levels, Woolworths has embraced measures that have enabled the company to attain a 13 percent carbon emission level. The company owns a Victorian delivery fleet and has opened over 900 distribution centres as a means of limiting emissions from transportation. Considering the various protective measures that it has embraced to limit it negative impacts on the environment, it can be argued that Woolworths is proactive in its approach to environmental sustainability. However, to enhance its proactive approach to environmental sustainability and effectiveness, the company should embrace the measured recommended in the subsequent section.

Recommendations

Considering the above analysis, Woolworths’ management should embrace the following measures to enhance the attainment of its environmental sustainability goals:

1. Enhance energy efficiency by being efficient with cooling and heating. Cooling and heating system can consume up to a ton of energy. As such, the company should focus on saving energy by subjecting its heating, ventilation, and air conditioning (HVAC) equipment to tuning every year. Andrushchak (2018) argues that yearly tune-up of the cooling and heating system improves efficiency and comfort. Woolworths can also be efficient with the cooling and heating by installing a programmable thermostat. This equipment is ideal for areas that remain unoccupied during certain periods of the week such as warehouses and stock rooms. These rooms should be kept warm in the summer and cooler in the winter, as they have limited traffic.
2. Intensify efforts on green raw material sourcing and waste control. Green souring of raw materials serves as a significant step towards the realization of sustainability goals (Andrushchak, 2018). Currently, only 70% of the company’s sugar and coffee is under sustainable sourcing. Moreover, the firm has not managed to accomplish a 100 percent sourcing of its pulp, paper, and timber products from certified or recycled sources. Therefore, the firm’s management should ensure that all these raw materials are sourced in a sustainable way. Adopting micro receipts in its stores can help the company to minimise waste release further. This approach saves up to 80 percent of receipt paper (Andrushchak, 2018).
3. Ensure that its stores’ designs are green. Having green stores contributes significantly to companies’ environmental sustainability efforts (Andrushchak, 2018). Woolworths should ensure that all its stores’ designs green by opting for sustainable materials in its décor and displays. The company can accomplish this goal by sourcing its displays and props from vendors that employ eco-friendly materials.
4. Incorporating farmers’ names on the food labels for fresh products sourced from farmers employing sustainable methods of farming. Andrushchak (2018) asserts that such an undertaking helps to raise customers’ loyalty and interests by assuring that products are fresh from known suppliers and safe for consumption
5. Intensify green transportation efforts. Transportation accounts for a significant portion of emissions of greenhouse gasses and release of waste to the environment (Andrushchak, 2018). Woolworths can intensify green transportation efforts by involving vehicles with big load capacities in its Victorian delivery fleet and building more distribution centres to limit distance travelled by vehicles and number of vehicles conducting deliveries. The firm can also embrace returnable packaging along with effective and planned fleet management by turning off engines during deliveries and pickups, and ensuring appropriate vehicle speed and tire.