Strategic Management for Framework and Empirical Illustration

 Describe about the Strategic Management for Framework and Empirical Illustration.


Strategic management is considered as the process of creating and implementing the major initiatives and goals taken by the top management of the company on the behalf of its owners (Cheng et al.  2014). Therefore, the present study is focused on analysing the effectiveness of the acquisition strategy adopted by Woolworths Holdings Limited during the tome, when Australia was undergoing an earthquake. Hence, the study discusses the different competitive strategies of WHL and David Jones Limited, the company that is acquired by WHL. Moreover, the local and global defensive strategies implemented by WHL are also illustrated at the end of the study.

Analysing the extent to which the acquisition fit to WHL and DJS from their vision mission and core values

WHL is a chain of retail stores in South Africa and one of the biggest retail chains of UK that retails footwear, clothing, groceries, beauty products, accessories, home wear, beauty products and financial services. The mission or aim of the company is to build a leading southern hemisphere. The vision of the company is sustaining the strong value system that is the basis of the brand and is properly integrated into the way of carrying out its business activities. The core value of WHL is sustainability helps the company to build a shared plan and vision for success, maintain, begin change, and accept diversity. The company is committed toward ensuring that the company itself and its suppliers operate in such a way that respects the rights of employees, maintains an effective working environment for them, promotes local employment laws and fulfils corporate social responsibility appropriately. The company believes that the sharing values with business partners helps to increase the overall performance quality and productivity of the company (Financial Mail 2016).

The strategic decision taken by WHL to acquire DJS helped the company to increase its presence worldwide. It enhanced the buying power of the company for competing against the fastest growing fashion retailers such as, H&M, Zara, Topshop, Arcadia Group Plc’s that are expanding their business in both the countries Australia and South Africa. All the companies are inclined toward expanding their business in new locations for increasing their market shares. Hence, Acquisition of DJS helped WHL to expand their business in Australian market, which is the most targeted market of most of the competitors. This acquisition also helped it to fulfil its mission of creating the brand as a leading brand of southern hemisphere (David Jones 2016).

On the other hand, DJS vision is to establish itself as the first destination or choice for style and to provide excellent experience to its customers. The mission of the company is to exp-and their stores in various locations and offer customers the best local and international brands across beauty, fashion and home. The values of the company is to ensure that all the sections of the business is perform together cohesively for delivering customer-centric results to support the plan of its transformation strategy. Due to upheaval of financial condition, the company was running in loss (Santos et al. 2015). The major department store of the company Myer Group withdrew its all-stock that closed the shares of the company. Hence, acquisition of DJS by WHL is also beneficial for them, as it helps the company to overcome the financially difficult situation effectively. Moreover, the combination of DJS and WHL helped DJS to enhance value for its customers, to increase economic condition of the company and to increase the profitability. The acquisition also helped the company to be well equipped in its respective markets (Business Day Live 2016).

Current competitive strategies of WHL and DJS

The current competitive strategy of WHL is to be a low cost provider for increasing its profitability. This strategy is proved as the winning strategy of the company. Implementing the low cost strategy significantly increased the turnover of the company to 11.8% as per the report of June 2016 as compared to the previous year. Although, the company faced difficulties due to the lower availability of its fashion product in the first half of the year; however, the company promptly overcame the difficulty and increased its product availability along with an effective pr5cicing strategy, which increased the total number of customers significantly. However, the problems faced by the company could not affect the market share of WHL in their clothing segment. The operating margin of clothing increased to 16.7% from 15.6%, which is the highest profit margin ever for a SA cash clothing retaili8ng organisation ( 2016).

Moreover, the broad differentiation strategy applied by the company in their fashion and clothing products also provided significant market share and profit margin to the company. It helped the company to expand their business in different locations of Africa (Mason and WRLC 2016).

The current competitive strategy applied by DJS is changing its market niche. The company adopted this divulged strategy for desiring up the fast-increasing $44 billion speciality retail industry relocating its stores, employees and products, as it whips more customers from its key rival Myer and aims 1.3 million latent customers, who are4 interested to have affordable fashion, however; not purchasing at its stores. The new strategies implemented by DJS also include a rehabilitated focus on the Asian consumers. Hence, the company launched an offer of credit cards and loyalty programmes. Apart from that, the company introduced various new staffing models that comprise modernised incentive schemes for allowing sales managers to invest more times in selling and fewer time swamped down  by managerial responsibilities ( 2016). 

Using Porter’s five forces analysing the reasons of acquiring DJS by WHL

With the help of Porter’s five forces analysis the factors led to acquire DJS by WHL can be discussed properly. The threat of substitutes was high for WHL because the company has to face intensive competition from various indirect competitors. Such indirect competitors include specialist grocery-retail stores, convenience stores, and markets of farmers. This would possess considerable threat on for the company in future. Hence, it can be perceived that acquisition of DJS seems profitable for the WHL (Bailey 2016).

Apart from that, competition among the existing competitors is also high for WHL. This is because the lack of differentiation and similar nature of the products and services offered to the customers. Hence, the primary reason of competitive rivalry is depended on the pricing of the products. Moreover, store location and choice of products are other important factors increase the intensity of the market competition. However, the bargaining power of suppliers remains very low for WHL. As, WHL and Coles dominate over 80% of the total market. Therefore, Australian suppliers have very inadequate selection of suppliers to select ( 2016).

On the other hand, bargaining power of buyers is higher due to aggressive market competition. Beside this, the hostile push from ACCC and federal government to decrease the competition barrier and allows new rivals to enter in the market. This increases the choice for customers that increase their bargaining power considerably. This is another important factor motivated the company to acquire DJS. The threat of new entrance for the company is very low (Malinas et al. 2014). Therefore, to remain competitive, the company adopted the acquisition strategy and acquired DJS that helped the company to expand their business in Australian market, which is the target of so many companies. For the acquisition of DJS, WHL received a significant number of competitive advantages. For instance, it  increased the presence of WHL in Australia. Moreover, it increased the purchasing power of WHL in terms of competition with the leading fashion brands of the world. By means of market value, WHL is the second biggest retailer and acquisition of DJS provided the company a chance to expand their brand efficiently in the Southern hemisphere. It also facilitated the company to gain competitive advantage over the entrants of Northern hemisphere ( 2016).

Using SWOT model for analysing the success level of WHL due to the acquisition

With the help of SWOT model the major strengths, weaknesses, potential threats and opportunities of WHL are understood properly. It is found that the key strengths of WHL are its reputation and high sales rate. Moreover, the company is successful in reducing the overall labour cost, which facilitated the company to increase its sales and profit rate. However, the key weakness of the company is the burden of high loans (Klettner et al. 2014).

However, there are some considerable opportunities for the company, which can help them to reduce the loan rate. For instance, introducing new products and services considering the rapidly changing demands of the customers can increase its competitiveness. Apart from that, planning for expanding the business into new locations can be helpful in increasing their brand awareness and profit margin (Bartman 2014).

Nevertheless, the company need to taken under consideration some potential threats that can decrease its overall profit rates. For example, increasing costs of production, increasing cost of labours, tax changes, price changes low cash flow, increasing interest rate, higher level of competition and changing the regulations of governments can appear as vital challenges for the company in coming future. Therefore, acquiring the DJS, which is most prominent and oldest department store of Australia, provided a number of competitive advantages to WHL. Therefore, the company purchased the issued share capital of DJS in $2.15 billion. This acquisition made a perfect combination of business that provided the opportunity to WHL to create a strong southern hemisphere with pro-forma shared FY13Arevenue more than A$5.7 billion. This revenue was earned from 1, 151 stores located in 16 countries generated 43% sale in Australia (Bugeja et al. 2015). Although, WHL has operated productively in Australia for more than 15 years, however, acquisition of DJS helped the company to expand their business in more locations of Australia. This acquisition provided significant competitive advantages to WHL by increasing their visibility, market share, customer acquisition, international sourcing and the capacity of leveraging shared trends and seasonality (Dawson and Mukoyama 2013).

Analysing the international marketing strategies of WHL and the reason for choosing acquisition strategy

The success of WHL is developed on the belief that success lay on offering high quality of services and products to the customers at a competitive and reasonable price. It helps the company to be established as the leading retail chains of South Africa. The strategic intent of the company consider four key areas for successfully operate in national and international market including customers, operations, people and effective business journey. The international marketing strategies of WHL include developing a customer-centric business (Bailey 2014).

A significant portion of business activities of the company is carried out for identifying its potential customers of the company and their demands and expectations form the company. The company has defined a sole business-wide view of the customers considering their needs, mindset, wants as classified by lifestyle segments. The company is focused on collecting information on shopping habits and demographic segmentation of their international customers. The company use this information while developing its merchandise cycle, branding, purchasing, allocation and design decision (AO Dos et al. 2014).

Another international marketing strategy adopted by the company is to establish itself as a brand-value driven business. The company has modernised its branding and for each of its sub-brands. The company provides significant importance on its brand and its value must be understood by the through the company.  In order to inform about their products and services to their key customers, the company carry out loyalty programs, provides drive cards and discount offers to the international customers. Customers feel happy and delighted through having instant saving provided by the company. Moreover, the WReward strategy implemented by the company helps it to enhance the lifetime valued of the consumers, which helps them to gain customers loyalty and rewarding the loyal customers and accumulate information about the future demands of the customers in order to stay competitive within the global marketplace (David and David 2016).

For increasing their brand awareness and expand their business into more locations of Australia, WHL decided to acquire DJS that provided them a number of competitive advantages. The company has the mission of eastabilishing itself as brand that provide greatest value to its customers.  Moreover, it wants to build a strong brand in the southern hemisphere. Therefore, acquiring DJS provided the company the chance to build a strong brand image in the southern hemisphere (Dos Santos et al. 2013). 

Assessing the effectiveness of the timing of applying the acquisition strategy by WHL

WHL decided to acquire DJS in April 2014, when DJS was going through financial downturn. Strategy of WHL is to expand its international business operations for transforming itself into a leading retailer of southern hemisphere. Furthermore, in this time, DJS was facing economic difficulties. Hence, the timing of acquisition is perfect for WHL and DJS both. WHL agreed to provide $4.00 cash to each shareholder that was profitable for DJS and its all shareholders. Therefore, the company agreed to be taken over by WHL. Combining business with DJS, WHL was able to create a substantial business growth in southern hemisphere with 1, 151 stores in 16 countries (Du Plessis and Grobler 2014). 

Before acquiring DJS, WHL Carried out a detailed assessment of the company and identified the profits it can bring to the shareholders of WHL. Due to the timing of acquiring DJS, WHL succeeded to expand their business and fulfil their business goals effectively ( 2016).

The defensive strategies for local and global competitors of WHL

In order to give tough competition to its local competitors like Kmart, Myer and so on, WHL conducts a comprehensive survey for identifying the strategies implemented by the competitors. Based on the information collected through the survey, WHL devise their strategy that can help them in sustaining competitiveness. WHL adopts the strategy of renovating its stores for making them more attractive to the local customers. They consider the tradition and cultural values of the local customers and design clothes and other services accordingly so that it can acquire a competitive position within the marketplace (Merrett 2013).

On the other hand, for competing with the international business rivals like Hennes & Mauritz AB, Inditex and so on, the company mainly focuses on product differentiation and cost leadership strategy. In order to attract the customer base in global market, the company offers products based on the demand of the global customers at a comparatively lower price, which provide the company the attention of a significant number of global customers. It helps to increase the brand resonance and brand value of WHL. Moreover, the product differentiation strategy provides the company a stand out position within the market ( 2016).


It can be concluded that strategic management needs huge focus on the internal and external business environments of an organisation in which it operates for achieving business goals. Here, the WHL adopted the acquisition strategy for achieving its mission. By acquiring the issued share capital of DJS, WHL expanded its business in the southern hemisphere effectively that provided the company lots of competitive advantages. Agreed with the proposal of WHL, DJS also got considerable profit for its business.

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