Scenario: Amazon is Disrupting Major Supermarkets
As a major player in the digital business space, Amazon has recently decided to enter into the Australian grocery market to compete with Woolworths and Coles. This is mainly done through a reduction in price to undercut the big supermarket chains. Some key facts and figures are presented below:
• Amazon Australia is now undercutting the dominant supermarket chains by as much as 50 per cent on household staples and quickly capturing a foothold in the market
• 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 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 provide a strategy on how they can prepare and 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 Woolworth’s share price
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
Social media ineptitude: Woolworths are 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 by suppliers
Price: Woolworths are 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
Distribution: Woolworths has more effective distribution channels than Amazon already set-up in Australia but 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
Supplier relationships: Some suppliers are willing to offer Amazon better terms than Woolworths
Brand reputation: Woolworths has noticed that their reputation is decreasing, and Amazon’s is increasing here in Australia
Poor consumer loyalty: Consumer loyalty is difficult to establish in the FMCG market and while Woolworths has a large market share, consumers don’t seem to be particularly loyal
As highlighted above, Woolworths have 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 discuss 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 (their role only…not their 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 to one 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 every solution
• Digital business theory: There is a clear integration of relevant digital business theory in solutions (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:
You have a short word count which means you do not need to include an executive summary, introduction or conclusion. Instead, your focus needs to be on solutions and how you can best present this to Woolworths’ executives.
Assessment 3: Business Analysis Report Marking Rubric (40%)
Performance Indicators
CRITERIA EXCEEDS STANDARD MEETS STANDARD YET TO ACHIEVE MINIMUM STANDARD
High Distinction (HD)/80-100 Excellent/exemplary/exceeding high standard Distinction (D)/ 70-79
Very good/ exceeds expectations Credit (C)/60-69 Good/Well done Pass (P)/ 50-59 Acceptable/Satisfactory/ Proficient Fail (N) /0-49 Poor/unacceptable/Not attempted/requires further development/needs improvement
Outstanding, insightful work. Goes beyond requirements of the task to develop a response, which is thoughtful, reflective and considers alternative views. Student makes connections among ideas and information from different sources or from different aspects of the course. Very good work. Purposefully and logically developed. Thoroughly addresses all aspects of the task. Synthesis of details and concepts from various sources or topics. Student shows evidence of sound understanding and thoughtful examination. Good work. Generally clear, accurate and relevant. Adequately addresses all requirements of the task. Student demonstrates understanding of course concepts, with evidence of some thoughtful examination and reflection. Development is generally logical; facts generally correct but tends to focus on one interpretation. Satisfactory work. Shows basic understanding of concepts with minimal evidence of reflection or thoughtful analysis. Student complies with the basic requirements, relies on limited sources of information, little integration of concepts. Unsatisfactory work. Fails to address the topic in a meaningful way. May be extremely brief, inaccurate, illogical or undeveloped.
Business Analysis Report (100%)
Solution outline innovativeness (25%) The solutions to the problems identified are highly thoughtful and are clearly and specifically stated. The solution is logically linked to the problem and is extremely innovative. The solutions to the problems identified are clearly and specifically stated.
The solution is logically linked to
the problem and is innovative. The solutions to the problems identified are clearly and
specifically stated.
The solution is mostly logically linked to the problem and
is quite innovative. The solutions to the problems identified are not so clearly and specifically stated.
The solution is somewhat logically linked to the problem and is not overly innovative. The solutions to the problems identified are not clearly and specifically stated.
The solution is not logically linked to the problem and is not at all innovative.
Implementation and control (30%) A thorough and specific implementation plan is
clearly identified for every solution. The implementation plan identifies who is responsible for implementing the solution, when it should be implemented, the cost, measurement of effectiveness and any other relevant information in an extremely thoughtful and reflective manner. The implementation plan is specific enough so that the company/organisation has an exact blueprint for using the plan. A specific implementation plan is clearly identified for
every solution. The implementation plan identifies who is responsible for implementing the solution, when it should be implemented, the
cost, measurement of effectiveness and any other relevant information. The implementation plan is specific enough so that
the company/organisation has a blueprint for using the plan. An implementation plan is identified for most of the solutions. The
plan fails to identify who is responsible for implementing
the solution. However, it does identify when it should be implemented, the cost, measurement of effectiveness and any other relevant information. The implementation plan is mostly specific enough so that
the company/organisation has a blueprint for using the plan. An implementation plan is
generally identified for the solutions. The plan fails
to properly identify either who is responsible for implementing
the solution, when it should
be implemented, the
cost, measurement
of effectiveness. The implementation plan is not specific enough so that
the company/organisation has a blueprint for using the plan. An implementation plan is
not identified for the
solutions and
the implementation plan generally, lacks specificity. Because of missing information, the plan will not help the company/organisation implement the plan.
Digital business theory (25%) Extensive knowledge of digital business theory shown. There is a clear integration of relevant digital business theory in solutions Very good knowledge of digital business theory shown. There is a very good attempt at the integration of relevant digital business theory in solutions Good knowledge of digital business theory shown. There is
a somewhat clear integration of relevant digital business theory in solutions Lacking decent knowledge of digital business theory shown. There is an insufficient integration of relevant digital business theory in
solutions, but an attempt has been made No digital business theory included in solution development
References/sourc es of evidence (10%) Demonstrates skilful use of high quality, credible, relevant sources to develop ideas that are appropriate for the development of solutions. Quoted material is identified
with quotation marks and a page number. Correctly uses Harvard referencing for all in-text
citations and reference list containing minimum number of
10 business and
academic references. Demonstrates consistent use of high quality, credible, relevant sources to develop ideas that are appropriate for the development of solutions. Quoted material is identified with quotation marks and a page number.
Correctly uses Harvard referencing for all in-text citations and reference list containing minimum
number of 9 business and
academic references. Demonstrates somewhat
effective use of high quality, credible, relevant sources to develop ideas that are appropriate for
the development of solutions. Quoted material is identified with quotation marks and a page number.
Correctly uses Harvard referencing for all in-text citations and reference list containing minimum
number of 8 business and
academic references. Demonstrates a basic use of relevant sources to develop ideas that are appropriate for the development of solutions. Quoted
material insufficiently identified with quotation marks and a page number. Correctly uses Harvard referencing for all in-text
citations and reference list containing minimum number of 5-7 business and academic references. Demonstrates little attempt to use sources to support ideas in the writing. Quoted material is not identified with
quotation marks and a page number. Inconsistent
or incorrect use of in-text citations and Harvard referencing style containing no or less than five references.
Writing Style (10%) The language is clear and expressive showing a strong writing style and without grammar, punctuation, usage, and spelling errors. Report
is within required word limit of 2000 words. Well written and clearly organized using standard English, characterized by elements of a strong writing style and basically free from grammar, punctuation, usage, and spelling
errors. Report is within required word limit of 2000 words. Above average writing style and logically organized using standard English with minor errors in grammar, punctuation, usage, and
spelling. Report is within required word limit of 2000 words. Average and/or casual writing style that is sometimes unclear and/or with some errors in grammar, punctuation, usage, and spelling. Report is too long or too short. The language is not clear and expressive showing
a weak writing style and too many grammars, punctuation, usage, and spelling errors. Report is too long or too short.
Additional Resources Business Analysis Report:
https://www.supermarketnews.com/issues-trends/survey-amazon-top-threat-disruptor-supermarkets
https://www.bloomberg.com/news/articles/2018-03-19/supermarket-casualties-begin-to-pile-up-in- amazon-fueled-battle
https://www.forbes.com/sites/christopherwalton/2018/08/03/in-the-era-of-alibaba-and-new-retail- amazon-go-may-have-a-fatal-flaw-that-limits-its-potential/#541a8c7824f0
http://fortune.com/longform/amazon-groceries-fortune-500/ https://www.marketingmag.com.au/news-c/news-amazon-grocery-pantry-australia/
https://www.news.com.au/finance/business/retail/how-big-an-impact-will-amazon-have-on-australia- maybe-we-should-look-at-what-happened-in-canada-rather-than-the-us/news- story/d546b7a0979f169f9b8160a7f549be0f
https://www.geekwire.com/2016/amazon-go-works-technology-behind-online-retailers- groundbreaking-new-grocery-store/
https://www.woolworths.com.au/shop/discover/shopping-online https://shop.coles.com.au https://www.amazon.com.au/b?ie=UTF8&node=5547635051
