Woolworths Sustainability

Sustainability Issues

Sustainable development seeks to balance social, economic and environmental objectives in order to secure the well-being of present and future generations. These objectives are interdependent and thus equally important. Finding the optimum balance means that difficult choices sometimes have to be made and concessions may be required.

In a practical situation it is useful, in fact necessary, to have a working definition of sustainability. Simple definitions set a point of reference for a mixed audience. Definitions should be simple and practical and must be comprehensible to all individuals, whatever their background.

People will have heard the word “sustainability “which was most likely mis-quoted. There will be a vague recognition, but general lack of understanding as to what it means. Because the concept is vague, there will probably be a perception that it is something complicated and beyond the scope of a local community, but a simple working definition can bring sustainability into focus for a community.

The definition can be broadened, adapted, or abandoned as work progresses. The usual case is that, as understanding grows, there is no longer any need for a definition. As a project progresses and practical action gathers momentum, “sustainability” becomes a household word, a way of thinking and a way of living. However, it is useful to have a short definition at hand for newcomers to a project, or for a community to articulate to others what they are doing.

It is easy to offer definitions of sustainability, but it is advisable to avoid spending too much time determining their phraseology. Many community meetings devote time to refining definitions, even after the concept has been adopted. In a working context it is the understanding that is important and once this has been achieved, the definition becomes less important.

Climate Change

While it is quite obvious that the climate does in fact change, a consensus on the effects of such change have led those at Woolworths to become concerned with this issue. Regardless of the general confusion on this topic, this organization has decided to act, at least politically to help combat the mystery that is climate change. According to their Sustainability Strategy, Woolworths ” number of regulatory and political factors are also shaping the climate change landscape including requirements for public disclosure of emissions, the implementation of an Australian Emissions Trading Scheme and increased public awareness following the Stern Report.”(Strategic Report, 2013)

As a result, carbon emissions should be reduced as much as possible to minimize the carbon footprint that such a large organization can produce. Efficient use of resources must become part of the attitude throughout the entire corporation, and these values must ring true. This requires a change in mentality as well as altering practices that have typically relied on more convenient, yet extremely inefficient and wasteful methods.

Certain targets have been set and need to be accomplished to help set a solid reputation for achieving sustainable practices. This includes reducing carbon dioxide emissions by nearly 40% by the year 2015. Using new practices such as remodeling vehicles to become more efficient, reducing miles traveled or using alternative fuels, Woolworths can meet these objectives and become more dedicated to sustainable practices.

Water

Even though most of the world is covered in water and most habitable lands are laced with streams and river, water is somehow a coveted and threatened resource. In places such as Australia, where fresh water is more rare, this challenge of preserving water must be met by the collective including companies such as Woolworths. This company must develop a more complete baseline of water usage in order to meet their goal of reducing their water usage by up to 200 million liters.

Packaging and Waste

Woolworths is heavily intertwined with the packaging that accompanies most or the products they sell in the store. Not only are the end products packaged, but in many instances the crates upon which these goods were transported also use substantial packaging. This causes much waste both in time and resources (Dowes 2012).

In order to become more sustainable, Woolworths needs to address this issue and become more streamlined and precise in understanding what packaging needs they should adopt (Dowse, 2012). This also needs to apply to Woolworths many suppliers who deliver their goods to distribution points where more packaging is usually applied as these goods are distributed to all of their different stores.

According to its Strategic Guide, Woolworths ” aims to eliminate organic waste from our general waste stream by 2015 subject to availability of appropriate facilities “(Strategic Report, 2013). The different types of waste that Woolworths produces also causes unique challenges in their attempts to become more sustainable. Separating garbage and waste must be performed in order to meet their goals in their new plan to eliminate inefficient methods. In addition to organic waste and packaging other types of waste such as electronic waste and plastic trash are also targets for elimination in this strategic approach.

Store Development

The stores in which Woolworths performs business are also under renovation to help in maintaining sustainable practices that this company has adopted. This is an important move because it demonstrates up front and in the open the leadership necessary to convince the public that sustainable practices are being used and followed.

A “green” store for Woolworths should conserve energy to the greatest possible extent. Alterations to lighting systems as well as heating and cooling systems is necessary to help become more efficient and quit wasting fossil fuels (Iles 2007). Using natural gas, minimizing water use, reducing waste and elimination of harmful materials are a tactics that must be used if stores are expected to become “green” and hence more sustainable.

Values

Woolworths is a company that presents value and has values. It is very important to distinguish between these two uses of the word in order to propose and execute a solid and practical sustainability program that reflects these ideals. Value is a general term that represents the acquisition of either time or money. Something is valuable if it makes your life better, easier or both. Values are principles and ethics. When the word is used in this fashion it represents a greater good and something that transcends money and competition. The greater good is reflected in an organization’s or person’s values.

According to their own reports, (Woolworths’ Sustainability Strategy 2007-2015) the company’s values are laid out to demonstrate where this company places its values upon. This booklet outlined the company’s values written as priority issues. These include:

“Climate change, direct use of water, better packaging, waste management and more eco friendly design.”

Contained within these priorities are the values that Woolworth takes to heart and wishes to correct, be it politically correct or not.

Steps to Designing a Successful Sustainability Program

There is an obvious schism between value and the corporate values that Woolworth wishes to impact on the environment. This is the problem in designing a corporate strategy that includes acting in accordance with sustainable practices. Ironically, the forces that drive competition and the capitalistic markets are at direct odds with sustainable practices. Woolworth is especially vulnerable to this problem as its business market deals with selling almost exclusively non-reusable products.

Leadership at Woolworth must restrict their impulses to milk every dollar and cent out of every process and begin to look at the bigger picture. The retail industry in which this organization was built upon, also was built upon a scorched earth policy that treats consumption as a holy act. Consumption is a threat to sustainable practices and this must be remedied if Woolworth wishes to maintain its competitive advantage and remain a force within the industry and maintain its high profit margins that it has enjoyed over the course of its fruitful existence.

SWOT Analysis

There are many business tools that can help strategic planners with their task of developing sustainable practices that are both lawful and help contribute to the competitive advantage of the firm. A SWOT analysis is one of these tools that helps identify key components of any corporate action or plan. This analysis examines the strengths, weaknesses, opportunities and threats that apply to Woolworth and their business operations that are attempting to become more sustainable.

Strengths

The first step in doing a SWOT analysis for retail requires identifying certain strengths that Woolworth holds. One possible strength may be the organizations’ financial backing. meaning it has plenty of capital and access to bank loans. Another strength may be the retailer’s cheaper wholesale prices. Additionally, the retail company may offer unique products compared to other retailers. For example, a clothing store may sell high quality but slightly defective clothing at a low price. Whatever the case, a retailer should make a list of all its strengths vs. key competitors.

Weaknesses

When reporting weaknesses, Woolworths should start with its most blatant weaknesses and faults. Woolworths’ weaknesses are exposed when any of its major brands that it sells becomes vulnerable or at risk for losses. Another weakness is Woolworths tendency to become invisible and lose an identity. As the organization attempts to sell cheap and expensive brands an exact identity may not be apparent and disillusion many customers that don’t know what to expect. As mentioned before, the retail industry is squarely opposed to sustainable practices and this in itself is a blaring weakness that needs to be addressed if the company expects to be successful in the long-term.

Opportunities

Another step in a retail SWOT analysis is identifying key opportunities in the market.

In this case, the demand for sustainable practices are at an all time high. If Woolworths can somehow master this transition, the opportunity for domination within this industry is possible. Introducing new technologies that promote sustainable practices will surely help in exploiting many of these opportunities.

Threats

The internet and wireless shopping has provided many new threats to the retail industry. This threat is more serious because online shopping appears to be more sustainable than taking a car out to the store to make the purchase. Woolworths must emphasis the importance of shopping in person and making this practice somehow more sustainable. Another threat to Woolworths includes the general economic condition of the country and the world . Unstable currency markets threatens not only the local economy but also many of Woolworths’ suppliers that are also trying to make their business more sustainable.

References

Dowse, J. (2012) a view on Woolworths’ corporate responsibility report, the Sustainability Report: Integrating ESG for Risk and Return at http://www.thesustainabilityreport.com.au/a-view-on-woolworths-corporate- responsibility-report/3137/: Accessed 10 May, 2013

Dwivedi, a., Merrilees, B., Miller, D. And Hemington, C. (2012) Brand Value and relationship equities and loyalty intentions in the Australian Supermarket Industry, Journal of Retailing and Consumer Services, Vol.19, Iss.5, pp.526-536

Hampl, N. And Loock, M. (2013) Sustainable Development in Retailing: What is the Impact on Store Choice?, Business Strategy and Environment, Vol.22, pp.202-216

Iles, a. (2007) Seeing Sustainability in Business Operations: U.S. And British Food Retailer Experiments with Accountability, Business Strategy and the Environment, Vol.16, pp.290-301

Woolworths (2013) Sustainability at http://woolworths.com.au/wps/wcm/connect/Website/Woolworths/About+Us/Our+Planet / Sustainability/; Accessed 10 May, 2013

Woolworths (2007) Doing the right thing: Sustainability Strategy 2007-2015, at http://www.woolworthslimited.com.au/icms_docs/130514_Doing_the_Right_Thing.pdf: Accessed 15 May, 2013