Woolworths Limited's climate and topography impacts on Australian and Norwegian operations

Woolworth's

Climate & Topology Analysis Woolworth Limited - Australia (home country) - Host Country: Norway 1) Does climate affect factor conditions natural resource availability

Climate & topology analysis for Woolworths Limited:

Australia (home country); Norway (host country)

As a supermarket, Woolworths Limited is continually facing the challenges posed by the availability of natural resources. A cool season can prevent a crop from properly flourishing; the price of petrol can cause transportation costs to escalate. High fuel costs, because they have such a spiraling impact upon all aspects of the transportation of consumer goods, such as imported produce, can be particularly damaging, given the extent to which this can increase the costs of goods and services. This does not only hurt the average Australian consumer, but also can negatively impact Australia's food exports, causing them to rise in price due to transportation costs.

In Australia, climate may have more of an impact upon the economy than other nations. "Australia's 50 largest food and beverage corporations produce almost three-quarters of the domestic industry's revenue. Supermarkets and grocery outlets continue to capture the majority of food sales in Australia, with around 60 per cent of the value of total food and liquor retailing in 2006 -- 07" (Food, 2011, About Australia). Food exports have been a mainstay of the Australian economy until recently, and if droughts continue, this could impact the economy and the availability of capital. "Food exports reached a peak of $30.8 billion (2006 -- 07 dollars) in 2001 -- 02 and have been declining since, largely due to drought and changes in import demand from overseas markets" (Food, 2011, About Australia).

Australia is noted for its fine seafood, and also the influence of the Pacific Rim upon its food tastes. While the warmth of Australia has fostered an 'outdoorsy' culture, in the proposed host nation of Denmark, the nation's relatively temperate climate has likewise created a culture where awareness of the environmental impact of raising food is important to consumers (Weather in Denmark, 2011, Go Scandinavia).

Question 3

Woolworths Limited must constantly struggle with Australia's climate, including the nation's frequent droughts and also natural disasters. Many rural areas are often ill-served by conventional supermarkets. Due to concerns about global warming, Australian consumers express a strong interest in environmentally-friendly products and are some of the world's most enthusiastic consumers of organic foods. Despite Australia's strong food production, competition between Woolworth's and its rival Coles has driven down the price of milk, potentially hurting the dairy industry: "While giant retailers Coles and Woolworths are in the middle of a bout to lure more customers, their pricing tiff forced the slashing of milk price to as low as $1 per litre but dairy farmers were not amused. The dairy industry claims that while the rivalry between giant retailers are delivering benefits to consumers through lower prices of dairy products such as milk and butter, they argued that over the long haul and as the industry started absorbing losses from lower revenues, many producers would eventually fold up, cut short the supply and send up the prices" (Roxas 2011). This could have a negative impact upon the Australian economy as a whole, given the continuing importance of farming and food exporting for the nation.