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Business Strategy Assignment: Woolworths Artificial Intelligence And Innovation Strategy


Assessment Overview: This assessment must be completed by students individually. The assessment is designed for students to develop understanding of the close links between the business environment, business innovation strategy, business capabilities and business value creation. The assessment involves writing a 2000 word innovation strategy report in response to a real case.

Please note that academic misconduct and late submission penalties will apply to this assessment as per the university policies.

Assessment Context: Generally, innovation initiatives within a parent firm are driven by an innovation strategy. An innovation strategy is a subset of firm’s overall strategy. The innovation strategy describes the future development a firm’s innovation capabilities and the future direction of its innovation activities. A firm’s innovation strategy does not exist in a vacuum, it responds to a specific set of circumstances including innovation trends and provides an important context; direction; guidance; monitoring and facilitation of an organisation’s innovation initiatives. Thus, firms take care to diagnose the firm’s circumstances including innovation trends to inform the design and development of its innovation strategy.

Select one of the following firms (or organisations):

  • Apple (electronic device manufacturer).
  • CQUniversity (university education provider).
  • Facebook (social media provider).
  • Strava (social fitness application provider).
  • Lego (toy manufacturer).
  • Tesla (automotive manufacturer).
  • Australian State Health (select a health care provider in Australia).
  • Woolworths (retail supermarket chain).
  • A firm or organisation that you are or have been employed at and therefore know well. It is important that no confidential information is included in the submitted report.
  • If you suggest a firm or organisation other than the ones above, you will need approval from your assigned lecturer.

Select one of the following innovation trends:

  • Artificial intelligence (Davenport & Ronanki, 2018; FiveFifty, 2018; McKinseyGlobalInstitute, 2018).
  • Augmented reality (Porter & Heppelmann, 2017).
  • Robotic automation (Tilley, 2017).

Ideally, your selected innovation trend is important to the selected firm or organisation as that makes the innovation strategy report important to its senior executives, the report interesting to read and the report writing exciting.

Assessment Tasks: You are required to write a 2000 word innovation strategy report to the board of your selected organisation. Your innovation strategy report must:

  1. Succinctly introduce the selected organisation and selected innovation trend.
  2. Succinctly define the following concepts and their relationships: the organisational environment, innovation trend, innovation strategy, innovation capabilities, innovation value creation and capture.
  3. Succinctly describe how the creation of an innovation strategy ensures strategic alignment within organisations and why it is important.
  4. Analyse the impact of the selected innovation trend on the selected organisation. You should apply at least one strategy tools to analyse the impact, opportunities and threats to the organisation.
  5. Recommend how the organisation’s innovation strategy best responds to the innovation trend by answering the following questions.
    • How should the organisation organise its innovation activities?
    • What additional innovation capabilities should the organisation develop?
    • What innovation initiatives should it pursue?
    • How should the organisation ensure that it creates and captures value from the innovation?
  6. Recommend how the organisation best ensures strategic alignment to address the innovation trend.


Executive Summary
This business strategy assignment tries to exemplify that an innovation imitative of a firm is driven by the approach of it towards the innovative strategy. The innovative assignment on business strategy has been developed as result of a need of bringing in improvisations and innovation in a company services or products to maintain viability and sustainability. In context to this the impact of an innovative trend is studied in an organisational aspect .

This business strategy assignment focuses on how the concept of innovation has developed as one of the key success factor for most of the organisations in their respective industrial sector. The understated report explores the closer association between business environment, business innovation strategy, business capabilities and business value creation. An analysis would be conducted in concern to the impact of innovative trends in a parent organisation, which is driven by its innovative strategy.

Overview of the selected organisation and the selected innovation trends
Woolworths Supermarkets is a leading retail giant of the nation of Australia. Operating under the retail industry of Australia the company specialises in selling products ranging from groceries, magazines, health and beauty products, household products etc. The supermarket giant functions with more than 111,000 employees and has an effective management system that has the ability to help the firm in maintaining both its viability and competitive edge in Australia's retail sector. With an annual revenue amount of $42158 billion, the firm tries to provide its target customers with their required products along with an innovative experience. The retail company over the years has made efforts to follow the changing dynamics of the retail sector and trends that influence the industrial sector the most (, 2018).

Artificial Intelligence in the recent few years has been observed to demonstrate an exponential growth mostly by capitalizing upon the range of innovative areas such as development in computer science, operational research, nanotechnology etc. The growing market size of the Artificial Intelligence and the kind of opportunities it tends to provide has made Woolworth like retail organisation to pay serious attention towards it. The business strategy assignment highlight how Artificial Intelligence provides innovative value to the customers by its new methods and technological aspects, which eventually has taken up by the retail sector as a advantageous innovative business opportunity (Pantano, 2014).

Relationships between the concepts:The organisational environment of a firm (in this case Woolworths) plays a major role in concern to the kind of approach that is made in context to any kind of innovation trend (Artificial Intelligence in this case). With a constructive and opportunistic business environment, a firm could make a positive approach towards the innovative trends that could be adopted by the firm as its innovative strategy. An agile business environment has the ability to adapt to the changes effectively without any such issue. That is a firm is able to develop its innovative capabilities or make improvisations in its innovative functions to inculcate into an effective innovation strategy. The incorporation of the innovative strategy in a firm could only be possible if the organisational environment of the firm borne certain innovative abilities. A failure in doing so would results in the inability to create innovative value creation among its major customers. Therefore, for an innovation value capture it is important that an organisational environment comprehends the current innovation trends and based upon that an innovation strategy is developed that precisely indicates the firm the kind of innovative capabilities is presently required. Only by these stated systematic procedures the firm would be able to create innovative value in its products or services (Pantano, Priporas, Sorace & Iazzolino, 2017)

Strategic Alignment of Innovation Strategy within organisation and its significance: The business strategy assignment explores the introduction and adaptation to any new strategy (Innovation strategy in this case) its alignment with the organisation is significant important. Since without the support of the organisation in both external and internal aspects the firm, would not be able to execute the strategy in an effective manner. Therefore in concern to this the innovation strategy of artificial intelligence ensures that it has strategically aligned itself within the organisation of Woolworths by the management of the firm and by range of other vital procedures as well. The very first being the implementation of an open communication channel within the organisational structure. Therefore, with this communication, aspect the innovation strategy could be easily aligned within the organisation as every organisational members of the said retail organisation would be well aware of the need of such strategic implementation and the kind of capabilities and approach that needs to be maintained for it. In addition to this by the development of strategy maps and trees, the innovation strategy of artificial intelligence could be visualised by keeping a handle on the integrity of the links between organisation’s vision and innovative strategic objectives. By the development of this innovation strategy trees would help in laying out the aspect which is actually being trying to achieved by this adaptation (Shankara, Mahanta, Arora & Srinivasamurthy, 2015)

Evaluation of the impact of innovation trend on organisation: In order to analyse the kind of impact innovation trend of artificial intelligence would have on the supermarket giant Woolworths the business strategy assignment uses SWOT analysis as a strategy tool has been done. With the application of this strategy tool the major impact, opportunities and threats that are related to artificial intelligence in respect to the specified retail organisation of Australia would be evaluated. The SWOT analysis is as follows:


  • Easy product search from websites
  • Resolving issues related to logistics and delivery of products
  • Optimization in the Customer's Transactions
  • Up gradation in the Security of online websites

The above stated are some of the greatest strengths that associated with artificial intelligence which would significantly have a positive impact on Woolworth’s practices related to customer satisfaction along with bringing improvements in the revenue generating aspects of Woolworths (Davenport & Ronanki, 2018).


  • Affects customers online retail experience due to large number of product alternatives in the same segment
  • Alignment of search engines with the customer’s preferences

Along with the beneficial aspects, there are certain negative impacts of artificial intelligence as well. The above stated are some of the key factors that could affects the Woolworths’s customer value creation through this innovative strategy (Eyre, Vahabzadeh, Abbott, Cook & Berk, 2018)


  • Competitive Advantage
  • Innovative Customer experience
  • Improvisation in the employee recruitment techniques

In concern to opportunities the artificial intelligence is one of those innovative trends that has the ability to provide Woolworths the opportunity to attain a competitive edge over others owing to the kind of innovative value it would render to its customers through its diverse aspects such as online search engines, transaction etc. Moreover, it provides the retail organisation the opportunity to enhance its revenue rates by recruiting employees by this innovative trends and pre programmed metrics (Ashwood, 2014).


  • Technical Malware
  • Security threats

The above two are some of the major threats of the selected innovative trends that could have a negative impact on the organisation of Woolworths.

Organisation's response to the innovative strategy
Organising innovation activities: Woolworths for organising its innovative activities in respect to the innovation trend of artificial intelligences requires making a formative approach towards internal and external research and development, attaining a comprehensive knowledge regarding the provisions of artificial intelligence to improve the operational functioning of said organisation. In addition to this procurement from external expertise and the training for the innovative activities are some of the initiatives that are required to be taken by the management of the giant supermarket chain in order to organise the innovative activities. The described ways would help the management of the Woolworths to make systematic response towards the identified innovative trend.

Understanding the significant importance of organising the innovative activities for adapting to an innovation strategy like artificial intelligence the management of the said retail firm organised the innovative activities owing to the kind of approach that had been made by the organisational environment of the said retail organisation (Dirican, 2015).

Development of Innovation capabilities: After making an effective response towards organisation of the innovative activities related to the innovation trend it is equivalently important to demonstrate the manner in which the organisation of Woolworths needs to develop itself in respect to its innovative capabilities and values. Since ultimately it is based on the innovative capabilities of the firm, a positive action plan could be made in concern to the innovative trend of artificial intelligence. The very first innovative capability that are required to be attained by the firm was regarding the skills related to reconfiguration of the Woolworths online metrics to facilitate the procedure of merging of the artificial intelligence based resources with it. Investment scaling is another significant innovative capability that requires to be attained by the firm for the execution of the effective artificial intelligence in the major operational business process of the firm. Lastly attaining an integrated knowledge regarding the cloud-based services is another additional capability that needs to be pursued by the organisation of Woolworths on a large scale (Pinto, Soares & Brazdil, 2015)

Pursing of innovation initiatives: Among the above the business strategy assignment states innovative initiatives that require to be organised by a firm like Woolworths in order to make progressive response towards innovative trend like artificial intelligence. The major innovation activity that requires to be pursued by the said supermarket giant is regarding the external and internal research and development. As it is based on this analysis, the firm would be able to understand the kind of implementation strategy that requires to be undertaken for the artificial intelligence. In addition to this the firm needs to implement into training for pursuing the innovation activities as the training would help the employees of the firm understand the kind of innovative activities that would lead to inculcating into innovation in to the retail industry. For the effective pursuing of the innovative activities, it is important that the firm even undertakes an evaluation of its IT infrastructure in order to understand whether the IT framework of the company would be able to support the innovative activities or not (Pantano & Gandini, 2018).

Creation and achievement of value from innovation: Creating and capturing of value from a strategic innovation is an essential requirement in concern to an organisation's strategic implementation procedure. Therefore, in concern to the artificial intelligence like innovative trends the management of Woolworths would ensure that the innovative trend is able to develop value by undertaking a critical evaluation of the major pros and cons of the innovative trends. As this assessment would help in understanding the extent to which the artificial intelligence would benefit the business activities of the supermarket giant of Australia and would provide its customer an innovative valuable service experience. The supermarket retail company would ensure that by the selected innovative trend the company is able to provide its customers a flexible approach towards purchasing retail items from the firm. This would thereby help in providing customer satisfaction which would eventually lead to value creation (Pantano, Priporas, Sorace & Iazzolino, 2017).

Woolworths address the innovation trend successfully by making its strategic alignment with the organisation’s major aspects in a well-integrated manner. However, upon following the stated recommendations would ensure effective strategic alignment of the said trend. The recommendation is as follows:

  • Development of organisational culture that fosters innovative trends is one of the most crucial factor that would help the supermarket firm to support the innovative trend of artificial intelligence
  • Formulation of an organisation framework that supports the clear implementation procedure of the artificial intelligence
  • Making investments in its employees regarding the training aspects for making proper actions for the inclusion of any kind change (Innovative trends as change in this case) would help the firm to address the need of the innovative trend of artificial intelligence and would ensure its strategic alignment within the firm's management system
  • Lastly the management of Woolworths by taking effective initiatives regarding managing performance would help the firm to comprehend the innovative aspects in a more constructive manner and would thereby support the effective alignment of it with the organisation’s major strategies

In the light of the above stated discussion, it could be depicted that in this very age of 21st century there are a number market trends that affects the business activities of an organisation. Owing to this the selected innovative trend has shown an influential impact on most of the organisations. The business strategy assignment has effectively tried to illustrate the varying aspects of innovative trends such as artificial intelligence positively affects the supermarket giant like Woolworths and the manner in which it should respond to such innovative trend. The business strategy assignment suggests that for Woolworths in order to attain benefits from the stated innovative trends it is important that it attain the ability to establish an effective alignment of it within its management system .

{{metaController.metaData.title}}. (2018). Retrieved from Ashwood, A. J. (2014). Portfolio selection using artificial intelligence (Doctoral dissertation, Queensland University of Technology).

Davenport, T. H., & Ronanki, R. (2018). Artificial Intelligence for the Real World. Harvard Business Review, 96(1), 108-116.

Dirican, C. (2015). The impacts of robotics, artificial intelligence on business and economics. Procedia-Social and Behavioral Sciences, 195, 564-573.

Eyre, H. A., Vahabzadeh, A., Abbott, R., Cook, I. A., & Berk, M. (2018). The Future of Psychiatry Commission. The Lancet Psychiatry, 5(1), 13.

Pantano, E. (2014). Innovation drivers in retail industry. International Journal of Information Management, 34(3), 344-350.

Pantano, E., Priporas, C. V., Sorace, S., & Iazzolino, G. (2017). Does innovation-orientation lead to retail industry growth? Empirical evidence from patent analysis. Journal of Retailing and Consumer Services, 34, 88-94.

Pinto, F., Soares, C., & Brazdil, P. (2015). Combining regression models and metaheuristics to optimize space allocation in the retail industry. Intelligent Data Analysis, 19(s1), S149-S162.

Shankara, P., Mahanta, P., Arora, E., & Srinivasamurthy, G. (2015, October). Impact of Internet of Things in the Retail Industry. In OTM Confederated International Conferences" On the Move to Meaningful Internet Systems" (pp. 61-65). Springer, Cham.


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