Based on the 31 December 2019 Annual Report for Woolworths Group Limited (availableon Moodle), prepare a planning memorandum for the audit partner which includes thefollowing:Required:1. Identify four...

Planning memorandum for the audit partner in Woolworths Limited
Four major business risks of Woolworths
The areas where Woolworths can face difficulty while operating are (1) Strategy and competition (2) Customer and marketplace (3) Sustainability (4) Legal, regulatory and governance. These risks can impact the business operations of Woolworths and can cause harm to the profits of the company. Therefore, the Board and the management along with the executive must strategies plans to mitigate the business risks so as to run the company smoothly. Therefore as stated by (Bianchi, 2009) that it is the direction towards knowledge of the company, compatibility with the local market, innovation and sophistication, business partnership strategies and senior and top management suggestion related to the expansion and growth of the business which leads to mitigate the business risks, Woolworths should also follow such steps to alleviate its business risks.
Strategy and competition: The market in which Woolworths operate is full of competition, technology disturbances and disruptions, entrance of new players in the similar segment with larger market capitalization and the ever changing customer tastes, needs and preferences which are causing obstacles in the course of earning profits for Woolworths. On the other hand the environment in which Woolworths operates delivers both risks and opportunities which will impact the business operations and performance of the company as they respond to the changes.
To mitigate the risks Woolworths Board and the management must receive regular updates and data related to the progress of the objectives and should provide information diligently related to the challenges and obstacles on the strategic trend of the business. It is the responsibility of the delivery office and every employees of the organization to provide information of the key initiatives and lapses of the strategy implementation. It is the duty of the group executive committee and the management to evaluate and review with the customers, suppliers, shareholders and the team members of the company on the sales propositions, the present trends in the market, the prices charged on various products by the competitors, innovative marketing activities and promotion strategies. Thus, since the employees and the management long and short term incentives are dependent on improvising and successful implementation of these strategies, thus implementing plans to reduce the strategy and competition risks are extremely important for Woolworths.
Customer and marketplace: The customer in this competitive environment requires getting personalised, associated and convenient customer services. This also requires Woolworths to change themselves and evolve their business models to consistently meet the rising requirement of the customers. The ever-changing and current changes in the customer behaviour requires for a gamut of changes in the retail segment. There has been growing demands for online shopping by the customer in the FY 2020 and onwards and hence the growth of Woolworths remains volatile in the future. Thus as per Childs and Jin (2015), it is the scale of business operations and diverse product categories which helps in the internationalization of the retail business.
To mitigate this risk the group-wide customer data and insights are provided to the group Executive Committee which helps to provide establishing customer experiences and improving the customer experiences on a consistent basis. Regular monitoring and supervision of the customer satisfaction is surveyed through feedback from the stores, online channels, call centers which includes qualitative and quantitative researches. Woolworths should also emphasize on the policy of listen and learn from the customers. The complaints and grievances received from the customers should be regularly delivered to the Board and CEO of the company. This will help Woolworths to analyse the customers’ feedback and provide them with a more improved solution for the customers.
Sustainability: The ultimate aim of Woolworths is to deliver sustainable value to the shareholders along with long term growth. The aim of the company is also to reduce the negative impact on the environment and enhance the reputation of Woolworth as the leading company in Australia. The operations and supply chain of Woolworths is extremely complex and are committed towards managing the supply chain and the employees right. There is also possibility of the business operation may be impacted by the changes in the environment and temperature rise. The business functions of the company are also impacted by the severe weather conditions, changes in government policies and customers’ behaviours, needs and preferences.
To mitigate the risks the Board of Woolworths has provided few strategies for achieving the...