Procedure Used To Gather Information Finance Essay

The study describes an probe into the public presentation of Woolworths Holdings Limited in relation to the South African economic system. It considers how alterations in the economic system of South Africa with respects to GDP, CPIX, Interest rates and employment figures, have an impact on Woolworths.

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Background to probe

As concern pupils it is critical for us to be able to analyze a company ‘s public presentation in relation to alterations in the remainder of the economic system. This is a critical accomplishment since companies do non be in isolation and factors in the economic system have an impact on the operations of a company. It is of import to cognize what these impacts could be since we may shortly happen ourselves in places where we are required to do determinations for companies in relation to economic factors in the state.

Aims

The aims of the study are to:

Investigate the alterations in the South African economic system with a focal point of GDP ; CPIX ; Interest rates and employment figures over the last five old ages.

Analyse Woolworths with respects to its history and current operations further to show and explicate the vision ; mission and ends of the company.

Investigate and depict the fiscal and general public presentation of the company by specifying ; exposing and construing the tendencies of: net income ; net income border ; market portion and public dealingss over the last five old ages.

Draw decisions of the public presentation of Woolworths in the context of the company ‘s mission statement, vision and company ends and the South African economic system.

Procedure used to garner information

The information used to roll up this study was gathered through:

Website use of Business Day and other online beginnings

Textbooks for definitions

Diaries

Analysis of one-year studies of Woolworths Holdings Limited from 2007 to 2011

Scope and Restrictions

The probe we made was limited to information we had available online, in the TSiBA library, in text editions and published figures in Woolworths ‘ company studies.

There were a figure of figures that could non be obtained.

Time restrictions were besides faced since we have a figure of other deadlines to run into and exams get down on the 28th of May 2012.

Plan of development

The study begins by saying the consequences of our probe and depicting the South African economic system. This will be by sing for cardinal economic variables GDP ; CPIX ; Interest rates and employment figures over the last five old ages.

Then Woolworths Holdings Limited ‘s history and present operations will be mentioned followed by exposing and depicting their vision, mission statement and company ends.

The public presentation of Woolworths will so be considered by analyzing their net incomes, net income borders, market portion and public dealingss over the last five old ages.

Lastly decisions will be drawn on the public presentation of Woolworths Holdings limited in the context of their mission statement, vision and company ends and the South African economic system.

Tendency OF THE SOUTH AFRICAN ECONOMY OVER THE LAST FIVE Old ages

GDP

Definition of GDP

Harmonizing to Frank and Bernanke ( 2001 ) GDP – Gross Domestic Product – is the most normally used measuring of economic activity. Its purpose is to mensurate the entire production of an economic system in a given period. A more precise definition of GDP is “ the market value of concluding goods and services produced in a state in a given period ” ( Frank & A ; Bernanke, 2001 ) .

Importance of GDP

It gives a clear step of how the state is executing economically. It is of import for the authorities to cognize these figures and alterations so that they can use policies where necessary to prolong economic growing. Keeping positive economic growing is one of the major aims of macroeconomic policies in many developing states ( Mostert, et al. , 2008 ) .

Tendencies 2007 – 2011 of GDP In South Africa

The undermentioned graph indicates the tendencies in the GDP one-year growing rate over the last five old ages in South Africa.

Graph 2 GDP Annual growing rate ( www.tradingeconomics.com )

There has been a lessening on the GDP in 2007 to 2010 of 7.3 % . From 2010 to 2011 the GDP growing rate increased by 3.6 % .

Interest Ratess

2.2.1 Definition of Interest Ratess

An involvement rate is charged or paid for the usage of money. The involvement rate is frequently expressed as an one-year per centum of the chief sum. It is calculated by spliting the sum of involvement by the sum of the principal. This index frequently changes as a consequence of rising prices and South African modesty bank policies ( Mohr & A ; Fourie, 2004 ) .

Importance of Interest Ratess

The involvement rate is one of the most of import variables of the economic system, the South African modesty bank and the authorities ( National Treasury ) keep close expression at this variable and do many determinations based on it. The two authorization organic structures adjust the involvement rate for policy fashioning. These policies are frequently called pecuniary policies ( Mohr & A ; Fourie, 2004 ) .

Tendencies 2007 – 2011 of Interest Rates in South Africa

The graph below indicates the alterations in the involvement rate over the last five old ages in South Africa.

Graph 3 Interest Ratess in South Africa 2007 – 2011 ( www.tradingeconomics.com )

The involvement rate displayed is the repo rate – the rate at which Bankss lend money from the South African Reserve Bank. There was an addition in 2007 to 2008 of 3.3 % where it reached its extremum for the period. In 2009 involvement rates decreased by 4.8 % . In the 2009 to 2011 period there was a diminution in involvement rates of 7 % .

CPIX

2.3.1 Definition of CPIX

CPIX [ consumer monetary value index ] is an index of the monetary values representative ; it measures a basket of consumer goods and services. The CPIX therefore represents the cost of the “ Shopping basket ” of goods and services of a typical norm South African family except for Mortgage and involvement rate ( Mohr & A ; Fourie, 2004 ) .

Importance of CPIX

The CPIX is a really of import tool to the South African economic system as the authorities uses it to cipher the rising prices rate. Keeping rising prices depression is one of the major macroeconomic aims of the state. So it is critical to maintain it under control, and this can non be achieved without the CPIX. The other most of import thing about the CPIX is to mensurate the cost of populating amongst the families in the state to see if it ‘s worsening or tending, this helps the governments and policy shapers to do determinations ( Mohr & A ; Fourie, 2004 ) .

Tendencies 2007 – 2011 of CPIX in South Arica

The graph below illustrates the alterations in CPIX for 2007 to 2011 in South Africa.

Graph 4 CPIX in South Africa 2007 – 2011 ( www.answers.com, 2012 )

The graph above shows the CPIX impetus over the last five old ages. In 2007 it was sitting at 6.5 % and increased to 11.3 % in 2008. For 2008 to 2010 it dropped to -4.3 % and it was stable boulder clay 2011. Since 2011 to day of the month at that place has been an addition to 5.7 % .

Employment Figures

Definition of Employment Figures

Employment i.e. labour force [ people who are able and willing to work ] is derived as part of the population of a state that supplies labour for goods and services. This is the step of people who are employed at the specific period i.e. a twelvemonth, hebdomad, month etc. ( Mohr & A ; Fourie, 2004 ) .

Importance of Employment Figures

It is foremost of import since “ full employment ” is a major aim of macroeconomics of state. It is besides of import for the growing of the economic system and income to the National authorities. It ‘s of import for policy shapers and in determination devising in the economic system ( Mohr & A ; Fourie, 2004 ) .

Tendencies 2007 – 2011 of Employment Figures in South Africa

Graph 5 Employment Figures in South Africa 2007 – 2011

( www.tradingeconomics.com, 2012 ) The undermentioned graph illustrates the tendencies in employment for the 2007 to 2011 period.

The graph above is the looks of the tendency of Employment figures [ employed labour force ] in South Africa for the last five old ages. For the 2007-2008 periods there was a decline in employment of 1.95 % . The Numberss started turning in 2009 to 75.8 % . In the last two old ages it was 74.7 and 74.37 for 2010 and 2011 severally.

3. WOOLWORTHS HOLDINGS LIMITED

3.1 History of Woolworths retentions limited

The retail shop Woolworths was originally found by Max Sonnenberg in the twelvemonth 1931. The first Woolworths concatenation shop opened its doors in Cape Town 31st October. Harmonizing to Woolworths, they have built on a great repute to provide their clients with great quality in apparels and first-class value.A Over the past 80 old ages, their focal point on quality has resulted in WHL to open more shops in South Africa ( www.fastmoving.co.za, 2012 ) .A

To convenience all their clients, Woolworths were the first South African retail merchant to present “ sell by ” day of the months. Max Sonnenberg has believed that in order for their company to go successful they would hold to provide their clients with superior quality and sensible monetary values on all their merchandises ( www.fastmoving.co.za, 2012 ) .A

3.2 Present Operationss of Woolworths retentions limited

Today Woolworths is classified as a retail shop and has extended through franchise partnerships throughout Africa, the Middle East and Australia. They now trade in over 400 different shops ( www.woolworthsholdings.co.za, 2012 ) .

The company is now known as Woolworths Holdings Limited ( WHL ) and is an investing company. It is listed as one of the top 100 companies on the Johannesburg Security Exchange ( JSE ) . Woolworth ‘s chief focal point is to supply fiscal and retail services to all its clients around the universe ( www.woolworths.co.za, 2012 ) .

Woolworths Holdings Limited trades under two chief names Woolworths ( Pty ) Ltd and Country Road Ltd. “ It offers a scope of quality apparels, nutrient, place ware, cooking utensil, beauty merchandises and they besides offer fiscal services ” ( www.woolworthsholdings.co.za, 2012 ) .

“ Country Road Limited is an Australian based house that offers place ware in the retail shops, it is besides listed on the Australian stock exchange ” ( www.woolworthsholdings.co.za, 2012 ) .

3.3 Description of Woolworths retentions limited

3.3.1 Mission Statement of Woolworths retentions limited

This is Woolworths Holdings Limited ‘s mission statement as found on the company web site: “ We, as passionate committed retail merchants, understand and take our clients through excellence and a deep cognition of our merchandises and services and the universe we live in ” ( www.woolworthsholdings.co.za, 2012 ) .

As a retail shop it is their desire as a company to supply its clients with excellence. They besides stress the importance of have a deep cognition of the merchandises.

3.3.2 Vision of Woolworths retentions limited

Woolworths Holdings Limited has a three twelvemonth vision that is divided into five classs of focus their clients, operations, employees, good concern journey and their stockholders. This study will advert a subdivision from each.

Their client vision: “ We will be the retail merchant of pick amongst the aspirational clients in the South African LSM [ Living Standards Measure ] 8 – 10 market. ”

Woolworths operational vision: “ We will be a simpler, better, faster concern that is more entrepreneurial, disciplined and principle driven, with simple constructions and procedures. ”

Employee vision: “ We will hold created an draw a bead oning workplace for our employees. ”

Good concern journey: “ We will be recognised as leaders in the retail industry for our go oning sustainability. ”

Their stockholders vision: “ We will hold achieved profitable market portion growing and hold delivered consistent upper quartile returns to our stockholders. ”

( Woolworths Holdings Limited, 2011 )

3.3.3 Goals of Woolworths retentions limited

Woolworths has divided their company strategic aims into four focal point countries their clients ; operations ; employees and “ Good Business Journey. ” We will see their client driven subdivision of their aims.

The following are their client aims:

“ To be a customer-centric concern ”

Frank winfield woolworths claims to hold gone through great lengths to understand who their clients are so that they are able to supply merchandises and services for them.

“ To be a trade name value-driven concern ”

As a company they strive to guarantee that their trade name incorporates its values and that those values are seeable in the trade name.

“ To construct threading profitable client relationships ”

The company launched a client trueness inducement programme, WRewards, in 2010 and have seen increased consumer disbursement. They wish to go on with inducements like the WRewards programme.

( Woolworths Holdings Limited, 2011 )

4. FINANCIAL AND GENERAL PERFORMANCE OF WOOLWORTHS 2007-2011

4.1 Net incomes

Two types of net incomes will be considered viz. runing net income and net net income after revenue enhancement and involvement.

4.1.1 Operating Net income

a ) Definition of Operating Net income

“ Operating net income is the difference between gross net income and operating disbursal. ” ( Paul Barrow, 2005 ) .

B ) Importance of Operating Net income

“ It is an of import step of trading public presentation because it shows how profitable a concern is before taking into history the funding costs ” ( Barrow, 2005 ) .

degree Celsius ) Trends 2007 – 2011 of Operating Net income for Woolworths ‘ Retentions Limited

The undermentioned graph illustrates the tendencies in the operating net income for Woolworths ‘ retentions Limited over the last five old ages.

Graph 6 Operating Net income for Woolworths 2007 to 2011

( Woolworths Holdings Limited, 2007 – 2011 )

The operating net income fluctuates over the period. It goes up from 2007 to 2008 so decreases from 2008 to 2009. From 2009 for the remainder of the period there is growing.

4.1.2 Net Net income after Tax and Interest

a ) Definition of Net Net income after Tax and Interest

Paul Barrow defined Net net income after revenue enhancement as: “ the sum of net income ( or loss ) the concern has made after all concern costs but before any revenue enhancement has been allowed for, including revenue enhancement ” ( Barrow, 2005 ) .

B ) Importance of Net Net income after Tax and Interest

Net Net income after revenue enhancement and involvement indicates to a company the portion of net income that can be given to the stockholders as dividends ( Du Toit, et al. , 2010 ) .

degree Celsius ) Trends 2007 – 2011 of Net Net income after Tax and Interest for Woolworths Holdings Limited

The undermentioned graph illustrates the tendencies on the Net net income after revenue enhancement and involvement for Woolworths Limited over the last five old ages.

Graph 7 Net Net income after Tax and involvement for Woolworths 2007 to 2011

( Woolworths Holdings Limited, 2007 – 2011 )

The graph shows net net income lessening from 2007 to 2008. Then it increases from 2008 to 2009 and continues to turn for the remainder of the period.

4.2 Net income Margins

4.2.1 Definition of Net income Margins

“ Net income borders provide an indicant of the per centum of turnover that shows as net income after certain tax write-offs are made ” ( Du Toit, et al. , 2010 ) .

Frank winfield woolworths shows their gross net income and operating net income borders in their fiscal studies. Gross net income border indicates the part of a company ‘s turnover that is realised after cost of gross revenues has been deducted this sum is so divided by the turnover ( Du Toit, et al. , 2010 ) .

Operating net income border provides an indicant of the per centum of turnover that is realised as net income after a proviso has been made for normal operating disbursals ( Du Toit, et al. , 2010 ) .

4.2.2 Importance of Net income Margins

Net income borders indicate the net income degrees of a company. This is of import for any company in order to mensurate profitableness. This step of profitableness will inform the company of whether it is making its aim of doing a net income ( Du Toit, et al. , 2010 ) .

4.2.3 Tendencies ( 2007 – 2011 ) of Net income Margins for Woolworths Holdings Limited

The undermentioned graph illustrates the alterations in Woolworths ‘ gross net income borders and operating net income borders from 2007 to 2011.

Graph 8 Woolworths Net income Margins 2007 – 2011 ( WHL Financial Reports, 2007-2011 )

The gross net income border grew systematically for this full period, with the highest growing in 2010 and 2011. It saw growing of 6.1 % over the full period. The operating net income border declined from 2007 to 2009 by 3 % . In 2009 to 2010 operating net income border increased by 0.2 % . This growing continued in 2011 by 2 % .

4.3 Market Share

4.3.1 Definition of Market Share

The estimated gross revenues for the merchandise or service based on the available capacity and given the degree of competition and trading ( Strydom, et al. , 2009 ) .

4.3.2 Importance of Market Share

It is of import for a company to cognize what its market portion is since this should give an indicant as to how much of a good or service it should bring forth. Having this cognition can forestall waste or even an under supply of goods and services ( Strydom, et al. , 2009 ) .

4.3.3 Tendencies ( 2007 – 2011 ) of Market Share for Woolworths Holdings Limited

The undermentioned graph illustrates the market portion for Woolworths vesture and nutrient from 2007 to 2011.

Graph 9 Market Share for Woolworths 2007 – 2011

( Woolworths Holdings Limited, 2007 – 2011 )

The market portion for nutrient in 2007 and 2008 remained unchanged at 9.2 % . In 2009 for nutrient market portion declined by 0.7 % and farther declined by 0.2 % in 2010. The market portion for vesture besides declined from 2007 to 2009 by 1 % . In 2010 there was a growing in market portion for vesture of 0.8 % .

4.4 Public Relations

4.4.1 Definition of public dealingss

Public Relations are the direction map which evaluates public attitudes, identifies the policies and processs of an administration with the public involvement, and executes a plan of action ( and communicating ) to gain public apprehension and credence ( Rensburg & A ; Cant, 2003 ) .

4.4.2 Tendencies ( 2007 – 2011 ) of public dealingss for Woolworths

For the tendencies over the last five old ages assorted high spots will be considered that affected the public perceptual experience of Woolworths Holdings Limited. These happenings range from awards to allegations of rational belongings larceny.

Woolworths Public Relations in 2007

A 2007 high spot sees Woolworths decide a monetary value bicker affecting an in-store franchisee. “ Serious Foods, an in-store franchisee of Woolworths, proprietor Dennis Hamer accused Woolworths of restricting his ability to vie. He accused Woolworths of holding a pricing system which made it hard for him to dismiss nutrients that made it unable for him to vie efficaciously with other in-store franchisees. He farther mentioned that Woolworths did non let him to publicize that he had cheaper monetary values than other Woolworth ‘s mercantile establishments. ( Mawson, 2007 ) .

The result was that Woolworths agreed to run an in-store monetary value direction system, leting directors and proprietors to put price reduction monetary values ( Mawson, 2007 ) .

B ) Woolworths Public Relations in 2008

In 2008 Woolworths received an international award from the World Trade Congress. It recognised Woolworths as the “ International responsible bargainer of the twelvemonth ” ( Woolworths Holdings Limited, 2007 – 2011 ) .

Woolworths Public Relations in 2009

2009 saw Woolworths revamp its expression to offer consumers an experience of “ find and exhilaration ” harmonizing to Andrew Jennings, MD of Woolworths ‘ group retail section. In an article in Business Day Jennings farther states that a smattering of shops were renovated to a new manner of thought and group design ( Mawson, 2009 ) .

This new offering includes a mix of nutrient, manner, beauty, place ware and digital merchandise this is to run into the demands of both local and international visitants ( Mawson, 2009 ) .

Woolworths Public Relations in 2010

In 2010 Woolworths decided to travel back on a determination that it made earlier to halt carrying “ spiritual and political magazines ” . This was in the visible radiation of protest and uproar received from political and spiritual motions. Churches and Christian groups threatened to boycott Woolworths. A political group the Freedom Front Plus called their initial determination to halt selling the magazines “ unforesightful and prejudiced ” ( Benjamin, 2010 ) .

Julian Novak the caput of spoilables at Woolworths announced that the magazines will be put back onto shelves within a hebdomad of them been approached by the assorted involvement groups. Novak farther explained that Woolworths had “ no purpose to take political magazines unless they were found non to be commercially feasible ” ( Benjamin, 2010 ) .

Woolworths Public Relations in 2011

In 2011 allegations of disgusting drama rose against Woolworths by a soft drinks company, Frankie ‘s, based on a little farm in Midlands Kwa-Zulu Natal. Frankie ‘s accused Woolworths of doing the labelling of its drink the same as the Frankie ‘s drink. Frankie ‘s claimed that this led to confusion by clients of their drink ( www.bizcommunity.com, 2011 ) .

Woolworths MD Zyda Rylands responded to these allegations by stating: “ we believe that the allegations made against Woolworths are baseless. We have non infringed any right of first publication, rational belongings nor registered trade grade ( www.bizcommunity.com, 2011 ) . ”

5. CONCLUSIONS ( MENIQUE MALAN )

5.1 THE PERFORMANCE OF VISION AND MISSION OF WHL

When mentioning to Woolworths Holdings Limited ‘s mission statement, we set up that their company strives to be the best retail company in the universe every bit good as taking all their clients through first-class merchandises and services. What makes this company unique is that after 80 old ages of service, still claiming that their merchandises and services would be rendered with excellence WHL makes certain that everything the company was implemented to make, would non endure as they are still a prima trade name that is turning continuously. We could besides see that they are accomplishing the vision they predicted for the company sing the clients vision because out of most trade names, Woolworths would still be the chosen shop.

5.2 THE PERFORMANCE WHL HAS ON THE SOUTH AFRICAN ECONOMY

Whereas the net incomes are concerned ( operating net income, net net income and net income border ) we can see that all these net incomes has decreased but as the old ages continued they have surely increased once more. All these net incomes are what the concern itself owns after all disbursals or tax write-offs have been acquired for. This shows us that WHL Company is still really profitable and everything Max had planned this company to be one time he started it, he has accomplished.

5. CONCLUSIONS ( SIXOLISILE MAHLASELA )

5.1 WHL populating up to their Vision, Mission and Goals

As I have analysed the mission, vision and the ends for Woolworths keeping limited one of the things that stood out for me was is the committedness that lead to efficient service that I get service that I get as a consumer. WHL claims that they understand their clients good and strive to offer a simpler, better and faster concern, I support these statements because in my experience in shopping at Woolworths, I do non hold to pass or waste clip to look for the points I want to buy like other retail shops.so I believe that they are on the right path and they are populating up to these statements [ Mission, Vision ] they will accomplish their aims.

5.2 WHL shaken foremost by the South African Economic fluctuations

When I look at WHL ‘s public presentation in comparing with the remainder of the economic system the GDP and Employment fluctuations did non hold important consequence on the company, but with the alterations in CPIX particularly in 2008 where it was significantly high. WHL ‘s net net income was at its lowest. This means even though monetary values were high people did non pass and this could be that Woolworths is expensive already and people would instead pass on other goods or retail merchants.

5.3 WHL to go on mounting for the following few old ages. Ceteris Paribas

Harmonizing to Interest rates alterations in when it was at its highest extremum in 2008, WHL had an increasing Gross net income Margin and it looks like its increasing at in increasing rate. I believe this is traveling to go on for the following twosome of old ages, since the Company is non merely turning in South Africa but in Asia and Australasia every bit good.

Although they lost a 0.9 market portion on the last three old ages at that place is a positive focal point and this was merely the consequence of planetary crisis, says Simon Susman Executive Chairman of WHL. With the analysis of the company and how they performed and able to set to depression crisis, I agree with him. With good leading and values they will go on making good for a really long clip.

5. CONCLUSIONS ( JOSEPH MAISELS )

5.1 Woolworths ‘ public presentation falling short of company mission, vision and ends and can take to loss of trade name value

Woolworths has experienced a figure of incidents over the last five old ages which have tainted the company ‘s trade name. Sing that one of their chief ends is to be a “ trade name value-driven concern ” . More should be done to do certain that their determinations lead to positive feedback from the company ‘s stakeholders. The determination they made to halt carrying spiritual and political literature lead to menaces of boycotting by spiritual and political groups. Decisions like this can take to losingss of loyal clients and due consideration demands to be given before these determinations are made.

The loss of market portion in 2010 could hold been as a consequence of this determination to draw back the literature. The losingss in net net income in 2010 are likely to besides hold stemmed from the determination to remember the spiritual and political literature.

5.2 Woolworths performs good despite economic force per unit areas and may make good in the hereafter

GDP figures for this five twelvemonth period indicate that the state was in a recession between 2008 and 2010. This means that production lessenings and that family have less money to pass. The employment rates besides suggest that there was recession since it dropped in 2008 bespeaking occupation losingss. Despite this Woolworths made a high operating net income in 2008 and experienced beads in 2009. It was able to turn its operating net income in 2010 and 2011.

This shows that despite hard economic force per unit areas Woolworths was still able to keep net incomes. It was affected by the decelerating down of GDP but could still bring forth a net net income for all this period. The net net income was significantly high in 2009 and dropped in 2011 followed by an addition 2012.

Woolworths kept consistent their Market portion in both vesture and nutrient. There were no major alterations to these sums which demonstrate that despite an economic recession they maintained their market portion.

For the full period Woolworths maintained a singular growing rate in their gross net income borders. This is notable since in an economic recession goods and services cost more. Growth in net income borders indicates that Woolworths were able to cut on costs of goods and services.

5.3 Woolworths will go on to make good in the following 5 old ages

WHL should go on to implement schemes that will go on to bring forth net incomes for them. They will go on to be successful if they are aware of their determinations. I believe their net incomes will turn in the hereafter. They can besides be a truly “ trade name value-driven concern ” if they are more aware the determinations they make and the impact they have of stakeholders of the company.

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