That was the wonder of Woolworths
Posted Tuesday, December 23rd, 2008 by Neil EdwardsThe administrator’s announcement of the closure of all 807 Woolworths’ stores shows that no value could be realised from the business as a going concern. The question remains whether there is any value in the brand and if anybody will be willing to pay a price for it.
In our brand value blog last month we argued the worth of the Ryanair brand and made the case for significant value by using the metrics of awareness; understanding; preference and stretch: this despite the airlines apparent unpopularity with many.
Woolworths is a highly visible brand. Brand awareness is invariably a positive attribute as it drives business through the comfort of familiarity and apathy in the search process. Somebody should be able to put this awareness to positive use.
Understanding is where the Woolworths’ brand starts to unravel. People lost sight of what Woolworths was and stood for. The shops were confused, a hotchpotch of crammed aisles offering everything from pick-n-mix sweets to garden furniture. The unifying element was price and when cost leadership is your sole basis of competition, there is only one direction for those prices to go - down. A major re-positioning exercise would be required by any acquirer.
There was a time when Woolworths was a natural choice for many, offering as it did an Aladdin’s cave of goods, conveniently located at fair prices.
To stretch the brand into new markets would require getting the preceding factors right, something that proved beyond the ability of the previous management. A new management team, however able, would surely ask itself, why it should invest in a broken brand for a new market when it can focus its resources on building something new.
Posted Tuesday, December 23rd, 2008 by Neil Edwards
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